Postal Service Can Brave Rain, Sleet, Snow, Even Dog Bites — But Not Congress

Normally, this is the kind of number-based story that would go in our Enumerati section. If it were, it would look something like this:

60— Number of bills Congress has introduced to rename post offices, 17% of all bills passed
0— Number of bills Congress has introduced to address the Post Office’s insolvency

But the story needs more explanation, and ABC’s Amy Bingham reported the infuriating facts.

In the 18 months the 112th Congress has been sworn in, the House has introduced 60 bills to rename post offices. Thirty-eight have passed the House and 26 have become law. During those 18 months, the House has produced 151 laws, 17 percent of which have been to rename post offices, according to Congressional Democrats.

Not a single bill has come to the House floor aimed at reforming a Postal Service, which is bleeding billions of dollars because of Congressional mandates.

What Bingham meant when she said “bleeding billions of dollars because of Congressional mandates” is something most Americans don’t know or understand. The reason the United States Postal Service (USPS) is in trouble is not because people pay bills online and it’s not because postal employees aren’t as service-oriented as the private sector (a claim of which I am unconvinced), and it’s damn sure not because of unions.

The reason the postal service is failing is because Congress set it up to do so in 2006.

Before Congress passed the Postal Accountability and Enhancement Act of 2006, the USPS operated under a pay-as-you-go model for retiree health care funding. The new law requires the Postal Service to pre-fund its benefit obligations.

Sounds like a good idea, right? Make the USPS keep enough cash on hand to pay for the health care costs of all of its current and future retirees for the rest of their lives. The truth is, the requirement is strangling the Post Office, and tying up massive amounts of cash needlessly.

The mandate means the Postal Service has to set aside money for people who have not yet retired, and are in fact, not even yet employed by the Post Office. And although these benefits will be paid as far as 75 years into the future, and would normally be accumulated over that 75 years, Congress gave the Post Office only 10 years in which to come up with all the cash.

In 2006, Congress passed a law requiring the Postal Service to wholly pre-fund its retirement health package – that is, cover the health care costs of future retirees, in advance, at 100%. The Postal Service, which is a corporation owned but not funded by the federal government, is the only government-related agency required to prefund retirees’ health benefits.

“No one prefunds at more than 30%,” said Anthony Vegliante, the service’s executive vice president.

Sally Davidow, spokeswoman for one of the unions that represents postal workers, calls it a “a ridiculous requirement.”

“(The requirement is) so ridiculous, Congress doesn’t do it. No other government agency does it. No private businesses do it,” she said. “It’s $5.5 billion a year, every year, for 10 years…

“The law was passed in 2006 and lo and behold, ever since 2007, the Postal Service has been suffering a tremendous debt.”

Has the Postal Service lost money on its own? Yes.

Actual loss [in 2010] was $500 million and when added, comes to the $8.5 billion reported…While $500 million is a lot, it doesn’t compare with $8.5 billion and is down from the previous year loss of $1 billion. If you took out the onerous pre-funding mandate, the Postal Service actually shows a $700 million profit over the last four years instead of the $20 billion loss.

Has the Postal Service come up with great ideas to cut costs? Yes.

The Postal Service has attempted to enact an array of cost-cutting measures to pull itself out of a $22.5 billion budget shortfall. Over the past five years USPS has cut more than 110,000 employees. The mail service, which takes no taxpayer money but is regulated by Congress, has announced plans to close or consolidate 230 mail processing centers, cutting 13,000 jobs and saving an estimated $1.2 billion annually.

The service attempted to close 3,700 post offices under a plan announced last year, but after public outcry decided to cut operating hours to between two and six hours per day at 13,000 locations. USPS claims that move will save $500 million per year.

One of the largest cost-saving measures would be ending Saturday mail delivery, a move the Postal Service says will save $3.1 billion a year. But USPS can’t cut delivery without Congressional approval, and partisan disagreements over whether Congress should take control of USPS’s operations until it is solvent again or if it should leave the decision making to the postmaster general have halted any action on Capitol Hill.

Has the Postal Service come up with ingenious, private-sector solutions to shore up its bottom line? Yes.

The USPS has for several years been contracting with both UPS and FedEx to provide “last mile” delivery, meaning that the two private shippers move the freight across the country, sort it at a local hub, and deliver it to the post office that services the address for final delivery by a mail carrier. The service improves tracking and saves the USPS money, while freeing up the private carriers to provide more bulk business delivery. Win-win.

“The contract service is best-suited for high-volume shippers (think online retailers) who need a basic, cost-effective shipping option for residential deliveries,” said Donna Longino UPS Public Relations Manager.

With Congress now on its well-earned vacation* don’t look for anything more meaningful coming from Washington than changing the name of your local post office from the Lyndon B. Johnson Post Office to the Ronald Reagan Post Office.

It’s not the Postal Service that’s broken. It’s Congress.

*Yes, that was snark.

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