The Patriot Post® · Despite Quarterly Profit, USPS Still in Trouble

After many agonizing years of poor financial statements, the Postal Service’s finally making a profit should be welcome news, right? Well, sure, but with one major caveat: The core issue still applies, meaning the agency’s long-term outlook remains bleak. But first, the good news. According to Government Executive, “USPS posted a net income of $307 million in the first quarter of fiscal 2016, the first such gain since the fourth quarter of fiscal 2011. Profits grew $1.1 billion over the same period last year, when the Postal Service lost $754 million. Operating revenue ticked up 3.3 percent to $19.3 billion between Oct. 1 and Dec. 31, 2015, driven largely by a record volume of package delivery. Shipping and package revenue increased by 13.5 percent in the quarter, which included the holiday period.”

So what’s the problem? “[T]he increase is almost entirely due to package delivery,” says Hot AIr’s Jazz Shaw, who later adds, “This brief spasm of profitability is based largely on a somewhat stronger economy, with more people buying and shipping things. All it would take is another even modest downturn in the economy and the USPS would be right back in the red.” Here’s why. Newsweek recently wrote, “In 2006, a lame-duck Congress mandated that the Postal Service pre-fund retiree health benefits. No other agency or company in the country has to pre-fund for even one year; the Postal Service must pre-fund 75 years’ worth of these benefits in advance. That $5.6 billion annual charge is the ‘red ink.’ Without this unique and unfair burden, the narrative would be as follows: Here’s a government entity that, with no taxpayer money, and faced with a still soft economy plus the growing reach of the Internet, once again earned a billion dollar-plus operating profit.”

As Jazz Shaw astutely observes, “Congress could probably step in and ease some of that burden but then they’d be taking on the unions along with a few other headwinds. Does that sound likely to happen in an election year?” Nope. But something’s eventually gotta give. The Veterans Administration isn’t the only agency that needs privatizing.