OP-ED: U.S. Post Office Wants Flexibility to Change Business Model

Rosemarie Fernandez, district manager of the San Francisco Postal District, believes that despite the Internet, the core functions of of the USPS are essential.

“Neither snow, nor rain, nor heat, nor gloom of night ... will stay us from the swift completion of our appointed rounds.”

For more than 235 years, the U.S. Postal Service has adhered to this unofficial creed. But now, the agency that is responsible for delivering mail to every citizen at affordable rates is facing a financial crisis.

The increased use of the Internet, combined with an ongoing recession, has had an unprecedented impact on our country’s mail volume—and on the postal service’s bottom-line. We have responded by pursuing every available option under our control to aggressively cut costs, including slashing annual operating expenses by more than $12 billion and reducing our size by 110,000 career positions during the past four years.

We also continue to consolidate our processing facilities and right-size our expansive retail network. At the same time, the postal service is continuing to work with local retailers to expand access to postal products and services at more convenient locations where people already shop, such as grocery stores, pharmacies, office supply stores and other appropriate retailers.

These aggressive efforts, however, are insufficient to close projected budget deficits and ensure the survival of the postal service beyond our current fiscal year, which ends on Sept. 30. The postal service needs Congress to enact legislation by this September that would eliminate the current mandate requiring retiree health benefit pre-payments, which costs the postal service $5.5 billion annually. If it were not for the unique health benefit pre-funding requirement, the postal service would have recorded a cumulative profit of $1 billion from 2007 to 2010.

We also are exploring legislative proposals that would enable us to establish our own health benefits program, administer our own retirement system, and adjust the size of our workforce to match operational needs and the changing marketplace.

Legislation also is needed to return a $6.9 billion overpayment into the Federal Employees Retirement System. In addition, legislation is needed to give us the authority to determine the frequency of mail delivery, which can save the postal service roughly $3 billion each year. 

The U.S. Postal Service is not seeking tax subsidies. We receive no tax dollars for operating expenses, and rely on the sale of postage, products and services to fund our operations. Moreover, the postal service is not seeking additional borrowing authority. Indeed, the absolute last thing that the postal service wants or needs is to incur additional debt. What the postal service needs is access to the money we already have over-paid into our retirement fund. 

Even in an increasingly digital world, the postal service remains critical to the economy, supporting a mailing industry that represents more than 8 million jobs and more than $1 trillion in commercial activity annually.

Regardless of how many people use the Internet to pay their bills and send documents, the core function of the postal service and core need of its customers—the physical delivery of mail and packages to America’s homes and businesses—will always exist. And despite doom and gloom headlines, the U.S. Postal Service can have a bright future and be put on the road to profitability if given the flexibility from Congress to operate more like a business does.

It’s time for Congress to swiftly complete its rounds, and pass substantive legislation to transform the postal service business model, which will put it on a sound financial footing for generations to come.


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