Postal Service lost $5 billion despite first revenue gain in five years

November 15, 2013

The U.S. Postal Service achieved its first revenue increase in five years but still lost $5 billion in fiscal 2013, marking seven consecutive years of red ink for the agency, according to figures released Friday.

(David Goldman/AP)
(David Goldman/AP)

Postal unions, the USPS board of governors, and at least one Democratic lawmaker said the overall loss was due to congressional mandates, particularly a requirement that the agency pre-fund retiree benefits to the tune of about $5.6 billion per year.

Sen. Bernie Sanders (I-Vt.), who has proposed legislation to end the pre-funding obligation, said the Postal Service would have recorded a net profit of $600 million without the annual payment, which the agency has defaulted on for the past several years.

“In terms of their business operations, they brought in more than they spent, but they have this burden,” Sanders said in an interview on Friday. “No other business or government agency is burdened with this mandate.”

The Postal Service has pressed Congress to end the payment mandate, but USPS officials said Friday that such a move would not end the agency’s monetary woes, noting that the organization is still $40 billion in debt despite its improving finances.

“We’re in a deep financial hole,” USPS Chief Financial Officer Joseph Corbett said during a media briefing. “With one year of nearly breaking even [on operating revenue], we’re not ready to declare victory. We can’t continue to remain in this precarious position.”

The $5 billion loss this year represents a significant improvement over 2012, when the agency lost about $16 billion. An 8 percent increase in revenue from package delivery helped improve the numbers, and the USPS is poised to make additional progress through new agreements with online retailers such as Amazon.

MORE: Amazon to deliver on Sundays using Postal Service fleet

But the gains this year were partially offset by a revenue decline of 0.05 percent in first-class mail delivery, which remains the Postal Service’s most profitable product. The agency experienced drops in that category of about 6 percent in 2011 and 4 percent in 2012.

The National Association of Letter Carriers cited this year’s more modest decline as proof that mail delivery has stabilized.

“We hope Congress is paying attention to the postal turnaround,” said NALC president Fredric Rolando. “Lawmakers should reject bills that focus on slashing service and attacking postal employees, and instead focus on fixing the pre-funding fiasco.”

Two top senators have proposed bipartisan legislation that would restructure the congressional mandate. The bill, introduced by Sens. Tom Carper (D-Del.) and Tom Coburn (R-Okla.), would also allow for a gradual end to Saturday mail and make curbside delivery or cluster boxes mandatory for businesses and new homes, with limited exceptions.

Those bills largely match the Postal Service’s five-year business plan, which calls for five-day mail delivery, a restructuring of the pre-funding requirement, and authority to expand products and services.

Rep. Darrell Issa (R-Calif.) has proposed similar legislation in the House, but the measure has received no support from Democrats, who opposed the service cuts.

Follow Josh Hicks on TwitterFacebook or Google+. Connect by e-mail at  josh.hicks@washpost.comVisit The Federal Eye, The Fed Page and Post Politics for more federal news. E-mail federalworker@washpost.com with news tips and other suggestions.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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Josh Hicks · November 15, 2013