Postal finances: the numbers tell the truth, but not the whole story

Correction: An earlier version of this article misidentified the agency with which the U.S. Postal Service files a quarterly financial report known as a Form 10-Q. It is the Postal Regulatory Commission, not the Securities and Exchange Commission. This version has been updated.

Columnist May 11, 2014

Where you stand on the U.S. Postal Service’s financial situation depends on where you walk.

“U.S. Postal Service Records Second Quarter Loss of $1.9 Billion” was the headline of a USPS press release issued Friday.

Joe Davidson writes the Federal Diary, a column about federal government and workplace issues that celebrated its 80th birthday in November 2012. Davidson previously was an assistant city editor at The Washington Post and a Washington and foreign correspondent with The Wall Street Journal, where he covered federal agencies and political campaigns. View Archive

But if you are a letter carrier walking city streets and you believe your union leaders, Postal Service finances don’t look nearly as bad as they do to USPS officials at headquarters in Washington.

“Rolando: Results reconfirm the steady improvement in USPS’s finances,” proclaims a press release issued by the National Association of Letter Carriers, whose president is Fredric V. Rolando.

The NALC said figures in a USPS financial document show that the Postal Service “reported a quarterly operating profit of $261 million.”

Joseph Corbett, the USPS chief financial officer and executive vice president, said that is “just not accurate.” The $261 million “is NOT operating income/profit,” he added in an
e-mail.

The Postal Service’s quarterly filing with the Postal Regulatory Commission, known as a 10-Q, indeed shows net income of $261 million for the three-month period that ended March 31 — but that is before taking into account a pair of hefty expenses: $708 million for workers’ compensation and more than $1.4 billion for the pre-funding of retiree health benefits.

Once those expenses are considered, USPS shows a loss of almost $1.9 billion for the same period.

That loss reflects the true financial condition of the Postal Service, according to Corbett. He said the $261 million in net income relates to “operations that are substantially under management’s control,” which does not include workers’ comp and pre-funding.

Postal officials pointed to the importance of the $261 million in the 10-Q, saying:

“We believe that analyzing operating results without the impact of certain of these charges provides a more meaningful insight into current operations.”

Rolando used his interpretation of the figures to argue against cost-cutting measures that would “degrade services to the public.” By e-mail, he acknowledged “there is red ink — but it’s important to understand that the Postal Service has been operationally profitable since October 2012.” He said that “USPS is well on the way to realizing its projection of $1.1 billion in operating profits this year.”

Instead of closing postal facilities and trying to eliminate Saturday mail delivery as officials have proposed, Rolando said, “legislators should address the factor that is causing 100 percent of the losses — the congressional mandate that the Postal Service, alone among all public agencies and private companies, be required to pre-fund future retiree health benefits.”

Corbett anticipated that argument. He cited Postal Service liabilities exceeding assets by $42 billion, and $10 billion needed for deferred investments including new delivery vehicles and package-sorting equipment.

“Some comments in recent news reports suggest that all we need from Congress is help with restructuring our retiree health benefit plan,” he said in a press release. “Nothing can be further from the truth.”

In Washington, however, where you stand determines how you see the truth.

A law to protect gays?

Workplace discrimination against federal employees based on sexual orientation has been against government policy since 1980, but the policy has not been interpreted uniformly, says a Merit Systems Protection Board (MSPB) report.

Legislation would make that prohibition explicit and allow federal employees to take discrimination cases to the Equal Employment Opportunity Commission, according to the report issued last week.

Another MSPB recommendation says “agencies should review their management programs, policies, and procedures to ensure that they are inclusive and fair to all employees.”

The document presents a disturbing history of discrimination because of sexual orientation.

“Prior to 1975, Federal Government policy considered an individual’s sexual orientation when determining suitability for Federal employment,” the MSPB reported. “Although we will never know the exact number of individuals who were denied employment or who had their employment terminated based on their actual or assumed sexual orientation, one estimate places this number between 7,000 and 10,000 in the 1950’s alone. It is impossible to determine the number of individuals who may not have sought Federal employment due to the knowledge that their sexual orientation made them ineligible for selection.”

The MSPB said only about 1 percent of those responding to an agency survey in 2010 believed they had been discriminated against because of their sexual orientation.

The report also noted, however, that a 2012 survey by the Office of Personnel Management “found that lesbian, gay, bisexual, and transgender (LGBT) Federal employee perceptions of the workplace were generally less positive than other employees.”

Twitter: @JoeDavidsonWP

Previous columns by Joe Davidson are available at wapo.st/
JoeDavidson
.

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