Postal Service records revenue increase, but losses remain as overhaul bill appears to stall


U.S. Postal Service mail delivery trucks sit idle at the Manassas Post Office in Virginia in this September 5, 2011 photo. (KAREN BLEIER/AFP/Getty Images)

The U.S. Postal Service recorded its first revenue increase in five years and mail volume showed signs of stabilizing despite continued decline — but the agency still lost $5 billion in fiscal 2013, making it the seventh consecutive year of red ink, according to figures released Friday.

The agency’s annual $5.6 billion pre-funding requirement for future retirees also continued to be a drag on postal finances, USPS and union officials said.

The continued losses dampened the good news about a revenue increase and were compounded by the possibility that Congress will not pass legislation this year to help stanch the bleeding — which would make it the third straight year lawmakers failed to agree on a way forward to aid the struggling mail service.

“We’re in a deep financial hole,” USPS Chief Financial Officer Joseph Corbett said during a media briefing last week. “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.”

A leading bipartisan Senate bill has hit a snag in the Homeland Security and Governmental Affairs Committee, which pushed back a vote set for this month amid concerns from Democrats about the service cuts and rate increases the legislation allows.

Even if the committee votes before the Thankgiving recess, congressional aides acknowledge privately that the bill is unlikely to make it to the Senate floor this year. In the House, Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) pushed a bill through the panel in July, with only Republican support. It has not reached the floor.

The sponsors of the Senate bill, Thomas R. Carper (D-Del.), the committee chairman, and Tom Coburn (R-Okla.), the panel’s top Republican, have said they want an agreement that all sides can live with.

Carper “remains hopeful that the committee can proceed with a markup on the bill later this month,” a spokeswoman said in a statement.

Net losses for the agency since 2011 are $26 billion.

The net loss for 2013 is largely the result of Congress’s requirement that the Postal Service pre-fund retiree health benefits, critics of the mandate say. The agency defaulted on the prepayment last month, but the USPS still counts it on the books, officials said.

Sen. Bernard Sanders (I-Vt.), who has proposed legislation to end the obligation, said the Postal Service would have recorded a net profit of $600 million without it.

“In terms of their business operations, they brought in more than they spent, but they have this burden,” Sanders said in an interview 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.

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 deliveries helped improve the numbers, and the USPS is poised to make additional progress through new agreements with online retailers such as Amazon.

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

The National Association of Letter Carriers cited this year’s modest drop 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.”

The long path to postal changes underscores the challenge of finding agreement on an issue that splinters lawmakers not just by party but by geography, labor vs. business sympathies and government philosophies.

“There’s a huge divide on how to approach postal [legislation],” said Art Sackler of the Coalition for a 21st Century Postal Service, which represents large mailers. “There are different philosophical and business views of how the postal system can right itself financially and still deliver services the American people expect,” he said.

The Senate bill, like the House measure, would reduce the burden of the retiree health-care pre-funding. It would also allow the agency to eliminate Saturday mail delivery in a year and make curbside delivery or cluster boxes mandatory for businesses and new homes, with limited exceptions.

Additionally, the Senate measure would allow the Postal Service to start shipping beer and wine. Postal officials could also raise rates for bulk mailers, most of whom cannot pay more than the rate of inflation.

Senators from rural states are raising the loudest objections to service cuts. In the past year, hundreds of mail-sorting hubs have closed.

Sen. Jon Tester (D-Mont.) and several colleagues say the closures have slowed delivery in his state.

“I’m not going to support something that does as much bad stuff as this [Senate] bill does,” Tester said in an interview. “In the end, unless there’s changes, I think the bill’s in trouble.”

Tester said his constituents complain that they do not receive letters and packages as quickly as they used to, especially since the Postal Service reduced plane service for mail delivery across the state and shut four of the state’s seven mail-sorting hubs.

The Postal Service is seeking an emergency rate increase above the rate of inflation — a move that has angered industries such as banks and publishers. The cost of a stamp would increase to 49 cents from 46 cents, while the rate for letters above 1 ounce and postcards would rise 1 cent.

The Senate passed a bipartisan postal bill in April 2012, only to watch last-minute negotiations with the House fall short at the end of that year. Issa’s committee also passed a bill, but it did not get to the House floor.

“Members are looking out for parochial issues that affect their districts,” said Aaron Fobes, a Coburn spokesman. “There’s something for everyone to be upset with. The Postal Service affects every town in America.”

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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