USPS mail boxes.

First, a few facts:  

No taxpayer money goes to the USPS.  The USPS is a quasi-government agency.  They receive money for the services they provide.  The stakeholders for the USPS are the mailing public. Congress and the USPS agree that the USPS is broke.

The USPS is required by Congress to pre-fund their retiree health care benefits to the tune of approximately $5.5 billion annually.  This has been in effect since 2006.  So as of 2014 they have pre-funded this account by $44 Billion.  This amount will take care of the great grand children of today’s postal workers.  As the USPS is cutting back the number of employees (31% of career jobs over the last 10 years), this amount will extend even to the  great-great grandchildren, and beyond.  But this is no fault of the USPS, their hands are tied.  They are required by law to continue to pre-fund this account.  Note: No other government agency is required to do this.

In 2013 the USPS would have made a profit of $660 million if they were not required to continue to pre-fund the retirement account.

On the government scale, that is a modest profit, but a profit nonetheless.  This profit also comes while the USPS is delivering to 10.8 million more households than 10 years ago.  The USPS has been closing various facilities and improving efficiencies within their organization, while first class mail continues to decline.  The amount of mail delivered today is the same amount as in 2006, but the USPS has improved efficiencies and eliminated positions and facilities to lessen the outgo.

Some other cost cutting measures that the USPS is proposing are:

  • End of Saturday delivery, except for package services
  • End of door delivery of mail and move that out to roadside mail boxes and then eventually move to cluster boxes
  • Close some poor performing Post Offices
  • Continuing to eliminate positions
  • (And the highly controversial) Having contract Post Offices in Staples

Print and mail drive over $3.8 Trillion in related services annually.  The more the USPS is required to tweak the system (ie: cut services) the more this amount will decline.  Without removing the pre-funding requirement, the USPS can only continue to cut costs and raise prices to stay afloat.