The Post Office has come under financial pressure from a number of sources over the past decade. Of course the internet has usurped traffic. And there’s also lost market share to private carriers like Federal Express and United Parcel Service, which cut into the lucrative package an overnight delivery markets, while leaving the USPS with an unenviable monopoly in the money-losing but vitally important national letter-and-stamp service. Despite regularly increasing rates over the last decade, the United States still offers one of the cheapest such services in the world, with a flat fee of 46 cents to send a 1 oz. envelope 1st class anywhere in the United States.
For less than half a dollar, you can send a birthday card from Maine to Hawai’i, and be confident that it will arrive in 2-3 days. Pretty impressive. Especially when compared to other nations, almost all of which charge more for an ounce of domestic mail, even though most of them are quite a bit smaller in size. The chart below compares rates from 2011.
Another financial constraint comes from the fact that, other than some small subsidies for overseas U.S. electoral ballots, the USPS is a government agency that pays its own way, operating without any taxpayer dollars for about thirty years now..
However, the biggest factor in its recent financial free fall is undoubtedly the Postal Accountability and Enhancement Act of 2006 (PAEA), which Republicans pushed through Congress and President George W. Bush signed into law. The PAEA required the Post Office fully fund its pension healthcare costs through the year 2081.
Yes, you read that right. 2081. And it was given only 10 years to find the money to fund 75 years worth of retirement healthcare benefits.To clarify just how odious this regulation is, think about it like this. In the next three years, the Post Office must finish finding the money to fully fund not only all of its current retirees and current works, but also decades’ worth of future workers it hasn't hired yet. Indeed, some of the future retired workers in question weren’t even born yet when PAEA was signed into law.
Needless to say, no other federal, state, or government agency, much less any private company, has such a mandate, and the USPS is now bleeding money down the drain like it was shivved in a prison shower stall; which, metaphorically speaking, it was. Cloaked in the mantle of fiscal responsibility, the real impetus for the PAEA was an attack on the postal workers’ union, and a nod to the USPS’s private competitors.
Image: Charles Schultz
