Emails (excerpted), Laura Ehrlich, executive director, Hightower and Associates, July 31, 2013 through Aug. 9, 2013

4:53 pm

July 31, 2013

...here are few back up materials:

http://about.usps.com/who-we-are/postal-facts/welcome.htm#H2

http://www.ilsr.org/save-commons-post-office/

"In 1970 Congress stripped the post office of its cabinet status and stopped providing public funding.  The new quasi public corporation was urged to adopt a more business like attitude.  Its name, the U.S. Postal Service, reflected a circumscribed mission statement.  No longer was it to be a tool to check the predations of the private sector.  Its sole mission would be to deliver the mail.

The USPS used its new flexibility and ability to borrow to dramatically increase productivity.  By the 1990s, despite the elimination of a public subsidy that in 1970 had accounted for 25 percent of its total budget the USPS was generating a consistent profit."

http://www.ilsr.org/the-post-office-past-present-and-future/

Here's one source that we used for an issue of the Lowdown: http://www.savethepostoffice.com

And, here's the Lowdown that Hightower wrote on the Post Office in March 2012: http://www.hightowerlowdown.org/sites/hightowerlowdown.civicactions.net/files/1203Lowdown.pdf. I think this will explain how Hightower reached some of his his conclusions.

12:50 pm

Aug. 5, 2013

I just spoke with Steve Hutkins from SaveThePostOffice.com, and he just sent me the following info. He said he would be willing to talk with you. You can reach him at admin@savethepostoffice.com.

Best Wishes,

Laura

 

For the first six months of Fiscal year 2013 (Oct-March):

 

Total revenues: 34.008 billion

 

Total expenses: 37.053 billion

 

Loss: 3.045 billion

 

Amount owed to Retiree Health Benefit Fund for this period: $2.8 billion

 

Adjusted Loss: $245 million (less than one percent of revenue)

 

The most recent financial report is for May 2013.  It covers year-to-date for the first 8 months of the fiscal year.  It shows a loss from operations of $267 million (again, about 0.6 percent of revenues for the period).  The total loss is $3.842 billion, but $3.731 billion of that is the RHBF payment.  

 

The May report is here: http://www.prc.gov/prc-docs/home/whatsnew/USPS%20May%202013%20financials_3192.pdf

 

During this same time, the Postal Service has probably continue to overpay into the FERS pension plan (there's a surplus of several billion in the fund from overpayments during years past), so if that overpayment is factored in, it is true to say that the Postal Service is operating at a profit during FY 2013, were it not for the payments into the Retiree Health Benefit Fund (the $5.6 billion annually required by the PAEA, to pay for health care for retirees decades into the future) and overpaying into the FERS.

 

Since 2007, when the RHBF payments began, the Postal Service has lost $40 billion.  $32 billion of it is payments into the RHBF.  Another $8 billion involves adjustments to workers compensation that the Postal Service considers problematic (due to the way they're calculated).  Over this period of time, the Postal Service has lost $34 million (a microscopic loss in the context of annual revenues averaging around $68 billion).

 

The media constantly says that the Postal Service lost nearly $16 billion last year.  But over $11 billion was the retiree health care payments (two payments of $5.6 billion, since the USPS skipped the 2010 payment), and several billion was for the workers comp adjustment.

 

Some of this is explained in this post:

 

http://www.savethepostoffice.com/fun-numbers-postal-service-losing-25-million-day-and-other-spurious-memes

 

All the USPS financials are here: http://about.usps.com/who-we-are/financials/

11:39 am

Aug. 9, 2013

This is from the PRC. Please see pages 68-78, specifically the bottom of page 77. http://www.prc.gov/Docs/70/70341/Order_547.pdf

Also, please see page 8: http://www.prc.gov/Docs/71/71786/Valpak%20ACR2010%20Initial%20Comments.pdf

Their source is the USPS 2010 annual report. This shows an operating profit in 2007 and 2008.