Below is a summary of USPS’ Financial History from 2007-2011. The summary shows that USPS net financial losses started after the “Postal Accountability and Enhancement Act” (PAEA) was passed into law on December 20, 2006. The PAEA required USPS to pre-fund its Retiree Health Benefit Fund for current and future employees. According to USPS, ” we have incurred expenses for retiree health benefits of $5.5 billion, $1.4 billion, and $5.6 billion in 2010, 2009, and 2008, respectively, for the legally-mandated pre-funding payments to the PSRHBF at each year-end. Without the impact of these charges, the net loss would have been $505 million in 2010 and $1,051 million [billion] in 2009. In 2008 the net income would have been $3,211 million.[billion] ”
USPS Financial History Summary
Prior to 2007 USPS Financial Data show Net Profits from 2004-2006
| 2006 | 2005 | 2004 | |
| Operating Revenue | $72,650 | $69,907 | $68,996 |
| Incomefrom Operations | $969 | $1,626 | $3,145 |
| Net Income | $ 900 | $ 1,445 | $3,065 |
The PAEA is the primary reason for the financial woes of the Postal Service. Without the prefunding mandate the Postal Service, as of June 2011, would have been in the black by at least $1.5 billion. The changes to the price structure on flats was pushed by large mailers such as Time-Warner. Changes the USPS should have resisted.
It would have been more instructive to look at mail volume losses as they relate to the financial condition of the USPS. For a correct evaluation you need to look to 2006 for the substantial rate increase that broke the industries back. Add to that the rule changes on flats (2007) and you have the true beggining of the precipitous decline in both mail volume and revenue declines. This evaluation therefore predates PAEA and the recession and clearly places the blame correctly where it belongs, on the USPS.
I am not saying that congress did not inflict tremendous damage to the USPS with prefunding. Its just that most analyses are an attempt to hold the USPS faultless. Most blame the recession, this one blames PAEA. When in fact the real start of this postal death spiral was a self inflicted, mortal wound caused by a postal bureaucracy that raised rates and instituted rule changes driving 30% of their flat volume out of the mail stream in less than 5 years!
Blame who you want but it has been postal policies driving customers out of the mail stream and to the Internet since the late 1990’s!
you can never trust postal accounting