Stamp prices go up but USPS is still hemorrhaging massive amounts of money
The USPS has posted loss in the billions for the past 12 years
CLEVELAND, OH (WOIO) -On Sunday the prices of a Forever stamp went from 50 cents to 55 cents which marks the largest single increase in the history of the USPS.
The increase is not expected to pull the the Postal Service out of the massive hole it has operated in for the past 12 years, losing billions every year.
“In fiscal year 2018 the Postal Service recorded a net loss of $3 9 billion. Revenues continue to be pressured by the ongoing erosion of First-Class Mail volumes,” according to a statement from the USPS.
Also contributing to the losses are payments to employees health and pension plans.
The National Association of Letter Carriers, the union representing employees, claims the USPS is unfairly being forced to fund future pension and health benefits as mandated by federal law.
"“What is at issue here are not the normal health or pension costs, which every business pays annually, but the 2006 congressional mandate that the Postal Service pre-fund future retiree health benefits some 75 years into the future,” Fredric Rolando, president of the National Association of Letter Carriers, said.
“That obligation, borne by no other public agency or private company, costs about $5.8 billion a year and accounts for more than 90 percent of the postal red ink."
Here are the USPS deficits for the past 12 years in billions:
- 2018 $3.9 B
- 2017 $2.7 B
- 2016 $5.6 B
- 2015 $5.5 B
- 2014 $5.6 B
- 2013 $5.0 B
- 2012 $15.9 B
- 2011 $5.1 B
- 2010 $8.5 B
- 2009 $3.8 B
- 2008 $2.8 B
- 2007 $5.1 B
2012 was a particularly bad year for a reason.
“It had to do with two payments to prefund retiree health benefits, a provision in a 2006 postal reform law that also had other requirements that have significantly contributed to our large financial losses," a statement said from the USPS.
According to the USPS the problems are serious but solvable.
“The flawed business model imposed by law continues to be the root cause of our financial instability. We are seeking reforms that would allow the organization to reduce costs, grow revenue, compete more effectively, and function with greater flexibility to adapt to the marketplace and to invest in our future,” according to Postmaster General and CEO Megan J. Brennan.
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