The Washington Post recently published an article asking if the post office should “be sold to save it.” It begins with an explanation of what the author sees as an unsustainable postal service:
The U.S. Postal Service, which has been losing customers for almost a decade, is still struggling to right itself. Everyone understands its basic problem. The electronic age has pushed first-class mail into an unstoppable decline. To stay afloat, the post office needs to get its costs under control, by closing post offices, eliminating Saturday delivery, downsizing its workforce. To boost revenue, it could offer banking services and sell lots of stuff besides stamps.
It goes on to advocate for privatizing the agency by selling off parts of it to bidders who could then operate it independently.
The problem with the Post's argument starts in its thesis: that the post office is in some sort of deep fiscal hole of its own making – a result of being left behind in the Internet Age and a shrinking consumer base. The truth is that almost all of the postal service's losses can be traced back to a single change in the law made by the Republican Congress in 2006.
That year, the Congress passed the Postal Accountability and Enhancement Act of 2006 (PAEA). Under the terms of PAEA, the USPS was forced to “prefund its future health care benefit payments to retirees for the next 75 years in an astonishing ten-year time span” – meaning that it had to put aside billions of dollars to pay for the health benefits of employees it hasn't even hired yet, something that “no other government or private corporation is required to do.”
As consumer advocate Ralph Nader noted in 2011, if “the prepayments required under PAEA were never enacted into law, the USPS would not have a net deficiency of nearly $20 billion, but instead be in the black by at least $1.5 billion.”