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Contrary to the article, the USPS is not making an operational profit. In FY 2010 it had an operational loss (NOT counting any pension funding) of $600 million.

Contrary to the article, the USPS is not making an operational profit. In FY 2010 it had an operational loss (NOT counting any pension funding) of $600 million. In FY 2011 that rose to an operational loss of $2.2 billion Do your figures for operational profit consider this part of the article: In addition, due to a 40-year-old accounting error, the federal Office of Personnel Management has overcharged the post office by as much as $80 billion for payments into the Civil Service Retirement System. This means that USPS has had billions of its sales dollars erroneously diverted into the treasury.

Lazare 15y ago
Nope, 'cause no matter what the truth (or the resolution) of that particular dispute is, it won't impact the numbers for the last two years. It might well change the numbers for FY 1961 or so though. :)
- OpieCunningham 15y ago
  I'm not sure I follow. Are you suggesting that if there was an accounting error, the USPS lost all $80 billion in 1961? Perhaps you're simply unfamiliar with the accounting error issue as outlined in the article.
  - Lazare 15y ago
    Okay, first, operating income may or may not include pension expenses; it depends on a lot of details. According to reports, there was a historical error, and over some number of years, back in the 60s, the USPS paid in "too much" (how much? Less than $80b...how much less, nobody seems to know). If they booked that as an operating expense, that may have shown up in decreased operating income during those years. That means that, if the money was refunded, it might or might not lead to a restatement of their 60s-era operating income, depending on whether the original overpayment had been counted as an operating expense. But everyone seems to be agreed that the issue, whatever it was, ended some time ago; probably during the 70s when there was a big change in how the USPS handled pensions. And that leads us to two conclusions: 1) The overpayment is not ongoing, and is not therefore impacting current operating income numbers (assuming arguendo that it impacted operating income numbers at all. 2) And, as a corollary, if the overpayment is ever refunded, it won't impact current operating income numbers. Now, the USPS is saying that, if they got the refund, it would help them prefund their retirement as required by law. Which would be, obviously, great! But the operating income numbers don't count the prefunding, so again, this would have no impact on the operating income figures. And if we move beyond the technical accounting stuff to the big picture, the bottom line is that the USPS is currently losing money on their day-to-day operations, excluding the pension prefunding. So it doesn't matter if they get a refund, or they mug a leprecaun for his pot of gold - no one-off payment is going to change their relatively dire financial situation. To change that, they need to restructure. A private company would look to close, consolidate, downsize, embrace new technologies, and possible use bankruptcy to shed legacy debts and renogotiate labour contracts. The USPS is either prevented or seriously hampered from pursuing any one of these - and ultimately the blame for that must be laid at Congress. (Which is the same bottom line that the people upset about the pension prefunding and the earlier overpayment have. Everyone agrees that Congress has almost complete blame and responsibility.)
    - OpieCunningham 15y ago
      I looked a bit and at every instance I found, the USPS is operationally profitable when pension prefunding is ignored. This is contrary to your claim. So if these other sources are correct, that $75 - $80 billion would go a long way towards covering the $55 billion prefunding mandate. Might even be able to take the remainder and modernize for increased efficiency, thereby further increasing profitability.
      - Lazare 15y ago
        Heh. Financial results for organizations like the USPS are not some black mystery; you don't need to rely on anonymous sources, or conflicting reports. http://about.usps.com/who-we-are/financials/periodic-reports-8k/11-16-2011.pdf http://about.usps.com/who-we-are/financials/periodic-reports... And now you know. (See, in particular, page 9 of the PDF - the second slide in the deck. Revenue down sharply, expenses up very slightly, EXCLUDING the prefunding requirement.)

Lazare 15y ago

Nope, 'cause no matter what the truth (or the resolution) of that particular dispute is, it won't impact the numbers for the last two years. It might well change the numbers for FY 1961 or so though. :)

OpieCunningham 15y ago
I'm not sure I follow. Are you suggesting that if there was an accounting error, the USPS lost all $80 billion in 1961? Perhaps you're simply unfamiliar with the accounting error issue as outlined in the article.
- Lazare 15y ago
  Okay, first, operating income may or may not include pension expenses; it depends on a lot of details. According to reports, there was a historical error, and over some number of years, back in the 60s, the USPS paid in "too much" (how much? Less than $80b...how much less, nobody seems to know). If they booked that as an operating expense, that may have shown up in decreased operating income during those years. That means that, if the money was refunded, it might or might not lead to a restatement of their 60s-era operating income, depending on whether the original overpayment had been counted as an operating expense. But everyone seems to be agreed that the issue, whatever it was, ended some time ago; probably during the 70s when there was a big change in how the USPS handled pensions. And that leads us to two conclusions: 1) The overpayment is not ongoing, and is not therefore impacting current operating income numbers (assuming arguendo that it impacted operating income numbers at all. 2) And, as a corollary, if the overpayment is ever refunded, it won't impact current operating income numbers. Now, the USPS is saying that, if they got the refund, it would help them prefund their retirement as required by law. Which would be, obviously, great! But the operating income numbers don't count the prefunding, so again, this would have no impact on the operating income figures. And if we move beyond the technical accounting stuff to the big picture, the bottom line is that the USPS is currently losing money on their day-to-day operations, excluding the pension prefunding. So it doesn't matter if they get a refund, or they mug a leprecaun for his pot of gold - no one-off payment is going to change their relatively dire financial situation. To change that, they need to restructure. A private company would look to close, consolidate, downsize, embrace new technologies, and possible use bankruptcy to shed legacy debts and renogotiate labour contracts. The USPS is either prevented or seriously hampered from pursuing any one of these - and ultimately the blame for that must be laid at Congress. (Which is the same bottom line that the people upset about the pension prefunding and the earlier overpayment have. Everyone agrees that Congress has almost complete blame and responsibility.)
  - OpieCunningham 15y ago
    I looked a bit and at every instance I found, the USPS is operationally profitable when pension prefunding is ignored. This is contrary to your claim. So if these other sources are correct, that $75 - $80 billion would go a long way towards covering the $55 billion prefunding mandate. Might even be able to take the remainder and modernize for increased efficiency, thereby further increasing profitability.
    - Lazare 15y ago
      Heh. Financial results for organizations like the USPS are not some black mystery; you don't need to rely on anonymous sources, or conflicting reports. http://about.usps.com/who-we-are/financials/periodic-reports-8k/11-16-2011.pdf http://about.usps.com/who-we-are/financials/periodic-reports... And now you know. (See, in particular, page 9 of the PDF - the second slide in the deck. Revenue down sharply, expenses up very slightly, EXCLUDING the prefunding requirement.)