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December 13, 2005
Mr. Andy Serwer
CNN/Time Warner, Inc.
Atlanta, GA
Dear Mr. Serwer,
I was on travel Wednesday when you discussed the financial condition of the U. S. Postal Service
with Soledad O’Brien but a number of my colleagues were tuned in, as the number of messages
awaiting me would attest when I returned.
You reported on the good news that the Postal Service is debt free, a debt you ascribed to
years of mismanagement. In fact, at the turn of this century, we made a significant investment in
facilities and equipment, a decision that’s paying off in terms of increased efficiencies and service
enhancements. As you know it’s a common business practice to borrow money to finance capital
improvements and that’s what we did. Long term debt peaked at $11 billion in 2001 but now, as
already noted, it’s paid off.
You said further that in 2005, we delivered “200 million pieces of mail,” a feat you called “amazing.”You might find it even more amazing that it was 200 billion, not million, 212 billion to be more
precise.
You then moved on to the admittedly confusing circumstance that, despite ending 2005 $1.4 billion in the black, postage rates would increase on January 8. (Although, interestingly, our private sector
counterpart, UPS, ended 2004 $3.3 billion in the black, increased prices by almost 4% in January of
2005 and nobody thought a thing of it.)
The escrow angle is not an easy one to tell. In 2001, the Office of Personnel Management audited
the payments the Postal Service was making as its participation in the Civil Service Retirement
System. It showed that we were on course to significantly overpay this obligation and since the
payment schedule is set by law, Congress stepped in to adjust the payment schedule.
The Congress decided to eliminate the overpayment for 2003, ‘04 and ‘05 but reinstated it for ‘06
directing that the money be placed in escrow. That new law indicated the Congress would provide
direction on the disposition of those funds at a later date. That direction has yet to come but the
escrow obligation remains.
Those on Capitol Hill had advanced several suggestions on how that money should be used
(prepaying retiree health costs is probably the most popular) but no one in Congress — or anyone
else for that matter — has said the escrow exists because the Postal Service has “been so poorly
managed over the years that Congress says, you better have some money on the side because you
guys don’t necessarily know what you’re doing” except you.
The fact is that today, the Postal Service is delivering more mail (212 billion pieces) to more
addresses (144 million) with 1985 staffing levels (700,000), achieving record-breaking, independently
measured service and customer satisfaction scores, all the while being out of debt and in the black.
I hope you’d agree that at the very least, that’s not bad.
Sincerely,
Azeezaly S. Jaffer, Vice President,
USPS Public Affairs and Communications |
