Postal Service Could Be Debt-Free by ‘99
After three years of surprise billion-dollar profit, the U.S. Postal Service is pushing to be debt-free by 1999, reversing a history of poor performance and financial returns.
Postal Service money manager Michael J. Riley believes the increased profit has led to growing pride among mail carriers and executives and could mean a moneymaking future for the agency.
“People take great pride in how much they can save . . . how well they can beat the budget,” Riley said. “People need to be winners, they need to feel like they’re winners.”
The Postal Service will finish 1997 with a $1.26-billion profit. That follows profit of $1.77 billion in 1995 and $1.57 billion in 1996. The strong three-year performance trimmed the agency’s long-term financial deficiency from $5.9 billion to $1.36 billion.
“Our history over the last few years has been beating our budget, and I hope that continues,” said Riley, predicting that a 1-cent postage stamp rate increase, starting July 1 at the earliest, could mean a profitable year in 1998--although a bad winter could cut into returns.
“We think this rate increase is just enough to be able to budget a small profit for ’99 and maybe, if we get lucky, a big profit,” Riley said.
With the post office profitable, people might wonder why there’s a need to increase the cost of stamps--now 32 cents for regular mail inside the United States.
Riley maintains that sending mail is still cheaper because the cost of living has gone up since the last stamp price hike in 1995. “You give people a price cut by price increases less than inflation,” he said.
Riley joined the post office in 1993, a year the agency lost $1.8 billion.
“The fall of ’93 was really tough, service was declining, there were stories about mail burning in Chicago, the financial results were horrible,” he recalled.
As a result, the agency successfully instituted a short-term incentive system to spur better performance by managers and mail carriers.