Trump apparently believes that the US Post Office is making Amazon rich by charging so little to send packages and he wants that to change now!
Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!
— Donald J. Trump (@realDonaldTrump) December 29, 2017
It is true that the Post Office does lose a lot of money, but I”m pretty sure that’s not because of Amazon. According to Jay Caruso, USPS is actually a profitable business which uses that money to subsidize the mail delivery portion of the Post Office:
Actually, USPS package delivery is a profitable arm of the service which helps subsidize letter and rural delivery. USPS also benefits from Amazon-built sort facilities that feed into USPS’s last mile network. https://t.co/mouRPZtna8
— Jay Caruso (@JayCaruso) December 29, 2017
Mike Sisak, an AP reporter, suggests the Post Office losses actually come from the fact that Congress forces it to prepay billions into it’s retiree health benefits plan:
USPS’ losses are attributed to a Congressional mandate to prepay billions in retiree health benefits. Without that, it’d be profitable. Last year, it saw revenue growth of $2.4 billion, or 15.8% on shipping/packages alone. More: https://t.co/JoXMeQpI7p https://t.co/mSnTlLWjKh
— Mike Sisak (@mikesisak) December 29, 2017
Here’s what he’s referring to from the USPS link:
First, let’s look at current funding levels. The Postal Service has set-aside cash totals of more than $335 billion for its pensions and retiree healthcare, exceeding 83 percent of estimated future payouts. Its pension plans are nearly completely funded and its retiree healthcare liability is 50 percent funded – much better than the rest of the federal government. But getting to this well-funded position has been painful. The Postal Service’s $15 billion debt is a direct result of the mandate that it must pay about $5.6 billion a year for 10 years to prefund the retiree healthcare plan. This requirement has deprived the Postal Service of the opportunity to invest in capital projects and research and development.
So there you have it. Another day, another ignorant tweet from the president. With all the resources at his disposal, you’d think he could bone up on something like this before he unfairly targets a company like Amazon.