You know why the Postal Service is in trouble, don't you?

It's the internet, with its 'impossible to compete against' delivery of messages. Or it's the Postal Service's legendary bureaucracy. Or the unions that give postal employees better salaries and benefits than the private sector.

Or not.

7 News reporter John Moore spent the last month assessing what the loss of post offices means in northern New York, and the reasons for the Postal Service's difficulties.

What emerged is a more complex picture of the Postal Service's woes, one that is not consistent with the popular image of wasteful government spending or a business model doomed to failure.

Most importantly, a 2006 law passed by Congress appears to have crippled the Postal Service's finances. That law required the Postal Service to 'pre-pay' employee benefits for many years into the future, a decision that cost the Postal Service billions of dollars.

It leaves people inside the system scratching their heads.

"That is to say, an employee or a child was born 20 years from now, will hopefully retire in 35 years, we have to pay for their health benefits for when they retire, today," said Ken Montgomery, the head of the letter carriers union in Rochester.

"I think if the mandate was never imposed, the postal service would be operating right about break-even like we had been in 2006," Edward Phalen, the Postal Service manager for upstate New York said. "Possibly even had somewhat of a profitability."

To be sure, the internet has affected the Postal Service, as it has most things. But if you go back only five years, to 2006, the Postal Service moved a record 213 billion pieces of mail. The internet was already a dominating, world changing force at that point.

The recession was a truer turning point for the Postal Service, officials say. As business worsened, the volume of mail dropped dramatically.

All that said, the Postal Service has issued a revised five year cost cutting plan that includes   dropping Saturday deliveries, raising the price of a stamp and closing up to 3700 post offices.

Postmaster General Patrick Donahue said the proposals will save $20 billion a year by 2015.

It's the kind of talk that wrorries people in places like Wanakena, where the post office is a social center and - in a community with very limited internet access and no cell phone service - a communications hub.

"We do a little bit of mail order here," said Rick Kovacs, who runs he general store. "So every day we'll step over with packages to go out."

Click on the picture to watch part 1 of John's report. The second part, Wednesday, will deal with the politics of the Postal Service and whether it's too late to save the institution.

For more reading:

A Washington Post report from last week on the proposed cuts

A web site that has questioned the official version of the Postal Service's problems

A press release from Congressman Bill Owens on an effort (which Owens is part of) to stop closing post offices