Facing a projected $6.4 billion loss, the Coming Postal Service Bailout

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    Apr 06, 2011 4:26 AM GMT

    The federal government isn’t the only entity in Washington about to hit the debt ceiling: So is the U.S. Postal Service, the independent agency created four decades ago to take over and streamline the task of mail delivery.

    Facing a projected $6.4 billion loss this year, on top of a record shortfall in fiscal 2010, the Postal Service is expected to slam into the $15 billion statutory debt limit established by Congress by the end of the current fiscal year on Sept. 30. At that point, it could be faced with the choice of running out of cash or defaulting on its sizable pension obligations, including a required $5.5 billion annual payment to fund future retiree health costs. This has intensified efforts on Capitol Hill to scrutinize Postal Service management practices, as well as to find ways to provide potential short- and long-term relief to the beleaguered agency.

    House Oversight and Government Reform Committee Chairman Darrell Issa, R-CA, convened a hearing today to take aim at the Postal Service’s recent deal with the American Postal Workers Union, representing more than one-third of the agency’s 572,000 person work force. The deal, which still requires ratification by the union’s membership, calls for a two-year pay freeze followed by a 3.5 percent wage increase over three years. "Eighty percent of the Postal Service's operating expenses are workforce-related. Costs must be reduced to align them with falling mail volume and declining revenue projections,” Issa declared.

    Related: http://money.cnn.com/2009/08/03/news/companies/usps_postal_service_privatize.fortune/ "Dear USPS: Consider privatizing - As the use of first-class mail plunges, the U.S. Postal Service has a huge overcapacity, but it needs Congressional approval to cut back."
  • Webster666

    Posts: 9225

    Apr 06, 2011 6:23 AM GMT
    I'm surprised that this hasn't come up for discussion, sooner.

    But, as usual, the Republicans are ignorantly blabbering about what should be done. Congressman Darrell Issa warns that the Post Office needs to cut costs, even though they've been aggressively cutting costs for the past ten years or so.

    This is the same stupid argument that the Republicans make about the Federal government deficit. The only solution they can see is cutting costs.

    The truth is that computers have turned the Post Office (in it's current form) into a fairly useless entity.

    I already pay all of my bills on line.
    And, I have money directly deposited into my bank account.
    The only things that I can think of that are left are receiving packages and sending certified (or registered) mail.

    Maybe the answer is for the Post Office to cut out all mail delivery except the above 2 items.

    But, what about all the people who don't have computers ?

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    Apr 06, 2011 12:50 PM GMT
    How else would the GOP get its massive amount of junk political mailers out to joe 6 pack?