USPS Posts $3.1 Billion Loss In Q3, Warns Of Default [More Stimulus Money Needed?]

YahooNews ^ | August 05, 2011

[Steelfish]

USPS Posts $3.1 Billion Loss In Q3, Warns Of Default By Emily Stephenson

WASHINGTON (Reuters) - The U.S. Postal Service posted a net loss of $3.1 billion in its third quarter and warned again it would default on payments to the federal government if Congress did not step in. Total mail volume for the quarter that ended June 30 fell to 39.8 billion pieces, a 2.6 percent drop from the same period a year earlier, as consumers turn to email and pay bills online.

The mail carrier, which does not get taxpayer funds, has struggled to overhaul its business as mail volumes fall. It has said personnel costs weigh heavily and is facing a massive retiree health benefit prepayment next month.

"We are experiencing a severe cash crisis and are unable to continue to maintain the aggressive prepayment schedule," Joseph Corbett, the agency's chief financial officer, said in a statement.

"Without changes in the law, the Postal Service will be unable to make the $5.5 billion mandated prepayment due in September." Congress, which last week ended a vitriolic debate about the U.S. government's debt levels and budget deficit, is now in recess until early September.

USPS cut work hours during the quarter by 3.1 percent compared to the previous year, when quarterly net losses were $3.5 billion.

[Sea Parrot]

So, why are they now asking congress for bilion of $ more?

[okie01]

So, why are they now asking congress for bilion of $ more?

Because, now, they are losing money. They were self-supporting before.

[Sea Parrot]

Self supporting before what, BC? Give some provenance to that statement please.

[okie01]

Self supporting before what, BC? Give some provenance to that statement please.

The USPS financial statements are a matter of public record. You can look them up for yourself.

[Sea Parrot]

In other words, after your statement about all your research, you have no proof.

[yuleeyahoo]

It is Constitutionally required.

[Oceander]

What part of the Constitution is that in?  It certainly isn't required under the powers enumerated in section 8 of article I of the Constitution.

[Oceander]

I love the continued lies about how the USPS doesn't get taxpayer money. First, the government - we the taxpayers - have a cumulative "investment" in the USPS of a little over $3 billion dollars, and we ponied up another $45 million in "capital contributions" during 2010 (technically, sometime in the period between September 30, 2009, and June 30, 2010, according to the latest USPS financial statements). Also, the USPS has massive "debts" it technically "owes" to the Federal Financing Bank - a "government-owned corporation under the general supervision of the Secretary of the Treasury" according to Note 3 of the latest USPS financials, and, BTW, that debt bears below market interest rates ranging from 0.135% for its overnight and short-term revolving accounts with the FFB (i.e., its credit cards), to 2% and up to 3.9% on its long-term debt.

Giving the USPS below-market interest rate loans is just an underhanded, deceitful way of giving additional taxpayer money to the USPS - if the USPS were a private entity receiving below-market rate loans from another private company it would have to recognize constructive income from that below market rate because, as the tax collector - and wall street banks - figured out long ago, if you're paying less interest than you would have to pay in an arms length transaction, you're getting free money - your net wealth is increasing.

Just in case anyone cares, the USPS financials can be found here: http://about.usps.com/who-we-are/financials/welcome.htm.

Read 'em and weep.

Oh, and just in case anyone cares, the FFB puts out a list of the loans it has outstanding, with debtors' names, amounts and interest rates - it makes for some eye-opening reading. Give it a try, here: http://www.treasury.gov/ffb/press_releases/2011/07-2011.shtml

[okie01]

Go find it yourself, sir. That's what I did.

[Pelham]

“I love the continued lies about how the USPS doesn’t get taxpayer money....Just in case anyone cares, the USPS financials can be found here:”
http://about.usps.com/who-we-are/financials/welcome.htm

Well I went to the link you posted and looked through the 2010 Annual Report. On page 56 under the heading ‘Debt’ it says this:

“As an ‘independent establishment of the executive branch of the Government of the United States’ the Postal Service receives no tax dollars for ongoing operations, and has not received an appropriation for operational costs since 1982. We fund operations chiefly through cash generated from operations and by borrowing from the FFB”

So evidently the ‘continued lies’ are coming from the USPS itself. Were you aware that this was in their annual report when you linked to their financials?

[Sea Parrot]

I go with my original statement that the USPS has been suckling on the taxpayer teat for many years. And, nothing you have shown disproves it.

[okie01]

I go with my original statement that the USPS has been suckling on the taxpayer teat for many years. And, nothing you have shown disproves it.

What have you shown to support your assertion? Why, that would be nothing.

Obviously, you prefer your own mistaken notions to any facts which might contradict them. Accordingly, I've no interest in continuing this conversation. Nor in doing your work for you.

See ya around.

[yuleeyahoo]

Article I Section 8; To establish Post Offices & Postal Roads.

[yuleeyahoo]

Article I Section 8; To establish Post Offices & Postal Roads.

[Repealthe17thAmendment]

They have the unfriendliest customer service staff I have ever encountered. And not just in one post office. It must be part of their screening process.

[Sea Parrot]

http://www.sectalk.com/boards/images/imported/2011/02/WellBye-1.jpg

[Oceander]

Of course I was, why do you think I linked to them? Should I have linked to, say, the financials of McDonalds, perhaps? Does it surprise you in the least that the USPS - or any organ of the federal government - is not being scrupulously honest with you?

That is why any good company analyst will tell you that the notes to the financial statements are infinitely more useful and informative than the financial statements themselves - because that is where the truth is generally hidden.

[Oceander]

Did you read that language carefully? It doesn't require that post offices be created, it merely grants Congress the power to create them if it so chooses to do so. Easy come, easy go; Congress has just as much power to abolish the current USPS and leave all mail deliveries up to private services.

[Pelham]

Could you point out in the annual report the figure for the amount of tax money the USPS received?

[Oceander]

Where, pray tell, do you think that $45,000,000 in additional capital contributions the federal government made during the period September 30, 2009 to June 30, 2010, came from? Thin air? George Soros' personal funds? Royalties on Obama's next memoirs?

Beyond that, do you have even a nodding acquaintance with the concept of opportunity cost? If the federal taxpayer lent the USPS even a single dollar that could have been otherwise lent to another borrower at a higher rate of interest, then the foregone interest income - income that would have accrued to the federal taxpayer - was instead given to the USPS on account of the Federal Financing Bank having lent that dollar to the USPS.