Skip to comments.Postal Service Is Nearing Default as Losses Mount (USPS wants a taxpayer bailout for their union)
Posted on 09/05/2011 3:39:39 AM PDT by tobyhill
The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.
Our situation is extremely serious, the postmaster general, Patrick R. Donahoe, said in an interview. If Congress doesnt act, we will default.
In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agencys deficit, which will reach $9.2 billion this fiscal year. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers nearly one-fifth of the agencys work force despite a no-layoffs clause in the unions contracts.
The post offices problems stem from one hard reality: it is being squeezed on both revenue and costs.
As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail.
At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post offices costs. Labor represents 80 percent of the agencys expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.
The Senate Homeland Security and Governmental Affairs Committee will hold a hearing on the agencys predicament on Tuesday. So far, feuding Democrats and Republicans in Congress, still smarting from the brawl over the federal debt ceiling, have failed to agree on any solutions.
(Excerpt) Read more at nytimes.com ...
Sign of the times. Working for he post office was a sure thing for life. Damn algore for inventing the internet.
“Labor represents 80 percent of the agencys expenses,”
Unbelievable. No doubt this bloated union-giveaway “service” will whine about having to close right around Christmas time, when the children want to send their letters to Santa. And Dear Reader will get Bernanke to print more shrinking dollar bills “for the children.” If Republicans object, they will be the Grinch who stole Christmas. These scripts write themselves now.
Time to privatize the USPS...or turn it into a franchisor and sell territories ala UPS post and package stores.
Then close it.
Get rid of their monopoly and let the private sector fill the need.
USPS delivered mail is neither a right or a constitutionally mandated service.
On top of that, why is government competing with the private sector delivering parcels in the first place? The USPS doesn’t have to make a profit while UPS and FedEx do.
UPS is union and their labor costs reflect it as their labor costs are 66% higher than Fed Ex.
Given the choice I always use Fed Ex.
Indeed. I, for one, hope that the PMG has his bluff called and temporarily shuts the USPS down. Then we will see how obsolete and unnecessary it is (much like other certain federal entities). Let the free market loose!
Do it while Ostupid is in office and they will surely be saved and the taxpayers fleeced some more.
The no-layoff clauses is insane only the gov would sign on to that,time to get rid of some bodies,sell it of fold.
JFK’s ties to unions caused this mess,par for the democrat party.
Can’t really privatize it as the Constitution stipulates that it’s a function of the US Federal government.
Good grief it seems whatever the government does turns into a goat screw. Hard to believe a business with a ‘monopoly’ like hold with no competition can go broke. That what political appointees will do for any business...GM take note.
Actually the Postal Service is a constitutional mandated service, look it up. Outsourcing all male delivery services to businesses makes Americans vulnerable should those businesses fail or their services become inconsistant.
Now it doesn’t mean that some services couldn’t be eliminated such as heavy package delivery since they do compete with private business. You could let some businesses bid to deliver mail service under a federal charter, but in the end the constitution mandates a federal postal service. If folks don’t like the Post office provision, then the Constitution will need to be amended.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
The persons who put it in the Constitution would be blown away if they could see the technological advancements that have turned it into an anachronism.
The USPS is supposed to be supporting itself like a private business, but not post a profit. It's supposed to break even. It's also supposed to support the Federal employees retirement and health systems. I believe that is what the "default" payment statement is referencing. The USPS is supposed to be prepaying healht and retirement for years and years out into the future, if I'm understanding it correctly.
IF the USPS posts a profit, where do y'all suppose that excess cash goes? It's going to go into the general fund. IF the USPS posts a loss, it goes into the headlines.
Labor costs are 80% of total costs of running the "business?" Shocking, it's just like any other labor intensive business.
If the USPS was allowed to truly operate as a free business, it could keep profits, fund it's own retirement and health systems and save lots of cash. Because it's still tethered to the Government, it takes an act of Congress to make changes, literally.
While I admit the unions are always a problem (no layoff clause? really?), the Post Office's biggest problem is the cojoining with the hog-sucking federal government.
I also invite all of you anti-USPS posters to walk a mile in a mail carrier's shoes. Or seventeen miles. In 104 degrees and humid. Just a couple of weeks. Or in ten inches of snow for 17 miles. Or, like last winter here, 18 inches of snow.
Then decide if they're overpaid.
I have a close friend who works for the Post Office. Would you like to take a guess how she and her Union brothers feel about the country and the rest of us?
” Just give me my pension and get out of my way. Who cares about the rest of you.”