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Postal Service Is Nearing Default as Losses Mount (USPS wants a taxpayer bailout for their union)
ny times ^ | 9/4/2011 | steven greenhouse

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 doesn’t act, we will default.”

In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s 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 agency’s work force — despite a no-layoffs clause in the unions’ contracts.

The post office’s 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 office’s costs. Labor represents 80 percent of the agency’s 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 agency’s 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 ...


TOPICS: Extended News; News/Current Events
KEYWORDS: postalservice; usps
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1 posted on 09/05/2011 3:39:43 AM PDT by tobyhill
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To: tobyhill

Sign of the times. Working for he post office was a sure thing for life. Damn algore for inventing the internet.


2 posted on 09/05/2011 3:42:30 AM PDT by y6162
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To: tobyhill
The party faithful have to be taken care of.
3 posted on 09/05/2011 3:44:24 AM PDT by Rashputin (Obama is insane but kept medicated and on golf courses to hide it)
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To: tobyhill

“Labor represents 80 percent of the agency’s 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.


4 posted on 09/05/2011 3:49:19 AM PDT by kittymyrib
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To: tobyhill

Time to privatize the USPS...or turn it into a franchisor and sell territories ala UPS post and package stores.


5 posted on 09/05/2011 3:51:27 AM PDT by RoosterRedux
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To: tobyhill

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.


6 posted on 09/05/2011 3:53:33 AM PDT by DB
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To: tobyhill
Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx,

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.

7 posted on 09/05/2011 3:57:03 AM PDT by USS Alaska (Nuke the terrorist savages.)
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To: DB
I have one bill that still only uses snail-mail but if the USPS does go out of business that one company will figure out how to get the info to me.
8 posted on 09/05/2011 3:57:42 AM PDT by tobyhill (A Democrat that doesn't lie would be a lie)
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To: tobyhill

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!


9 posted on 09/05/2011 4:02:02 AM PDT by Apparatchik (If you find yourself in a confusing situation, simply laugh knowingly and walk away - Jim Ignatowski)
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To: tobyhill

Impeccable timing.

Do it while Ostupid is in office and they will surely be saved and the taxpayers fleeced some more.


10 posted on 09/05/2011 4:04:07 AM PDT by Bon mots ("When seconds count, the police are just minutes away...")
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To: tobyhill

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.


11 posted on 09/05/2011 4:16:49 AM PDT by Vaduz
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To: RoosterRedux

Can’t really privatize it as the Constitution stipulates that it’s a function of the US Federal government.


12 posted on 09/05/2011 4:18:01 AM PDT by gogogodzilla (Live free or die!)
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To: DB
USPS delivered mail is neither a right or a constitutionally mandated service.

Uh. What?

Section. 8. 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 establish Post Offices and post Roads;

13 posted on 09/05/2011 4:18:12 AM PDT by OnlyTurkeysHaveLeftWings
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To: tobyhill

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.


14 posted on 09/05/2011 4:19:48 AM PDT by exPBRrat
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To: DB

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.


15 posted on 09/05/2011 4:20:25 AM PDT by mdmathis6 (Christ came not to make mankind into God but to put God into men!)
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To: DB
A la the US constitution:

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;

To establish Post Offices and post Roads;


16 posted on 09/05/2011 4:23:16 AM PDT by gogogodzilla (Live free or die!)
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To: gogogodzilla
It's being functionally privatized anyway...by the internet, phones, FedEx, etc. And that (plus mismanagement) is what's killing it.

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.

17 posted on 09/05/2011 4:23:58 AM PDT by RoosterRedux
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To: RoosterRedux
Time to privatize the USPS...or turn it into a franchisor and sell territories ala UPS post and package stores.

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.

18 posted on 09/05/2011 4:24:53 AM PDT by Big Giant Head (Two years no AV, no viruses, computer runs great!)
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To: tobyhill

Dump ‘em!


19 posted on 09/05/2011 4:26:14 AM PDT by gunnyg ("A Constitution changed from Freedom, can never be restored; Liberty, once lost, is lost forever...)
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To: tobyhill

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.”


20 posted on 09/05/2011 4:32:24 AM PDT by Rearden (Deo Vindice)
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To: Big Giant Head
I'm not anti-USPS, I'm just offering solutions to its cash-flow problem.

For-profit businesses have incentives (and freedoms) that government-subsidized and/or owned enterprises don't. While privatization isn't the answer to every problem, it works great for some operations if structured and managed properly.

21 posted on 09/05/2011 4:32:40 AM PDT by RoosterRedux
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To: Big Giant Head

“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.”

Those workers deserve better management.


22 posted on 09/05/2011 4:35:41 AM PDT by Rennes Templar
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To: tobyhill

Another example of union ruination. Postal workers can get the best and same insurance at a fraction of the cost other federal employees must pay. “Collective bargaining” has caused this bankruptcy. Unless there’s an extremely dramatic change it needs to fold and be privatized.


23 posted on 09/05/2011 4:37:56 AM PDT by whatshotandwhatsnot (Islam wants you dead.)
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To: tobyhill
To establish Post Offices and post Roads;

There is nothing in the Constitution that requires a daily delivery of subsidized junk mail, or even delivery.

24 posted on 09/05/2011 4:38:30 AM PDT by Bernard (When the only Problem is overspending, all the Solutions look like TAX INCREASES to liberals...)
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To: Big Giant Head
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.

It used to be that way. Now all the carriers drive. They never have to worry about snow, because if we get more than an inch or two of snow they deliver the next day. If it was so bad for the carriers there would not be a waiting line miles long for their jobs.
25 posted on 09/05/2011 4:39:55 AM PDT by John D
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To: DB

“On top of that, why is government competing with the private sector delivering parcels in the first place?”

At the time the post office was envisioned as part of The Constitution, writing letters was as important as radio or television is today. It was a strategic military and commercial necessity. I don’t think the post office became a political playing field until after Vietnam when there were hundreds, perhaps thousands of unemployable veterans. The post office became not just a pork barrel jobs program, but a political cash cow. There was in the neighborhood of a million voters working in the PO so Congress took care of the postal workers with special retirement schemes.

My Mom is fond of saying “Pigs get fat but hogs get slaughtered.” The Post Office has become a hog when the people paying the bills are losing their homes. It’s time to let the Post Office go. The function it performs is no longer vital and can be handled better by commercial interests.


26 posted on 09/05/2011 4:44:40 AM PDT by Gen.Blather
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To: Vaduz

The no layoff clause is seriously hurting the ability of the USPS to trim the workforce. But here is what I don’t understand;

The USPS just signed a new contract with the APWU in May. We were all expecting the no layoff clause to go, and modest pay cuts. Instead, the no layoff clause was EXPANDED to cover all current employees. In the previous contract, layoffs were prohibited only for career employees with six years of service.

In addition, our pay was not cut, but frozen until 2013. (We haven’t had a raise since 2009, and that was 1.2%).

One problem not discussed in this article is AGE. Our workers are old! I work in a package sorting facility, and the average age of workers is somewhere between 55 and 57 years old. We desperately need an injection of a little youth into the workforce.


27 posted on 09/05/2011 4:48:50 AM PDT by TnGOP (Petey the dog is my foriegn policy advisor. He's really quite good!)
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To: Vaduz

The no layoff clause is seriously hurting the ability of the USPS to trim the workforce. But here is what I don’t understand;

The USPS just signed a new contract with the APWU in May. We were all expecting the no layoff clause to go, and modest pay cuts. Instead, the no layoff clause was EXPANDED to cover all current employees. In the previous contract, layoffs were prohibited only for career employees with six years of service.

In addition, our pay was not cut, but frozen until 2013. (We haven’t had a raise since 2009, and that was 1.2%).

One problem not discussed in this article is AGE. Our workers are old! I work in a package sorting facility, and the average age of workers is somewhere between 55 and 57 years old. We desperately need an injection of a little youth into the workforce.


28 posted on 09/05/2011 4:49:19 AM PDT by TnGOP (Petey the dog is my foriegn policy advisor. He's really quite good!)
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To: Big Giant Head

hahaha you got to be kidding.
First of all, its not the pay, its the bennies. Even though the pay is too high compared to the private sector.

Its like most of guv.con. Its a social engineered work program for mostly incompetent parasites.


29 posted on 09/05/2011 4:57:13 AM PDT by winodog
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To: Bernard
There is nothing in the Constitution that requires a daily delivery of subsidized junk mail, or even delivery.

Yes. The Constitution might mandate the establishment of post offices and post roads, but God help you if you try to USE them. There's no way, logistically speaking, if nothing else, to make that idea work. No post office in the country is capable of serving its neighborhood/town/city from a counter in a building.

You think lines are bad now?
30 posted on 09/05/2011 5:00:20 AM PDT by OnlyTurkeysHaveLeftWings
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To: Rearden

I work there and I see the full spectrum. A lot of us really want to see the systemic changes made that would leave us leaner, more efficient, and competitive once again.

Some seem oblivious to it all.

There are some that do as little as possible, don’t care if you ever get your mail - or if their employer is solvent and providing a good value. They just want what they are “entitled” to.

Union rules. You can put them out the door, but the union will have them back in a month, with full pay for time off and a handful of grievances. Insanity!


31 posted on 09/05/2011 5:04:30 AM PDT by TnGOP (Petey the dog is my foriegn policy advisor. He's really quite good!)
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To: tobyhill

BU,Bye!


32 posted on 09/05/2011 5:05:06 AM PDT by bikerman
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To: tobyhill

Not No, but H___ No.

Let the untions eat some like we taxpayers do


33 posted on 09/05/2011 5:06:58 AM PDT by bestintxas (Somewhere in Kenya, a Village is missing its Idiot.)
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To: OnlyTurkeysHaveLeftWings; DB

There are people who just read past the parts they don’t like int he Constitution. Obama does it, and DB does it , and a bunch of others do too.


34 posted on 09/05/2011 5:12:02 AM PDT by muawiyah
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To: tobyhill

Ain’t nothing going to get fixed in the US until people have to “get it” that all the promises made in the past were all lies that were by nature, never going to be doable.

We have more people waiting for payouts for sitting home on their arse than we have people actually working.


35 posted on 09/05/2011 5:13:20 AM PDT by dforest
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To: whatshotandwhatsnot

Just curious. I’ve heard that before, but don’t know if it is true. I work for the USPS and pay about $300/month for family coverage. That is up over 200% from last year.

Still a bargain vs most private companies, but how much higher are premiums for the rest of the FedGov? Freepers, anyone know?

Also, we get all kinds of health insurance options from the union. They all suck, but they offer them. Most are lower cost catastrophic coverage, STD, LTD, etc.


36 posted on 09/05/2011 5:14:00 AM PDT by TnGOP (Petey the dog is my foriegn policy advisor. He's really quite good!)
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To: OnlyTurkeysHaveLeftWings; Bernard
Carrier delivery was started during the Civil War so that thousands of people would no longer have to line up at the post office each day waiting on news from their soldiers in the war.

People who oppose the constitutionality of carrier delivery are against national defense.

37 posted on 09/05/2011 5:14:32 AM PDT by muawiyah
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To: muawiyah

Seriously. “I don’t like it, therefore I reject reality and substitute my own.”


38 posted on 09/05/2011 5:15:51 AM PDT by OnlyTurkeysHaveLeftWings
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To: DB
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.

You would think, since the gov doesn't need to make a profit, that they would run FedEx and UPS out of business ... even without that "burden-of-making-profit" they are losers. Shut it down and put it on the museum wall right beside the blacksmith's shop.

39 posted on 09/05/2011 5:16:40 AM PDT by ThePatriotsFlag (If Obama's the "Answer" ... how stupid was the "QUESTION?")
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To: tobyhill

Whatever else it is, it’s Obama’s fault! (Happening on Obama’s watch. Post hoc, propter hoc. Take it to the libs.)


40 posted on 09/05/2011 5:21:51 AM PDT by Lady Lucky (Heavy the head that wears the tiara.)
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To: TnGOP
USPS hasn't done much new hiring of new people for 20 years ~ it's been Baby Boomers all the way down.

They are now beginning to retire and that's breaking the back of the medical insurance operations.

Frankly, you probably won't get a real raise out of USPS (presuming it survives as an entity and isn't just disposed of the way they got rid of the Post Office Department) for half a century.

This is a consequence of mechanization, automation, computerization, improved processes and robotics.

Those 5 things are creating the greatest and most massive unemployment ever seen in this nation ~ ain't nobody goin' back to work, and even though USPS managed to get 700% productivity improvement since its inception, mail volumes quit growing in recent years but the productivity improvement continues to surge ~ so instead of being able to keep it hidden with additional mail, the employees will now need to take it in the rear.

BTW, although I worked in and among that thin film of folks who create the words and make USPS procedures stick together with the physical reality for many years, it's THEIR FAULT this is happening. If you just got rid of the smart guys who created the productivity improvements, the place would turn to cr*p in months and you could keep your jobs.

41 posted on 09/05/2011 5:22:16 AM PDT by muawiyah
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To: ThePatriotsFlag

USPS must provide universal service. UPS and FEDEX only provide service where it’s economical to do so.


42 posted on 09/05/2011 5:23:18 AM PDT by muawiyah
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To: kittymyrib

Remodel their organizaiton patterned on the FedEx model which according to reports, spends only 30% on labor. That or they can file for unemployment. Time to get lean and mean.


43 posted on 09/05/2011 5:24:19 AM PDT by semaj
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To: ThePatriotsFlag; DB
The Post Office Department pioneered parcel delivery to homes and businesses in the 1920s as an experiment.

In those days all you had was Railway Express. They didn't do delivery so if you expected a parcel you had to go to the train station to get it.

BTW, railway express was so persuasive with Congress that they managed to keep the Post Office Department out of the business of larger parcels even after passenger rail service had been pretty much discontinued ~ (the baggage and express cars on passenger trains carried the Railway Express parcels).

That is what incentivized the Post Office Department's employees at Headquarters to quit and buy UPS which they reconfigured into the sort of parcel and express package service they'd developed for the Post Office Departent.

So, "why" ~ that's "why"!

44 posted on 09/05/2011 5:27:22 AM PDT by muawiyah
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To: semaj
FedEx has a business model developed by a fellow (Smith) who was the roommage in college of a guy whose father was Postmaster of Gary Indiana. That Postmaster was the first one to come up with the model.

Later on USPS developed a competing service called Express Mail.

BTW, the FedEx business model is simple ~ it's an airline with delivery trucks. It's owned by Chinese.

45 posted on 09/05/2011 5:29:39 AM PDT by muawiyah
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To: tobyhill

I hope they fire at the deadwood...there is a Hussein cultist occupying space at my local Post Office. Drives a huge gas guzzling truck with a Bush-bashing bumper sticker...always seems to have an attitude.


46 posted on 09/05/2011 5:32:02 AM PDT by Recovering_Democrat
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To: tobyhill

Raise the price on Junk Mail to that on standard mail and watch it disappear
95% of the mail I receive is for soliciting money or advertising


47 posted on 09/05/2011 5:32:27 AM PDT by uncbob
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To: TnGOP

How about no layoffs, just outright firing?


48 posted on 09/05/2011 5:38:22 AM PDT by Recovering_Democrat
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To: muawiyah

The USPS first class rates are a deal that would go up immediately if taken over by Fedex or UPS. IMO, the problems are the union and the attitude of the carriers on the street which are intertwined. You could make the USPS over as a true service at your doorstep with a smile.

Of course I’m dreaming.


49 posted on 09/05/2011 5:39:15 AM PDT by Thebaddog (Shakey Jake said, " The hippies will never survive!")
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To: OnlyTurkeysHaveLeftWings

Just because the USPS is Constitutionally authorized doesn’t mean it’s Constitutionally mandated. Read it again.


50 posted on 09/05/2011 5:41:20 AM PDT by dinodino
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