Skip to comments.Postal Service Facing Default, Shutdown Without Congressional Intervention (Save yourself!)
Posted on 09/05/2011 10:57:27 AM PDT by tobyhill
The head of the U.S. Postal Service said in an interview that the organization will default -- perhaps as early as this winter -- unless Congress intervenes.
Postmaster General Patrick Donahoe's comments reflect a well-known reality that the Postal Service is in dire financial straits. The rise of email and online bill-paying has steadily eroded its profits over the years while labor costs soar. Donahoe is calling for a host of changes, including the elimination of Saturday delivery, to close a deficit projected to top $9 billion this year.
But he said Congress needs to step in to help keep the service alive.
(Excerpt) Read more at foxnews.com ...
America's mail institution will likely default on a $5.5 billion payment due at the end of this month and may have to shut completely down this winter.source.
If the rise of email is hurting their profits, that means they are continuing to employ people they don’t need. If America is sending 20% of its mail via email, then the USPS needs to reduce its work force. Or is that an impossibility because of the Postal Workers Union?
I used to love postal delivery. Especially as a kid way back when before answering machines and when a phone rang like a phone, not a digital beeping machine.
The mystery of a letter traveling across multiple states to arrive in my mail box for just a few cents (10, 15, 20), was just amazing to me.
That said, if they can’t pay their bills, they either need to go out of business, or else they need to allow private enterprise to compete with them.
If Fed Ex or some other delivery service were allowed to use the postal addresses and mail boxes, perhaps they could do it better and cheaper.
Or we just need to completely overhaul the pay, benefits, and pensions of the unionized postal employees.
Or we need to give it up and reduce it to only those services that people are willing to pay the full amount to cover. If it should cost $2 to deliver a letter across state and someone is willing to pay for that voluntarily, let the transaction proceed. If it requires stealing from Paul to pay Peter’s letter delivery, shut the system down.
Why this will be a huge issue over the next year is the same reason why defunding the military is a huge issue. If you defund such a massive enterprise, it will contribute heavily to unemployment, which is why we continue to subsidize such enterprises.
Congress really does have to step in.....I agree. They need to step in and look at bad management and union control and get rid of both.
Congress should call the USPS's bluff.
I say........boo-freakin’-hoo. They used to brag about being in the black, while they carelessly blew away all their profits.
Every time a USPS story is posted the apologists come out in force to defend the institution.
Which leads me to believe that a clause in the USPS union contract is to rebut any statement against the USPS that appears on any website.
More people to line up for the dictator’s civilian army.
let them re-organize under a bankruptcy judge - without the union!!
that is the only option - no more bailouts!!!
I don’t know how all the junk bulk mail pays it’s way. Everyday I get a bunch of junk mail that is a majority of the mail. I suggest they cut Sat. delivery and raise prices on bulk mail.
Hey, what do you think the other two clerks are doing while the one clerk is handling all the customers? They're surfing the web and responding to posts complaining that postal workers have nothing better to do than surf the web!
It certainly does seem that some of the 547,000 postal workers are employed to surf the net to rebut any commentary that is negative towards the post office.
Clerks ought to be be all business and all available whenever a queue begins to form. No gabbing about the weather while patrons wait. It should be what do you want to mail and do you need any stamps, thank you good bye next.
No apologist here, they need to clean up their pension and benefits, but there’s no denying the USPS is specifically authorized by the Constitution.
The arbitrators over the years have burdened USPS with a wide variety of restrictions on dealing with personnel, so they can't just lay off large numbers of surplus workers.
Then, there are the 30,000 or so excess small post offices ~ Congress said USPS couldn't close a post office just because it wasn't making a profit.
Well, NONE of the 30,000 small post offices ever made a profit. But none of them can be closed except by going through excessively difficult regulations established by the Postal Rate Commission.
More recently USPS went to the Rate Commission with a request for a rate increase. It was denied.
Here's a solution for you ~ give the unions the right to strike; eliminate legislative protection for small post offices (or unprofitable post offices); exterminate the Postal Rate Commission.
I think USPS would be able to deal with that environment.
As far as unionization is concerned, it was necessary to include "recognition" in the legislation because the federal government doesn't negotiate with unions about anything ~ never did ~ never will ~ but the Postal Service is the exception.
They even name the unions in the legislation, so it's not like anyone is free to chose other representation.
UPS actually has employees on the rolls whose job is to seek out postal situations and add their criticism. They even go to rate commission hearings and testify against USPS requests for rate increases that result in prices lower than UPS.
Step 1 - go to 2 day a week mail service, cut the number of employees by 2/3.
Step 2 - set up local delivery points; free post office boxes there; folks can pay a monthly charge for home delivery.
Step 3 - cut to government standard benefits (still more generous than most of the folks here get, but much more miserly than the post office).
Step 4 - cut to competitive pay and benefits.
Binding arbitration created that situation.
If USPS can't get high enough rates to pay the cost of handling any particular class of mail Congress will have to pass legislation that allows USPS to IGNORE the Postal Rate Commission (which has of late denied any rate increases or changes).
If USPS can't come up with the money to pay 75 years in advance for future retiree health insurance premiums, Congress, which imposed that remarkable rule, will have to pass legislation that brings USPS back into line with the rest of the government and with the private sector.
Congress could also help out by passing beneficial legislation to require USPS to pay retirement deposits at the same rate as the other government agencies (rather than at a higher rate).
Congress is the problem. Congress will have to act.
Eliminate the Postal Rate Commission. Eliminate binding arbitration.
All of those things will require Congressional action.
Congress IS the bad management. They only thing they can step in and do is their own cr*p.
That’s essentially what I was arguing. Force them to become competitive. If they are so confident that they can be successful, privatize them and allow them to go public.
But do you really think that’s what the government has in mind for them?
All they want is to infuse some stimulus to the tune of 50 or a 100 billion dollars or whatever magic number they can convince people is “the fix.”
Do you really thing the USPS is so fragile that it absolutely MUST be rescued? I think that is hogwash. They have cash flow. They have assets.
The idea that it is "either/or" is ridiculous. They have options like every other business. They are too stupid or lazy to examine them because they can talk Congress into "mo money".
USPS is not allowed to make a profit.
End of story in that regard.
Frankly what's happened is the senior members of Issa's committee who knew anything at all about USPS all retired. Now he's got no one there who knows anything.
I'd be happy to help him out but only on a contract basis ~ and that starts at ONE HALF MIL per year and goes up if I get threatened physically.
There are organizations who do business with USPS who are quite intimidating and dangerous. When I retired I gave up messing with that crowd, but they're still there.
BTW, I want to find out what you think are saleable postal assets first, then we'll talk.
Vehicles. Real Estate. Mail processing equipment by the mile. Fork lifts. Data.
They'd all make great collateral.
And real estate? How much real estate do you think they own? $1 billion, $2 billon, $3 billion? It's a lot less than you imagine. They don't have a land bank for future expansion.
Used forklifts ~ all battery powered. You have to build a battery room with a blowout wall to use the forklifts USPS uses.
Mail processing equipment ~ while you're selling off postal assets what do they use to sort mail?
And finally, "data" ~ like what other people are mailing?
To start with most postal real estate is RENTED. USPS has leases up the ying yang. I suppose you could sell some of them in the Great Obama Recession (/s). BTW, the large HCR vehicles ~ tractor trailer combos ~ those are all private property. Then there are the national landmark buildings ~ they are not for sale.
Keep your postal service going. Fire the income recipients of public schools and planning and building regulators.
The Dept of Commerce uses FedEx exclusively, even for letters.
Departments are allowed to subcontract and the PO lost out because they were so expensive.
The public unions will take the PO to its grave, can't be stopped.
If the PO couldn't eliminate Saturday delivery, that has been proposed for over 20 years, they are obviously unable to save themselves.