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Editorial: U.S. 'Fail Mail' Needs Reform
IBD Editorials ^ | September 20, 2011 | Staff

Posted on 09/20/2011 4:22:11 PM PDT by Kaslin

Postal Politics: If the U.S. Postal Service were a regular business, it would be filing for bankruptcy protection about now. So why not let it do just that? You'll have to ask the unions for an answer to that one.

Article I of the Constitution says Congress shall have the power to "establish post offices and post roads." There's nothing here about a jobs program, but that's roughly what the modern-day postal service has become.

Yes, it still carries out an essential task, as it did in the Founders' era. But it could do that work with about two-thirds of its current workforce. That's the opinion of the Postal Service management, which is trying to run USPS like a business and not put new burdens on the taxpayers. The USPS unions, enjoying no-layoff contracts and rich benefits,think otherwise.

This long-running conflict may soon come to a head.

The USPS is, by the usual business standards, broke. It continues to lose money on shrinking mail volume — down at least 20% since 2007 — and knows it cannot keep raising rates to raise revenue. When the price of stamps goes up, people just use the mail less.

Now it says it cannot make a $5.5 billion retiree health payment due at the end of this month. In other words, it's on the verge of default.

A typical company in this situation would file for protection under bankruptcy law. In return for being forced to operate under a judge's supervision, it would be able to hold creditors at bay and renegotiate contracts — including those with unions. This process worked for General Motors. Why not USPS?

(Excerpt) Read more at investors.com ...


TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Editorial; Government
KEYWORDS: antipostalcrybaby; postal; usps

1 posted on 09/20/2011 4:22:14 PM PDT by Kaslin
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To: Kaslin
"""it's on the verge of default."""

Not until I use all my FOREVER STAMPS.

2 posted on 09/20/2011 4:30:20 PM PDT by annieokie
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To: Kaslin

Either way, taxpayers are stuck with the huge pensions.


3 posted on 09/20/2011 4:34:52 PM PDT by Ingtar (Together we go broke (from a Pookie18 post))
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To: Kaslin
The folks at IBD just want to sound clueless ~ usually ~ but in this case I think they really are clueless.

First off FEDERAL LAW prohibits the USPS from making a profit. It is required to do no more than break-even. Anyone who doesn't understand that probably shouldn't comment on USPS.

Secondly, the thing grinding down USPS at the moment is called a $5.2 billion fee they are required by FEDERAL LAW to pay to Congress every year just for the possibility some future retiree 75 years from now might need medical insurance.

As bizarre as that sounds the FEDERAL GOVERNMENT doesn't want to give up the money. So far I think they've paid $20 billion on that account.

If they hadn't, they'd not owe $15 billion in debt, and have $5 billion in cash for operating their business.

IBD must certainly understand what's going on here ~ if the FEDERAL GOVERNMENT didn't force the USPS to operate without a profit, and if the FEDERAL GOVERNMENT didn't demand special payments for ridiculous projects, they would be doing well despite the Great Obama Recession.

As far as laying off employees goes, they've already cut 150,000 positions, and are seeking approval to get rid of another 250,000.

IBD should write their Congresscritters if they want that to happen. Kvetching about it in an editorial is so cowardly ~ just complain to the people who are preventing action.

Frankly, IBD is usually so pro Democrat, so pro Socialist, so pro Union, I can't take them seriously when it comes to USPS personnel matters. They're just stirring the pot ~ nothing more than that, and Fur Shur they'll be an intervenor in the very next Postal Rate Commission rate case trying to protect their considerable subsidy for their trashy periodicals.

4 posted on 09/20/2011 4:37:11 PM PDT by muawiyah
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Comment #5 Removed by Moderator

To: Kaslin

Once per week mail delivery for residential would be sufficient.


6 posted on 09/20/2011 4:39:39 PM PDT by Repeal The 17th (Proud to be a small monthly donor.)
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To: muawiyah

“The agency said it will be forced to default on some of its financial obligations this year unless Congress changes a 2006 law requiring it to pay between $5.4 and $5.8 billion into its prepaid retiree health benefits each year.”

FedEx, for comparison since they offer a pretty good plan, pays $2800 into its pension plan per employee. The USPS must pay $8600 per employee per year for its plan. How many times have we bailed out FedEx over pension costs?


7 posted on 09/20/2011 5:04:22 PM PDT by Ingtar (Together we go broke (from a Pookie18 post))
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To: Ingtar
We are not talking about current accounts ~ this is for FUTURE RETIREES some 75 years in the future.

What are you talking about?

8 posted on 09/20/2011 5:12:47 PM PDT by muawiyah
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To: Ingtar
What taxpayers? Postal employees pay into the federal retirement system in amounts determined by law and by actuarial evaluation of what it is going to take. Your average USPS employee hardly gets a HUGE PENSION. The USPS also pays into the federal retirement system. The source of funding for USPS employees and the agency is called POSTAGE.

Taxpayers are stuck with nothing.

9 posted on 09/20/2011 5:15:48 PM PDT by muawiyah
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To: Ingtar
BTW, the difference between FUTURE RETIREE HEALTH BENEFITS is a different topic entirely than RETIREE PENSIONS.

How you can say both things in one paragraph and then confound them is beyond me.

10 posted on 09/20/2011 5:17:29 PM PDT by muawiyah
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To: Ingtar

Fed Ex employees after retirement will be able to also collect Social Security. Postal retirees hired before 1984 are covered under the Civil Service Retirement System and for many of them, their pension is all they have and it is relatively modest AND TAXABLE, and if they ever become eligible For Social Security by working their forty quarters, they are hit with the pension offset against double dipping which reduces their SS to about forty percent. It is shocking to me how the public is jumping all over the postal workers who processed and delivered their mail for many years.


11 posted on 09/20/2011 9:58:21 PM PDT by Ciexyz
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To: muawiyah

In my area, the Post Office is talking about closing mail processing centers in the counties outside Pittsburgh, so that the big city will be served first, and those people will keep their jobs, but the more rural counties where there are not a lot of jobs anyway, will suffer. Too bad for Greensburg area where incidentally a lot of conservatives reside, the postal workers there with seniority will be offered the possibility of a long commute to Pittsburgh, some will be forced into retirement or off the rolls with nothing, and the local communities will see a drop in residents spending money for their services as ex-postal employees start to live like refugees. Do not rejoice in such a large group of workers losing their jobs.


12 posted on 09/20/2011 10:09:22 PM PDT by Ciexyz
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To: muawiyah
First off FEDERAL LAW prohibits the USPS from making a profit. It is required to do no more than break-even.

Intersting. thanks for updating us

13 posted on 09/21/2011 2:23:26 AM PDT by Cronos (www.forfiter.com)
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To: muawiyah

“Frankly, IBD is usually so pro Democrat, so pro Socialist, so pro Union”

Huh?


14 posted on 09/21/2011 2:59:34 AM PDT by DB
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To: muawiyah

“Pro-union?” Are you sure you’re picking up the correct IBD at the newsstand?


15 posted on 09/21/2011 5:15:59 AM PDT by dinodino
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To: muawiyah

Nothing, that is, except for the small matter of the bailouts they constantly ask for. You’ve already pointed out that the USPS is mandated to maintain revenue-neutrality; what do you think they should do if in fact they lose $10B this year, as projected? Are you in favor of yet more bailouts, or are you going to agree that their business model is broken and needs to be retooled?

Are you a postal worker?


16 posted on 09/21/2011 5:20:03 AM PDT by dinodino
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To: dinodino

What bailouts? It’s uncle sam who is asking for a bailout from USPS.


17 posted on 09/21/2011 7:54:40 AM PDT by muawiyah
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Comment #18 Removed by Moderator

To: dinodino
You appear to be woefully deficient in the dispute. USPS is forced, by law, to hand over just over $5 billion each year to the US government for some ill defined purpose in the distant future.

This was started just a few years ago ~ it wasn't one of the founding principles.

At the same time the Postal Rate Commission will not allow USPS to raise prices sufficient to pay the $5 billion. Simultaneously Congress has passed laws to prohibit the USPS from cutting costs to come up with the $5 billion.

Taxpayers are not paying one thin dime. On the other hand the folks who pay postage are subsidizing the US government to the tune of $5 billion per year ~ and the same government is forcing the postal service into insolvency.

YOU PEOPLE ARE INCOMPETENT!

19 posted on 09/21/2011 1:08:22 PM PDT by muawiyah
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To: muawiyah

Actually, it’s the USPS which is incompetent. Are you suggesting that they should not have to fund their future pension obligations?

If the postal workers’ union didn’t exist, maybe it would be a different story. Unfortunately for the USPS, their model doesn’t work as it stands, having to pay union pensions.


20 posted on 09/21/2011 3:12:34 PM PDT by dinodino
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To: muawiyah

Well, seems that you are a bit of an IDIOT:

http://heritageaction.com/2011/05/hidden-in-obama%E2%80%99s-2012-budget-usps-bailout/

What did the USPS do with the money that was freed up last year? Why are they still bleeding after getting what they asked for a year ago?


21 posted on 09/21/2011 3:16:40 PM PDT by dinodino
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To: dinodino
Did you see the date of the article ~ May ~ lot of water under the bridge since that time.

The OPM has also been OVERCHARGING USPS and its employees for their federal retirement program ~ for years!

The overcharge is now up to $78 billion.

The $5 billion has nothing to do with pensions ~ that's the Medical Insurance Payment for FUTURE RETIREES, not for people already retired, or even people who will be retired in the next few years, but people who may retire from USPS many years from now!

What did you imagine it was about?

BTW, you should also beware of almost anything written for Heritage when it comes to USPS. A former postal headquarters employee works there who used to provide a piece of information every month about whether or not mail volumes would go up or down the next month. He predicted mail volume.

I was able to prove he'd never been right even one time over the many years he'd made that prediction. He had the amounts wrong, and whether it was going up or down.

Total Fail!

He kind of edits this nonsense that Heritage publishes. In this case, it's another Epic Fail.

22 posted on 09/21/2011 5:41:53 PM PDT by muawiyah
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To: dinodino

BTW, as far as any money being freed up last year, that didn’t happen. Remember, you read it in Heritage. They’re up to their eyeballs in fiction.


23 posted on 09/21/2011 5:43:03 PM PDT by muawiyah
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To: dinodino
You really do need to learn that the term "pension" and the term "medical insurance" refer to different items. Makes all the difference in the world when discussing the financial problems at USPS.

At the moment you are so wrong it isn't really worth trying to set you straight.

24 posted on 09/21/2011 5:46:02 PM PDT by muawiyah
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To: muawiyah

Hope you don’t lose your cushy Post Office job in the inevitable upcoming bloodlettings.


25 posted on 09/21/2011 6:41:03 PM PDT by dinodino
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To: dinodino
Way back about 1977 I developed a plan of action for Bill Bolger that would have, if followed, eliminated 28,000 small post offices and stations nationwide.

That wouldn't have prevented the current fiscal problem (which is a relative thing, not absolute) but USPS would be smaller!

26 posted on 09/21/2011 7:13:30 PM PDT by muawiyah
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To: muawiyah

“The source of funding for USPS employees and the agency is called POSTAGE. Taxpayers are stuck with nothing.”

Who do you think funds the USPS deficit?


27 posted on 09/28/2011 3:22:34 PM PDT by cowtowney
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To: cowtowney
The USPS borrows to fund the deficit.

Where did you imagine they got the funds?

28 posted on 09/28/2011 3:39:17 PM PDT by muawiyah
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To: muawiyah

“The USPS borrows to fund the deficit.”

and who do they borrow from?


29 posted on 09/28/2011 3:44:18 PM PDT by cowtowney
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To: muawiyah

“Taxpayers are stuck with nothing.”

while you are looking for what bank funds the USPS deficit, I’ll help you out. The Bank of the US Taxpayer funds the deficits of the USPS.

It’s the Federal Financing Bank, which is a part of the US Treasury.

http://www.treasury.gov/ffb/press_releases/2011/08-2011.shtml

So, the US Taxpayer is stuck funding the USPS deficits.


30 posted on 09/28/2011 4:10:40 PM PDT by cowtowney
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