Posted on 01/15/2013 6:30:51 PM PST by Steelfish
US Postal Service Faces Ruin Without Rescue From Congress, Watchdog Warns Inspector general David Williams says cash-strapped service, saddled with debt and low revenues, is in 'very serious trouble'
Heidi Moore 15 January 2013
The USPS lost over $16bn last year, and has lost about $41bn over the past five years, according to estimates. Photograph: Shannon Stapleton/Reuters
The chief postal watchdog has warned that the troubled US Postal Service will go out of business this year unless Congress acts to rescue it.
David Williams, the inspector general of the USPS, says the service is in "very serious trouble", after five years lumbered with heavy debt and falling revenues.
In an interview with the Guardian, Williams warns that Congress, which has been distracted by November's elections and the fiscal cliff crisis, must act this year to save the service.
The USPS lost over $16bn last year, and has lost about $41bn over the past five years, according to Robert Taub, a vice-chairman of the Postal Regulatory Commission.
Since 2006, the postal service has been required – unlike any federal agency – to pre-fund its retirement and healthcare benefits to workers. This costs it about $5.5bn a year. Currently, the post office has paid in $330bn for benefits, but the Office of Personnel Management recently told Williams that it will need $394bn to satisfy the legal requirement.
At the same time, it has been unable to raise postal rates enough, because they are pegged to inflation, and inflation is low. (A long-awaited rise is coming on January 27, moving postal rates up by 2.75%).
The economic downturn in 2007 hit the postal service hard, as people sent less mail; it has also seen a steep decline in its most profitable product, first-class mail.
(Excerpt) Read more at guardian.co.uk ...
Another taxpayer-funded black hole. Time to put the postal service out of its misery. Or turn it over to a private company.
..after years of bloated government buck passing and waste, efficient competition in the private sector wins every time.
I still have a mail person who can’t, or will not read, maybe just lazy,....... I get the wrong mail mixed in with mine.
Remember when the USPS was supposed to be “privatized” because it could support itself? I think the postmaster was Marvin Runyon then ....
Well, all of you anti USPS folks really don’t understand the issue and that is too bad. I still believe the USPS is the best bang for the buck anywhere, especially since congress has tied their hands and will not let them run as a commercial enterprise. You will get your way I suspect, but you will regret it.
Who sends mail anymore?
About the only thing that needs delivering are packages. I know some people send letters, but it’s definitely a fraction of a fraction of what used to be sent.
A high school friend of mine is a postal worker. He is a huge liberal and is always railing that the rich should pay their fair share. While the guy has his points, I secretly wish the USPS will go under if only to see him get his a huge dose of reality.
Like UPS or FedEx?
Like UPS or FedEx?
The USPS is an anachronism and union make-work organization. Cut off their Federal loans, revoke their monopoly on First Class mail, and let the market decide whether they live or die.
Same here. USPS have failed me many times. Fedex are superb. How is it that even after billions of dollars, the USPS can’t figure out how to track a package?
“...the post office has paid in $330bn for benefits, but the Office of Personnel Management recently told Williams that it will need $394bn to satisfy the legal requirement. “
The Postal Employees Retirement funds are sitting in that slightly smaller lock box, right next to that Social Security lock box that ensures every American’s comfortable old age happily ever-after.
“Another taxpayer-funded black hole.”
They haven’t been taxpayer funded since the Post Office became the Postal Service about 40 years ago. Maybe your copy got lost in the mail.
If they fire my incredibly stupid carrier, I’ll send them a $20!
“He is a huge liberal and is always railing that the rich should pay their fair share.”
After procrastinating for years, when the 2012 election results came in I signed up for online bill payment to do my share to shut these gubmint workers down (many supported Obama, spreading stories about the closures of many post offices if Republicans won). There are still one or two sporadic payments that require a stamp, and I’m using up a stamp collection from the 1980s on them (saving the “forever” rate stamps for when letters cost $10 - the stamps have slumped further than coins, and I’d only been offered less than face value for them anyway).
“They haven’t been taxpayer funded since the Post Office became the Postal Service about 40 years ago.”
HAven’t they been bailed out recently, and won’t they need it again? Who is paying for that?
They can borrow money from the Treasury. But it’s a loan, not a subsidy. USPS became self funding several years after they replaced the Post Office.
Like the article says the big problem they face is a government imposed requirement that they fully fund future retirement health care. No other government agency does this, no private firm does this. It is a huge financial burden that was imposed on the USPS during Dubya’s administration.
I don’t know what the purpose was for doing this, but the USPS had been running in the black until they were mandated to pay these retirement costs up front.
USPS tracking doesn’t work. You cannot see where your package disappears when the USPS steal it. I had a priority package disappear, and the USPS could not tell me anything about its whereabouts. Fedex only for me now.
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