US Postal Service could literally shut down

Facing $8 billion or more in losses, Postal Service goes to Congress to discuss options

Randolph E. Schmid
Associated Press
September 6, 2011

WASHINGTON - Postmaster General Patrick Donahoe warned that the Postal Service is on "the brink of default" as he battles to keep his agency solvent. Without legislation by Sept. 30, the agency "will default on a mandated $5.5 billion payment to the Treasury," Donahoe told the Senate Homeland Security and Governmental Affairs Committee on Tuesday.

And with no congressional action, a year from now, next August or September, the post office could run out of money to pay salaries and contractors, hampering its ability to operate, Donahoe said.

"We do not want taxpayer money," Donahoe said, "We have got to get our finances in order."

Committee Chairman Joe Lieberman, I-Conn., said: "We must act quickly. The U.S. Postal Service is not an 18th century relic, it is a 21st century national asset, but times are changing rapidly now and so, too, must the post office."

Sen. Susan Collins, R-Maine, noted that the post office supports a $1.1 trillion mailing industry employing more than 8 million people in direct mail, periodicals, catalogs, financial services and other businesses.

Sen. Tom Carper, D-Del., noted several proposals have been put forward to improve postal operations and said that Congress needs to work on areas where agreement can be found. Both Carper and Collins have introduced bills to reform postal operations, and measures have also been introduced in the House.

Donahoe and his predecessor John Potter have warned for months that without changes in the law governing postal operations the Postal Service will be unable to make advance payments to cover future retiree medical benefits.

Staggered by the economic downturn and the massive shift from first-class mail to email, the post office lost more than $8 billion last year and is facing losses at least that large this year, despite having cut 110,000 jobs over the last four years and making other changes, including closing smaller, local post offices.

The Postal Service, which does not receive tax money for its operations, is not seeking federal funds.

Instead, postal officials want changes in the way they operate, including relief from the requirement that it prefund medical costs. No other federal agency has to prefund retiree health benefits, but because of the way the federal budget is organized the money counts as income to the government, so eliminating it would make the federal deficit appear larger.

When Congress restructured postal operations in 2006 it ordered the agency to establish a separate fund to begin covering those benefits, instead of using money for the post office's general fund, starting in 2017, and to make annual advance payments to that account. The payment due Sept. 30 would be $5.5 billion.

Also, the post office wants to reduce mail delivery to five days-a-week; close 3,700 offices, further cut the workforce by up to 220,000; and to withdraw from federal retirement systems and set up its own. It also seeks the return of $6.9 billion it overpaid into retirement funds.

Contracts with its employee unions currently strictly limit layoffs and closing post offices riles local communities who complain to their members of Congress.

The ONLY thing hold the USPS back is congress. Let it operate like the business that it is. Otherwise, it'll go belly up. If it weren't tied to the gov't, it would've went out of business years ago.

It's already belly up, I'd say. Privatizing it but ensuring that certain services are still kept in place is the only solution..

BubbleBliss wrote:
It's already belly up, I'd say. Privatizing it but ensuring that certain services are still kept in place is the only solution..

It is privatized. It uses no tax payer dollars, hence being "private." It's being hamstrung by congress. They can't raise the price of a stamp without congressional approval.

Here's a post office near me;

Everyone in town receives their mail at the post office. The town has only one rural route that consists of more than 480 stops and 105 miles of driving each day. The lease is $900 a month. I guarantee you that the USPS loses money monthly on this one.

Well that's what I meant, moving it away from Congress.

BubbleBliss wrote:
Well that's what I meant, moving it away from Congress.

Right. Ands also rolling back some of the huge union crap.

Just read more facts just on this post office that I pictured above.

It cost $76,300 in 2010 to run that place (overhead, wages, etc).
It only made $23,022 for income for 2010.

How insane is this???????????

Any questions?