Postal Service Is Nearing Default as Losses Mount
By STEVEN GREENHOUSE
NYT
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.
(More here.)
NYT
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.
(More here.)
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1 Comments:
Back in July, I wrote on MNPoliticalRoundtable about the Post Office's problem ... it essentially asks why is Congress waiting to act.
No doubt the mail volume is less, but did you know that the PO has cut employment ( as it has shed 131,313 jobs in the past five years) yet, the cuts have not been across the board ... In 2005, there were 2,654 employees at Headquarters … that rose to 2,937 in FY2010 … an increase of 283 managers. For comparison, consider the staffing levels for Clerks … in FY2005 there were 221,644 and by FY2009, there were 157,168 … a reduction of 64,476 workers.
It’s instead the funding for pensions … or more precisely, the overfunding of future pension costs which is the crux of the problem .... caused by Congress in 2006 when it passed the Postal Accountability and Enhancement Act mandating that the Postal Service prefund its retiree health benefits plans
USPS is required to contribute $5.5 billion annually to its retiree health benefits and has overpaid both the Civil Service Retirement System and Federal Employees Retirement System funds by $75 billion and $7 billion, respectively.
Congress should enact H.R.1351 – United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011. The legislation has 159 co-sponsors … including Minnesotans Tim Walz (D-MN-01), Keith Ellison (D-MN-05) and Collin Peterson (D-MN-07).
In another post on your site (the Krugman piece), it is mentioned that there were zero jobs created last month ... and House Republicans will complain ... all the while not acknowledging that when you cut government jobs that creates unemployment ... they should be patting themselves on their backs for accomplishing their goal.
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