Despite significant cost-cutting, the U.S. Postal Service has “an inflexible business model” that will make it unable to pay huge bills without legislative fixes, the postmaster general testified Wednesday.
The agency cut $3 billion in costs last year and will see about $2 billion in savings this year, but it still won’t have the revenue to meet its obligations, Patrick R. Donahoe told the House postal oversight committee.
Despite cutting 230,000 positions in recent years, without significant changes, he said, the Postal Service, which is not taxpayer funded, cannot survive as a self-financed entity.
Prefunded retiree medical benefits of $5.5 billion a year lead the list of ails facing the agency, he said. The $5.5 billion is due September 30. No other entity must bear “the incredible burden” of such an amount, he said.
The agency also must pay in October $1.2 billion for workers’ compensation, according to the postmaster general.
Current models show the Postal Service will be $2 billion to $3 billion short of the amount needed for the workers’ comp and the prefunded medical benefits payments, Donahoe said.
Donahoe reiterated the agency’s request to deliver mail five times a week, rather than the current six.
The agency also is earning less from first-class mail, suffering a $544 million revenue loss in comparable three-month periods over two years.
Join the official YWN WhatsApp status
6 Responses
How about charging first-class rate to all the purveyors of the mountain of junk mail I get every day? That should either increase revenue or decrease expenses by an enormous amount.
Just wondering if mail carriers get overtime pay.
In our neighborhood, the mail carriers change to the ethinicities who join our neighborhood legally!
Our latest can deliver mail as early as 11:00 A.M. to us and yet i can find him sitting in the hallway of the corner apartment building(where a family member lives) sometimes as late as 6:30 P.M. So we are talking of about another 20 families he has mail for after us and then the building of 60 tenants.
The mail carriers before him were a husband and wife team. To tell you the truth who knows if only was the carrier but they helped each other. Lunchtime was about 1:30 at the corner apartment building.
Or howabout the guy that picks up the mail from the corner boxes and will sit at a stop for a while (1-2 hours) taking care of his own business or just relaxing. The junk mail and the ones who don’t have to pay for the mail, yes, that is another story especially when you get 5-6 of the same mailings or mail for people who moved years ago!
We once had a mail carrier from the countries who read their script vertically and that is how he was trying to read our address!
I think that near-bankruptcy is part of the Postal Service’s business plan. Perhaps a spokesman for the US Postal Service should say, in commenting on the reports of its current near-bankruptcy: “Been there, done that.”
#3, Hello ole pal. Any account that can take an operation as huge as the United States Post Office and calculate and orchestrate such an enterprise to be “near bankruptcy” is a numbers man that does not need to work for the post office.
The Post Office is having a financial problem like the rest of America, without any underhanded calculating involved. There are many reasons for this. American institutions needing to lean on the government is nothing new in the Bush/Obama era.
America is going…..going……….go-
How can they ever break even since their primary product, First Class Mail, is totally obsolete. They’ve gone from twice a day deliveries seven days a week – and probably should ask why bother? Virtually everyone has a phone now (including people on welfare), and it is no big deal to make it possible for any phone to receive email. There really isn’t any need for the government to pay for mail delivery.
They could go back to the old system of bring mail to the post office, and you could pick it up there (as people with boxes do). Also the handful of groups who don’t use email (such as some frum Jews), could have the email delivered to the a central address and arrange for private delivery.
Here’s something I never expected to say: No. 5 got a fact right, when he writes that First Class mail is obsolete. (Actually, it’s nearly but not completely obsolete.)
No. 4: I was being facetious when I said that periodic near-bankruptcy is part of the USPS business plan. But for the last 40 years, the USPS has gone near-bust at fairly regular frequencies. And you are correct that part of their problem is the current economic muddle.
One popular solution – end junk mail – is mistaken, as junk mail provides a critical mass of business that enables the USPS to support First Class mail. I would love to see the end of junk mail – it would end in an hour if the “DO NOT CALL” registry were expanded to cover unsolicited commercial mail.
Perhaps it is time to recognize that the old dog that is the USPS should take its last trip to the vet and be put out of its misery.