The Obama administration will include a financial blueprint for the nearly bankrupt U.S. Postal Service (USPS) in a deficit-reduction package that will be submitted to Congress, an administration official told lawmakers Tuesday.
With the Postal Service speeding toward default, John Berry, the director of the Office of Personnel Management, also said the administration would like to delay the deadline USPS faces for a massive benefits payment by 90 days.
Berry said the extra time would allow the White House, Congress and Postal Service to find a path forward for the agency.
“Both the president and I know of the critical importance to our nation’s economy that the Postal Service provides,” Berry said at a hearing of the Senate Homeland Security and Government Affairs Committee.
Postmaster General Patrick Donahoe said at the same hearing that pushing the $5.5 billion payment for future retiree healthcare costs back to the end of the year would give USPS some financial breathing room.
But he also reiterated that the service would default on the payment regardless of the deadline — and that, with technological advancements continuing to eat into its bottom line, USPS needed to radically restructure its business model, with some help from Congress.
If changes are not made, Donahoe told reporters, “we think that around the August, September time frame next year we would be out of cash.”
The Postal Service is fast approaching its borrowing limit of $15 billion, leaving officials concerned about a first-ever USPS default. Donahoe told the Senate panel that the Postal Service’s net loss for this fiscal year could run as high as $10 billion, and projects to around $9 billion for next year.
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6 Responses
How about charging the same rate for junk mail as for first class?
My mail box would be almost empty and if multiplied byu the millions of recpients, this could save alot of work and increase revenue. (NO, tea parrty, this is NOT a tax hike)>
It’s no wonder USPS is falling apart.
It may be that #1 on their application is “Do you speak, read or write English?” If your answer is YES, then your application is not considered!!!
Yes, i also agree about junk mail and multiple mailings from charities at taxpayers expense, which is pure genaiva,stealing should be charged.
Allow competition with the USPS. If that would happen, FedEx or UPS would deliver mail at half the price and twice the speed and the USPS would either have to shape up or disappear. No Federal bailouts necessary!
FedEx works with the post offfice. At present the USPS is the only one willing to deliver something to any place no matter how remote. But that service doesn’t require the masive post office system. It is unlikely that anyone could deliver regular mail profitably at current volume levels.
If we allowed first class postage rates to rise to (at least) the level of Priority mail, UPS and FedEx could profitably take over almost all mail. That means junk mail and the handful of first class stuff would have to go online since they couldn’t afford $5/letter (what is the impact for communities that lack universal internet coverage, such as our own – would we need to set up our own postal service?).
#1 Moose613
The problem with this idea, even though I like it, is that now you have to critique every organization and mailing and determine if it’s “junk mail” or not. One person’s junk mail is another person’s desired tzedakah fund.
#2 Ms. Critique
What genaiva? It doesn’t cost taxpayers anything when an organization gets a discount for bulk mail. They just pay less than 1st class rate, but they still pay!
#3 csr1
USPS has competition from UPS and FedEx (among others) for package delivery. Is FedEx “half the price” as USPS?
What would really happen here is that a competing company would charge based on delivery location, in order to maintain a healthy bottom line. I’m not saying that this is a bad thing, but universal mail delivery as we understand it would disappear.
its very simple why they are going broke they dont let you ship anything, did you ever see the list of hazardous thing they dont allow? well perfume is one of them! its time for the federal gov. to get out of the shipping business