WASHINGTON —The Republican-controlled House opened the envelope of postal finances on Wednesday and what it pulled out wasn't pretty.
Unless things change, the post office will run out of money by the end of the fiscal year in October, Postmaster General Patrick R. Donahoe told the House Oversight subcommittee on the postal service.
Donahoe said that as of Sept. 30 his agency will owe the federal government a payment of $5.5 billion to fund medical costs, in advance, for future retirees, and in November it will need to make a $1.3 billion payment for worker's compensation.
"The Postal Service will not have the cash available to make both of these payments. We need legislation this year to address that fact," he said.
If it does come down to crunch time, said Donahoe: "We will deliver the mail." Employees will be paid, as will suppliers, he said. "The thing we will not do is pay the federal government."
Without some important changes to the law the post office "cannot survive as a self-financing entity," Donahoe said.
While the post office has been battered by the recession and the movement of mail to the Internet, it has also cut costs sharply by reducing its workforce by 240,000 people in recent years. Last year it cut costs by $3 billion and expects to reduce spending by another $2 billion this year, Donahoe said.
More Here..
Unless things change, the post office will run out of money by the end of the fiscal year in October, Postmaster General Patrick R. Donahoe told the House Oversight subcommittee on the postal service.
Donahoe said that as of Sept. 30 his agency will owe the federal government a payment of $5.5 billion to fund medical costs, in advance, for future retirees, and in November it will need to make a $1.3 billion payment for worker's compensation.
"The Postal Service will not have the cash available to make both of these payments. We need legislation this year to address that fact," he said.
If it does come down to crunch time, said Donahoe: "We will deliver the mail." Employees will be paid, as will suppliers, he said. "The thing we will not do is pay the federal government."
Without some important changes to the law the post office "cannot survive as a self-financing entity," Donahoe said.
While the post office has been battered by the recession and the movement of mail to the Internet, it has also cut costs sharply by reducing its workforce by 240,000 people in recent years. Last year it cut costs by $3 billion and expects to reduce spending by another $2 billion this year, Donahoe said.
More Here..
I understand that postal workers are under no threat of layoff; wonder who "negotiated" that contract with the union?!?
ReplyDeleteOctober is optimistic. Wait until Oil is $150 a barrel.
ReplyDeleteThe United States Postal Service is facing a $238 billion budget deficit over the next decade and may drop Saturday mail delivery to help cut costs:
ReplyDeleteThe U.S. Postal Service estimated Tuesday that it will lose $238 billion in the next decade if lawmakers, postal regulators and unions don’t give the mail agency more flexibility in setting delivery schedules, price increases and labor costs.
http://www.unitedliberty.org/articles/5159-united-states-postal-service-faces-238-billion-budget-deficit
Yeah, sure there could be more layoffs(already a couple hundred thousand eh?) or benefits cut backs, but what about CEO and manager salaries? How come no one ever talks about them? What about more fuel efficient vehicles? I guess we are all brain-washed to think the worker is always to blame.
ReplyDeleteAre you free or are you really a worker-slave? Think about it.
ReplyDeleteWhere did the idea come from ,that the Post office, that provides a service to all Americans , but a bigger service to American Business ,must make a profit?
ReplyDeleteExpect it to be Privatized soon ?
The USPS is the only entity able to deliver 1st class mail, thus making it a monopoly. Thanks to congress, UPS and FedEx are constantly tied to price increases because they are not allowed to under cut shipping prices nor deliver 1st class.
ReplyDeleteEvery time the post office hikes its rates, look around so does UPS and FedEx! The post office should of been privatized decades ago!!!
6:05 AM: This is the first time I've seen the post office blamed for what UPS and FedEx charges. Perhaps you'd like to explain how Congress has anything to do with how these companies set their prices? Or is this more smoke blowing out of your Republican ass?
ReplyDeleteIf there was no post office, it would cost you $5 to mail one letter, which is what the private companies charge. Maybe you'd like to tell us peasants how paying $5 for one mailed letter is an improvement over what we have now?
sharsonsj: Here is the info you requested! Why don't you do a little research before you comment?
ReplyDeleteHenry Wells (later of Wells-Fargo fame) entered the market, charged 6› a letter, and delivered faster.[5] In the Boston area alone, over a hundred private express companies carried the mail. Private companies delivered letters directly to addressees' homes, while the government still required people to pick up their mail at the nearest post office.
As private business flourished, government postal revenues declined. The postmaster general admitted in 1843 that many people thought the government's monopoly was "odious," but insisted that it had to be preserved for the good of the country.[6] In 1845, Congress tightened the laws prohibiting competition and increased the penalties for violators. In 1851, Congress lowered postal rates and began providing a direct subsidy for postal operations.
Even though the Post Office received high subsidies from the Treasury to provide mail service to outlying regions, service was still slow, doubtful, and limited. As Carl Scheele noted in his Short History of the Mail Service:
sharonsj: One more thing in case you can't read!
ReplyDeleteNote, In 1845, CONGRESS tightened the laws prohibiting competition and INCREASED the penalties for violators!
You people are crazy. There is no private entity that will let you mail something from NYC to San Diego for whatever the postage is right now. Nobody would do it.
ReplyDeleteMost people use private carriers for shipping. So they aren't even affected by USPS. The only thing privatizing would do is make paying your bills by mail too cost prohibitive. Whenever possible, people would switch to e-bills.
The companies that send out mail would either stop or start raising their prices more to compensate. Nobody can compete with the postal service in terms of price and speed for letters.
913 is crazy, no one can lose letters better than the post office, they are incompentent and will soon be out of business.
ReplyDeleteYes and not just the PO should be privatized .
ReplyDeleteBut that privatization should pave the way for another 1/4 million people to be laid off.
This will be a great service to American profitability as a whole ,as many of these postal delivery people often only get job incomes that they spend in the local community in small towns.
Everybody knows that an incompetant government cannot compete with business in efficiency and service.
Thats why the military is being privatized too with contactors on cost plus contracts for the mercenaries.
You only have it half right, my brainwashed citizen. And you speak as if you warmly embrace private armies. You are, in general, among the forces contributing to this world economic downfall. Take away investment made locally to make america more profitable? You are like a sad joke told just before the Titanic sinks.
ReplyDelete