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Another Greek Tragedy: The US Postal Service

The Postmaster General has historically been a “do-nothing” job; a post where Presidents could indulge in a bit of nepotism by appointing loyal supporters or friends without much outside scrutiny. The job is relatively cushy by Washington standards—don’t rock the boat, and you’ll be guaranteed a long and happy tenure, at least until the next administration comes in.

Unfortunately for Patrick Donahue, he may have bit off more than he could chew in today’s climate. With the agency teetering on the brink of total financial collapse, Donohue made a statement last week comparing his agency to the most infamous of economic basket cases—Greece. CNN Money reports:

The head of the U.S. Postal Service said Tuesday that if the service doesn’t cut costs and Congress fails to act, it’s going to be in the same dire straits as Greece…

He said that Greece’s ratio of debt compared to gross domestic product is 1.61 and the U.S. Postal Service’s ratio of debt compared to revenue is 1.51.

Donahoe clarified later that he was sincere in the comparison, except he didn’t think the U.S. Postal Service is on the verge of default or a bailout.

“But, it’s true,” said Donahoe, speaking with reporters at a postal policy forum called Postal Vision 2020. “Unfortunately, if we don’t do something we will look like that.”

The Postal Service’s problems are legion. Staffing costs are far too high, and the agency is unlikely to remain solvent without significant cutbacks and massive office closures. Meanwhile, the USPS has suffered a steady decline in both mail volume and revenue. Email has largely replaced paper mail as the primary means of long distance correspondence, as efficient and cheap private parcel delivery services such as UPS, FedEx, and DHL have largely cut them out of the market.

Yet while these problems are serious, they should not have been surprising. Technological change like this happens all the time. Western Union telegraphs and mail-order catalogs were replaced by the telephone and the internet. Nature leads its course, as the old makes way for the new—a system set up for the America of 1950 has little relevance to the needs of modern America.

The US Postal Service is an yet another outdated remnant of the 20th century blue social model that needs to go the way of the steamboat, but because the institution is so deeply ingrained within the Federal bureaucracy, no one wants to see the truth. Postal workers unions blame health care costs and politicians point to the current economic situation as the reason that the Postal Service is in trouble.

Donahue deserves some credit for pushing for more comprehensive changes to the system, but even his proposals are only temporary stopgaps. A reduction health to healthcare costs and cuts Saturday mail service cannot fix a poor business model, no matter how strong the economy.

The changes the post office needs are much more fundamental. Plans have been floated to expand the office’s function beyond its core of mail delivery, perhaps towards a more internet-based approach to communication, or possibly towards a general interface between people and the government. It’s hard to say whether any of these ideas will be successful, but the USPS will need radical thinking along these lines if it hopes to stay solvent much longer.

And one reform is essential if the service is to have any real chance of survival: the US Congress needs to stop micromanaging the Post Office. Crazy mandates by congressmen trying to curry favor with the folks back home or kiss the ring of powerful lobbies (unions and junk mail advertisers, for example) make an already difficult management job impossible. These habits grew up back in the era when the Post Office was the single most important source of political patronage in the federal government, and a dysfunctional relationship between congressional overseers and management is deeply rooted in the institutional culture.

Right now we have a truly toxic recipe for meltdown and failure: a bloated organization challenged by fundamental changes in its business model combined with an archaic and unworkable management system which empowers self-interested, self-promoting grand standers on Capitol Hill. Given the growth of entitlement spending and the explosion of national debt, post office subsidies will come under increasing scrutiny.

Change is on the way.


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  • Asher Abrams

    Walter, your post makes no mention of the Post Office’s pension system. Don’t you think this is a contributing factor?

  • Kenny

    One of the contributing factors to the problems of the USPS is that, since the late 1940s, it was intentionally designed to be inefficient.

    That was the belief of, I believe, Peter Drucker. The reason was the Post Office was to sop up a lot of the excess manpower made available at the war’s end.

    And the manpower the Post Office was expected to absorb was the marginal type — the ones who would have a hard time cutting it in the private sector were there was competition and relative high performance standards.

    That may have made sense then but not now, especially since the postal unions have allowed the post office to grow into unbelievable state of bloat.

  • Anthony

    Institutional culture (every congressional district contains post offices), challenged service model, and embedded costs are key factors burdening U.S Postal Service; question is do country (populace) have resolve via their representatives to force change in light of evidence.

  • vanderleun

    Change? On the way? Say it isn’t so! I don’t know what I’d do without my daily deliveries of supermarket flyers and coupons for hair care products.

    As for the Postal “Service” itself? I’m with Dickens:

    The Gorgon had surveyed the building again in the night, and had added the one stone face wanting; the stone face for which it had waited through about two hundred years.

    It was like a fine mask, suddenly startled, made angry, and petrified. Driven home into the heart of the stone figure attached to it, was a knife. Round its hilt was a frill of paper, on which was scrawled:

    “Drive him fast to his tomb. This, from Jacques.”

    –A Tale Of Two Cities – Charles Dickens

    It’s long past time we started killing government departments outright.

  • Andrew Allison

    “a bloated organization challenged by fundamental changes in its business model combined with an archaic and unworkable management system which empowers self-interested, self-promoting grand standers on Capitol Hill” says it all. The same, incidentally, can be said of DoD and many other government departments. I truly fear that only an economic catastrophe on the scale of that Greece will create the necessary impetus.

  • Jacksonian Libertarian

    What is needed is the feedback of competition. The Post Office’s monopoly on 1st class mail should be broken up like the AT&T phone monopoly. Dues to be in the Postal Workers Union should be voluntary, and Postal workers should have to contribute more to their pensions and healthcare, as well as give up control of work rules. UPS, FedEx, and DHL would all end up buying pieces of the broken up Post Office, and bureaucracy would be replaced by the efficiency of private enterprise.

  • John Cooper

    I have to disagree with “…mail-order catalogs were replaced by the telephone and the internet”. Ninety percent of what shows up in my P.O. box are junk catalogs. Thankfully, our post office has a big trash can for “unwanted mail”, ’cause that’s where all of it goes. What a waste.

  • Don51

    Constitution, Article I, Section. 8.
    “The Congress shall have Power..
    To establish Post Offices and post Roads;”

    It’s more like 18 Century.

    Let’s not forget that in our urban/suburban mentality, that there are still vast areas of the country that do not ‘internet’ or have deliveries by commercial carriers. So some construct envisioned by the non-Big Government/Socialist founders still needs to be addressed.

  • Sam L.

    Kenny wrote “That may have made sense then but not now, especially since the postal unions have allowed the post office to grow into unbelievable state of bloat.”

    Allowed? Forced, perhaps? Unions do what unions do, and the USPS and its union are similar to GM and UAW. Bad management, either directed or enabled or exacerbated by Congress, and a union that could not/would not see that ‘life as we know it’ is changing. A toxic combination.

  • BDR

    You mention the impact of technological change on Western Union. Thank god it is a private company that has had to change, reinvent itself or face extinction. Imagine if the telegraph had been taken over by the government. I envision a cabinet level Department of Telegraphy. To this day there would be lonely telegraphers in every town waiting, waiting for someone to please cross their threshold and send a telegram. Meanwhile they would continue to pull down a government salary while working (to use the term loosely) their way towards a comfortable, guaranteed pension.

    The loneliest job in the future may not be that of the Maytag repair man but that of a counter clerk at the USPS.

  • doc

    Constitution, Article I, Section. 8.
    “The Congress shall have Power..
    To establish Post Offices and post Roads;”

    …and therefore has the power NOT to establish, or to close. The responsibility is clear. Vanderleun has it exactly right: long past time to close whole cabinet departments.

  • Scott

    Unlike much of what the Federal Government does, the Post Office is specifically authorized by the Constitution. If we are getting rid of expensive and useless Federal agencies, could we perhaps begin with the Department of Homeland Security?

  • Despistado2

    I was recently in the local storefront (non-USPS) “postal services” shop where I have Fedex/UPS deliveries sent. One of the other customers was having copies made. It turns out she was a postal union organizer having copies made of a flyer for a meeting to organize a demonstration to save jobs at our local Post Office. Before she left she gave a copy of the flyer to everyone in the shop. It struck me as odd that she would think we would all follow her out of the shop that provided a variety of services (shipping, receiving, fax, copies, internet, etc.) with one or two employees to save jobs at the Post Office. We were precisely the people who have already given up on the Post Office.

  • Koblog

    Pssst…don’t tell anyone, but being multiple trillions in debt, the entire Federal Government is “financially insolvent.”

    Why do we have a Department of Education that doesn’t teach? A Department of Energy that produces no energy? A Commerce Department that only stops commerce?

    President Romney could do a great deal if he implemented a mirror image of President Obama’s policy of implementing only laws he likes.

    Romney could simply dissolve whole departments under the Executive Branch and save hundreds of billions.

  • elgringo

    Mr. Mead, there hasn’t been a presidentially appointed postmater general since the first Nixon administration.

    The current Postmaster General is Patrick Donahoe (no U).

  • PTL

    Government employee unions and their political
    flunkies, like their private industry unions,
    destroy their employers. Since govt. unions
    came into being through a presidential executive order and should be eliminated the
    same way. Profiles in courage anyone?

  • HC

    Posts like this undercut Mr. Meade’s usually deserved reputation for accuracy, because the ‘information’ in the posting is simply factually wrong, or at least much of it is.

    First of all, the Postal Service is a net _contributor_ to the budget. Eliminate it, and the deficit would actually worsen. The reason it looks as if it’s losing money is a bit of Congressional chicanery, familiar to observers of the Social Security ‘trust fund’, in which the PS is required to ‘pre-fund’ retirement at a rate far in excess of either typical public or private pension systems. If this drain was removed, the Postal Service would actually be very close to breaking even, it might even go slightly into the black, despite the actual decline of certain types of mail volume.

    Of course that money is gone, because Congress spent it, replacing it with IOUs in a familiar game. But there’s no issue of a ‘postal bailout’, what’s being called a bailout is simply a proposal to let the postal service keep what it makes. The trouble is that Congress wants the money to cover the size of the deficit.

    Nor have UPS, FedEx, etc, outcompeted the Postal Service. In actual fact, they _use_ the Postal Service as their R&D branch, and they also fairly routinely put some of their volume into the Postal Service for delivery in rural areas at a fee. If you send a package via UPS or FedEx to a rural area, there’s a substantial chance it will end up actually being delivered by the USPS, letting the private company skim a huge chunk of profit as pure gravy.

    Real life just is not as simple as ‘private good public bad’, and the red/blue dichotomy is in part a mirage, you can’t draw a hard and fast line between them because the ‘red’ and ‘blue’ models are two halves of one thing.

    And an economic catastrophe on the scale of Greece? Folks, that won’t get rid of government or scale it back, it would _empower_ it like nothing in our lifetimes! It would provide the excuse for government action on a scale that would warm the hearts of Obama’s most radical supporters, it’s the last thing we we need!

  • Everyman

    I’m with my friend Gerard – I often am – and would close almost anything in government that I could, particularly those agencies and departments with a long and distinguished history of doing nothing, and doing it well.

    That said, and having a monopoly by law on our mailboxes, why does the USPS not license others, and earn royalties, to use those boxes for its deliveries, the ones we want to have safely made and out of the weather?

    I wonder . . . .

  • Steve White

    Try this experiment:

    For an entire month, separate all mail that comes into your household into three piles:

    1) all correspondence from people you know — letters, cards, etc

    2) all financial transactions — bills, bank statements, etc.

    3) everything else, most especially ‘junk mail’

    At the end of the month, tell me the height of each pile.

    We already know the answer.

    The first and second groups of mail are rapidly being replaced by modern technology. We tweet, email, facebook, and blog. We might still get the occasional card or letter but that’s it. We increasingly do most of our business, be it personal or corporate, over the net. As but one example: I used to write 30 checks a month to pay bills, get cash, and so on (so says my Quicken). Now I write no more than two a month, and I’m looking for ways to reduce that.

    So in the near future we won’t need a Post Office to deliver personal and financial mail.

    We have UPS, FedEx etc to deliver packages (HC’s comments about rural delivery are duly noted; that is true for today but need not be true for the future).

    Without personal and financial mail, and without packages, what then will the Post Office do? Junk mail? At rates to corporations that are good for them and not to taxpayers?

    So a modest proposal: plan to eliminate the Post Office in exactly 20 years’ time. Spend the next decade figuring out how to wind it down and the decade after that making it happen.

    We’ll need to ensure that current older postal workers are taken care of, it’s not their fault any more than it was the fault of the buggy whip factory employees. Young postal workers could get a lump sum payout on their pension earned to date and some bridge funds on health care until they’re employed elsewhere.

    Rural areas will need to be covered. Indeed that might be the last bastion of the Postal Service, but even there ensuring reliable high-speed internet (not necessarily delivered by government, of course) leaves only the issue of delivering packages.

    Wind it down. Create a plan, get a substantial majority of Americans on board, and eliminate the Post Office. Be reasonable, be fair, and get it done. Use that plan as a model of how to eliminate a major government enterprise.

  • Nichevo

    Let me neither praise the Post Office nor bury it. But with all their many problems, if anyone else will deliver an ounce of paper, trimmings from baby’s first haircut, medicine, gaskets, keys or flash drives, from any state to any other state for under fifty cents, please raise your hand.

    Postal/delivery costs have exploded all over. Anybody remember the $2.99 priority envelope? The 2-pound pak? Am I old, is that like wishing burgers were a nickel? How is the smallest letter size (and it coulda been much smaller if they had a smaller envelope) worth $24 to overnight from DE to NY when on a good day the PO woulda done that for the aforementioned first class stamp?

    Old-timers will tell you much harder they used to work – a fellow in Rutland or was it Roanoke told me they used to do overnights on a bus sorting the mail as they rode to do first class delivery from Chicago to New York, or was it VA to NY, overnight? Now they don’t care.

    I believe they used to have a much higher esprit de corps. Now it seems they are just playing out the string.

  • Stephen Mihael Kellat

    This is one of the few things the Constitution authorizes the federal level to do. DoD, State, Treasury, and USPS are core functions. We need to let go of non-core functions first before gutting core functions.

  • Jack Olson

    Nichevo, if no one but the USPS would be willing to deliver first class mail for postage close today’s rates, then there is no reason Congress shouldn’t abolish the USPS’s monopoly on first class mail.

  • Rich K

    The thing about the P.O is is that all you need to get service is a registered address,nothing more. All this new fangled tech mail requires a computer,smart phone,internet connection,tablet pc etc.
    See the issue you need to see now? Tech mail needs money spent to exist and utilize, Snail mail ,not so much. Figure that little gem of a problem out and “Then” work on solutions to eliminate the USPS.

  • crypticguise

    The US Post Office has too many people, too many Post Offices; too high wages, benefits and pensions.

    The mail is a fraction of what it was. There is NO REASON to continue to operate at a LOSS. Cut, cut, cut.

  • Aarradin

    “Constitution, Article I, Section. 8.
    “The Congress shall have Power..
    To establish Post Offices and post Roads;”

    Note that this AUTHORIZES the establishment of a Post Office but it does NOT REQUIRE one.

    I agree with the above comment on the solution: end the Post Office’s monopoly on first class mail, break it up and privatize it like AT&T was, and then sit back and watch what the free market can do.

  • Steve S.

    I cannot fault the USPS for what they are compelled to carry. I don’t like the catalogs or junk mail or other, er, stuff that they must deliver. Still, I can see a need for something of a “carrier of last resort.”

    Numerous changes could certainly be made, but please bear in mind that not everyone has – or will have – computers and/or other of the latest communication geegaws; the government does have an obligation to communicate to the citizenry (and vice versa) which presupposes a means to do so; official communications such as tax forms and draft notices and licenses and such must have a guaranteed manner of transmittal – which guarantee should not be expected of a for-profit delivery system. There are numerous stories where communications entrusted to private carriers piled up, undelivered. That finger does not point solely at the USPS.

    Bring the USPS back to its core functio. Forbid advertisers and political campaigns to use the USPS for their mailings. Let private enterprise deal with those. Commercial and political advertising should not have any role within the government in any case.

    Fund the USPS and allow it to offset costs with its fees. But I do not expect the government to turn a profit, and I see first class mail delivery as a government function.

  • Paul L. Quandt

    Many good comments on the several sides of this issue. However, the basic problem, as with a number of issues, is public service unions.


  • John the Revelator

    It was the union’s ability to strike when people relied on the USPS to deliver governemnt and other types of paper checks that have since been replaced by direct deposit that caused everyone to cave in to the union’s greedy demands. Compare postal workers FEHB (Federal Employees Health Benefit) rates to regular fed worker’s rates and you’ll see what I mean. Where mine was about $94 every paycheck, theirs was around $20 for the same plan. By the way, I was a National Guard Military Technician in uniform every day of my career with no strike option, overtime or really any of the stuff the regular GS types get. My retirement is basically a 401k (TSP) that got creamed in 2008 like everybody else. Needless to say, I have a full time job because I can’t afford my real retirement yet.

  • Mitch

    Union membership at the post office is voluntary. No one is forced to join any of the unions. There are a lot of scabs at the USPS. I’m a member of the NALC (letter carriers union) but we only have 80% membership in our local and 20% freeloading scabs who we still are required to represent if needed.

  • cincinnatus

    We’re all looking at this wrong. Don’t eliminate the Post Office make it an example of streamlined constitional based government.

    Then when we approach Homeland Whatsitfor Department, as an example, we can say, “ya streamlined? Nope. Ya constitionally needed. Nope…. So your not as good as the Post Office in any way……Okay boys send this function to DoD, this to Dept. Of Interior, get rid of all these subsections and sell this property.”

    Make the Post Office the Shining example! The one stop shop for national government questions, mail, free internet, cheap copies and faxing. Then disband the nonconstitutional Departments!!! With logical exceptions to expanded definitions, like Space not dreamed of by the Founders.

  • cincinnatus

    The Dems will never see it coming, but may eventually feel something aint quite right… But it will be to late we will have an example of small streamlined national government!

  • Mark

    Perhaps if the writer had performed his due diligewnce in researching the she story, he would have found the truth is missing from his fable.
    Truth 1- the Post Office was profitable until 2006
    Truth 2- the Republicans, led by Bush and Collins forced the Post Office to into bankruptcy using the PAEA in 2006
    Truth 3- The whole finance problem would be resolved if the Congress removed the PAEA
    Truth 4- By and large, the media has been lying and covering up for Congress
    Truth 5- This is easily the biggest scam perpetuated on the American public in decades and this writer knows it.

  • dwick

    Responding to Mark’s ‘truths’…

    Truth 1-‘the Post Office was profitable until 2006’
    In large part because the USPS was contributing nothing towards the future cost of the generous health benefits promised to their workers… an unfunded liability that had mushroomed to $75B by 2006.

    Truth 2- ‘the Republicans, led by Bush and Collins forced the Post Office to into bankruptcy using the PAEA in 2006’
    Typical knee-jerk ‘it’s Bush’s fault’ reaction… the fact is the PAEA was a bipartisan bill co-sponsored by 2 Democratic House members and passed by voice vote in the House and unanimous consent in the Senate.

    Truth 3-‘The whole finance problem would be resolved if the Congress removed the PAEA’
    Sure… and everyone will be able pay for their children’s college educations and comfortable retirements without putting aside any money today. The fact is even without the PAEA the USPS would have a $4.5B deficit over 2007-2011 (with losses every year since 2009)

    Truth 4-‘By and large, the media has been lying and covering up for Congress’
    You mean like they do for the Obama Administration?

    Truth 5-‘This is easily the biggest scam perpetuated on the American public in decades and this writer knows it’
    The bigger scam will be on the taxpayers if we end up having to bail out the USPS for the cost of their generous retiree health care benefits (note only 17 percent of private sector workers are employed at a business that offers health benefits to Medicare-eligible retirees)

  • Mitch

    So Mark…you just want all these retirees to go on Medicare? So the federal government is the provider of last resort? I thought the Libertarians were against federally provided health care. Where’s the free market solution here?

  • Mitch

    Sorry I meant that point for dwick.

  • CMatzen

    The comments of the uneducated are laughable, at best. Do your research, folks. Here’s a good place to start:
    Unions: Not the problem. Unions have given us 8 hour work days, 40 hour work weeks, minimum wage, holidays, vacation, and benefits…things that MOST Americans enjoy, in one form or another. The Postal Unions are not THAT strong, believe me. If they were, I would not be doing the job of 2 people every night, at risk to my own health, despite guarantees by management that they would put my health and safety first and foremost. Postal managers do what they want, when they want, regardless of union presence or objections.
    The Problem: Bad Management, Shady Accounting Practices, Shameful Governmental Manipulation of Revenues Generated by USPS, LOBBYING.
    First class mail volume has dropped significantly. In the past, 1st class mail revenue off-set and subsidized standard, or “junk” mail costs. This was when 1st class mail was at 80%, and junk mail was at 20%. Now the volumes are the opposite, and yet standard mail still enjoys huge discounts and subsidies from the USPS. As recently as 2010 it was estimated that the USPS gave away $15 billion in discounts to large mailers for “shared work” discounts that only cost those mailers a little over $4.5 billion to process. This is not the fault of the Unions, or the average postal employee.
    Getting rid of “junk” mail, by the way–not an option. This is a trillion dollar a year industry, that supports much of this nation and the US Government. If you think things are bad now, eliminate junk mail and privatize the USPS…anarchy within a year.

  • Kris

    Mitch@34: Congratulations on completely missing dwick’s point.

    “The PAEA stipulates that the USPS is to take any surplus at the end of a fiscal year, and put that amount into the Postal Service Retiree Health Benefits Fund to prepay for employees retirement costing the USPS a total of 500 billion dollars between 2007 and 2015.” Mark@32 wants the PAEA abolished. dwick@33 counters that if this is done, then these benefits (above and beyond Medicare) will have to be payed by the taxpayers.

    How could you possibly conclude from this that dwick wants these retirees to go on Medicare? How can you not understand that the preferred Libertarian or free market solution is indeed for employees to provide for their own retirement, possibly through their company?

    I suppose I shouldn’t be surprised at this level of reading comprehension from someone who claims that there are many “freeloading scabs” at the USPS. Few of us were aware that the USPS was on strike. Then again, how many of us would notice?

  • Liam Skye

    USPS currently has less than $0 unfunded pension liability. In fact, its FERS account currently has a surplus of around $11 billion and it is currently not even required to make deposits into its fully-funded CSRS fund.

    Retiree health benefits currently have an unfunded liability of around $30 billion – which will be reduced to $0 over the course of the next 20 years by interest on its current balance in the fund – there is no need for USPS to contribute any more than the $44 billion it has deposited in this fund since 2006. The conversion from cash to accrual accounting on this particular benefit has crushed USPS because of its ridiculously compressed schedule but the goal line is in sight.

    Here’s some food for thought for the rubes who think that USPS paying into this fund as required by PAEA is intended to or will protect the taxpayers from getting stuck with this expense in the future: Exactly the opposite will happen. Since this money is not invested, but is immediately squandered by Congress and replaced by IOUs from the Treasury, this accounting gimmick by Congress actually ENSURES that taxpayers will be stuck with the tab when those IOUs come due. It is called “debt monetization” when Congress sells debt and pretends that the money they get for it is “revenue.” This practice has bankrupted Social Security and will bankrupt the entire nation if allowed to continue. These loans from USPS to the Treasury should be stopped immediately.

    Postal union dues are NOT mandatory.

    Postal workers do NOT have the right to strike.

  • Mad Jack

    John the Revelator nice try but postal workers are forbidden by law from striking. The last postal strike was in 1971 and it was an illegal wildcat strike. Out of that strike came The Postal Reorganization Act which mandates that postal unions go to binding arbitration if we are unable to negotiate a contract.

  • Richard

    The 1970 Postal Reorganization Act (PRA) made the Postal Service self-sustaining. It was exempted from the general budget, funding laws, and executive branch control. It’s run as an independent federal agency on its own.

    The first paragraph of the Act reads:

    “The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people. It shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities. The costs of establishing and maintaining the Postal Service shall not be apportioned to impair the overall value of such service to the people.”

    During the 1970s and 1980s, by administrative decision, it was at times included and excluded from executive budgetary consideration, depending on whether surpluses or deficits occurred.

    In the 1989 Omnibus Reconciliation Act, it was put permanently off-budget. Congress made it independently self-financing. Since then (with no federal funding), it shared off-budget status with the Social Security Trust Fund, supplemental military allocations, and black Pentagon and intelligence ones.

  • Richard

    The Postal Accountability and Enhancement Act of 2006 that requires USPS to pay huge sums of cash into the U.S. Treasury to cover future health and retirement benefits. In fact, here is a list of required payments by USPS covered by this bill:

    The United States Postal Service shall pay into such Fund–
    ■$5,400,000,000, not later than September 30, 2007;
    ■$5,400,000,000, not later than September 30, 2008;
    ■$5,400,000,000, not later than September 30, 2009;
    ■$5,500,000,000, not later than September 30, 2010;
    ■$5,500,000,000, not later than September 30, 2011;
    ■$5,600,000,000, not later than September 30, 2012;
    ■$5,600,000,000, not later than September 30, 2013;
    ■$5,700,000,000, not later than September 30, 2014;
    ■$5,700,000,000, not later than September 30, 2015; and
    ■$5,800,000,000, not later than September 30, 2016.

    Not later than September 30, 2017, and by September 30 of each succeeding year, the United States Postal Service shall pay into such fund the sum of attributable to the service of Postal Service employees during the most recently ended fiscal year.

    The P.A.E.A. bill was introduced by Rep. Thomas Davis [R-VA11] and had three cosponsors:
    1.Danny Davis [D-IL7]
    2.Henry Waxman [D-CA30]
    3.John McHugh [R-NY23]

    So, both republicans and democrats sponsored this bill. The bill passed in the House of Representatives by voice vote. – a record of each representative’s position was not kept.

    The bill passed in the Senate by Unanimous Consent and a record of each senator’s position was not kept of this either.

  • dwick

    If the USPS ends up defaulting on their retiree health care benefit payments down the road, just who do you think is going to end up holding the bag?

    As long as the USPS continues to promise cadillac health care benefits to their retirees, then I want the USPS to have a credible plan for funding those benefits. Expecting the taxpayers to bail them out is not a credible plan. And ‘pay as you go’ (i.e., the USPS ‘plan’ prior to 2006) for a business with a completely unfunded $75B liability and precipitously declining revenues based on a business model in wrenching transition was not credible either.

    while I might wish for a better ‘free-market’ solution, Medicare is what we have and it’s not going anywhere. And if Medicare is good enough for 83% of us tax paying private sector retirees, then it’s good enough for USPS retirees also.

  • Eastern Tech

    I’d go broke to under the present conditions:
    A: retaining FOUR layers of Management,
    with the idea since 2 layers can’t get it

    B: Keep buying MP equipment that doesn’t
    work, sooner or later they’ll get it right.

    C: Allowing Tech’s and mechanics to fail

  • Liam Skye

    dwick, you have no understanding of federal finance. Requiring USPS to “prefund” its retiree health benefits does not protect the taxpayers from having to cover those expenses if USPS goes belly up. In fact, exactly the opposite is true. Since Congress does not invest that money it gets from USPS, but immediately squanders it, USPS making these loans to the Treasury actually ENSURES that the taxpayers are stuck paying whether USPS goes belly up or not!

  • The Postman

    History is preserved in the written word. Letters written back and forth, boxed and put away to be enjoyed at a later time. Presidents, soldiers, lovers,family members and friends writing notes to each other, preserving history. When’s the last time you re-read an old email? If we don’t start putting pen to paper again, then the 2k’s will be our dark ages.

  • Mitch

    If Kris did her homework she would know that postal workers are forbidden from striking. Also @Kris where did I say that the USPS is on strike? I use the word “scab” in the context of those who reap the benefits of the union without belonging to the union. They get the same pay and benefits that a union member does and get the same union representation but refuse to pay the dues to support the union. That to me is a scab. Your lack of understanding of the facts is typical of the free-market libertarians who blindly follow the archaic teachings of Ayn Rand without any regard to the nuances of the real world. Take off your rose-colored Rand Paul glasses and recognize that the “invisible hand” of the free market doesn’t always provide the optimal result.

  • Mitch

    There also seems to be a lot of misconceptions about “overly generous” retirement programs. In the 1984 national agreement all employees hired prior to 1984 are the only workers to receive a full pension. All employees who started in 1984 or later receive a much smaller pension in addition to a TSP savings account (similar to an IRA) and also a Social Security payment. If I retire in 2014 after 30 years I will receive a pension check of about $1500/month plus a social security check of about $1500/month plus anything I choose to withdraw from my TSP. So if you call that “generous” or “excessive” I would disagree but I think I can survive on it. I call it retiring with dignity and I thank my postal union (NALC) for helping us get that benefit.

  • Paris is Burning

    The first misconception of the article is that Fed Ex and UPS are cheap. I can mail flat rate boxes all across the country for 11.95. If I use the Fed Ex or UPS it would cost me alot more. The Post Office keeps hiring exectives from within who have no business sense. If they marketed better to small businesses that could best use their services they could thrive. As far as employees pay and benefits, I live in America that fought for fair pay and wages on assembly lines. Stop [complaining] about what government employees make. If your company doesn’t have good healthcare or pensions, it should. Fight for it don’t [complain] cause someone gets it and you don’t.

  • Mitch

    I just read an article saying USPS delivered 30% of Fedex’s ground package last quarter. Another case of the government being more cost effective than the private sector?

  • Nye

    You spelled the Postmaster General’s name two different ways, neither of them correct. That’s hard to understand, since the CNN Money article you quoted did spell his name correctly: Donahoe.

  • njcommuter

    Post offices also serve other goverment functions. For instance, when they accept passport applications they are acting for the Department of State.

    On the other hand, they are defaulting on their primary job of delivering documents by forcing people to walk hundreds of feet from their homes or to drive miles in order to receive mail delivery.

    And they are imposing disposal costs for paper junk mail on citizens who are required to be their customers. (I would love to see them required to pass along a disposal fee for unsolicited paper to the mailer; the fee to be paid to the municipality, home or apartment owner who pays the disposal fees.)

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