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Congress ignores looming crisis for U.S. Postal Service



Published: Mon, August 20, 2012 @ 12:00 a.m.

The latest report on the finan- cial health of the U.S. Postal Service will not get the serious attention it should from Congress, being that it comes in August of an election year.

Congress, having done nothing to address the Postal Service’s financial crisis when it had the time, is now otherwise preoccupied. That may be one reason why Congress is subject to even more derision than the beleaguered Postal Service.

Things have been going from bad to worse at the Postal Service, and, indeed, a large part of that can be laid at the feet of Congress, which imposed an unnecessary mandate in 2005 that postal pensions be funded 75 years into the future. That is, the Postal Service has to put aside billions of dollars now in anticipation of the retirement of employees who haven’t even been hired yet — some of whom haven’t even been born.

That requirement is part — but certainly not all — of the reason that the Postal Service posted losses of $57 million a day in the last quarter.

From April to June, the Associated Press reported, the Postal Service claimed losses totaling $5.2 billion, up $2.1 billion from the same period last year.

A rough breakdown

A little more than $3 billion of that can be attributed to the pension funding requirement. The Postal Service says it anticipates missing yet another payment due to the Treasury Department, the second such default.

But unrealistic pension payments aside, that still leaves more than $2 billion in other losses, compared with a year earlier. About half of that is attributed to increases in workers’ compensation costs and the other half is due to declining business, especially in First Class mail.

Congress is derelict in not readdressing the pension issue. But the Postal Service has not demonstrated that it is willing to rein in its other costs in ways that would allow it to better protect its bread and butter, First Class mail.

Indeed, the strategy that the service is pursuing — closing hundreds of facilities, including the Youngstown mail processing plant — will result in slower First Class service and drive customers to look for alternatives.

Congress has a responsibility to work with the Postal Service to protect the level of mail service that millions of American families and businesses continue to rely on. And that would involve some privatization ideologues in Congress to acknowledge their mistake in placing an unrealistic burden on the Postal Service. They might want to consider what the collapse of the Postal Service would mean to their constituents and the backlash they will face when reality sets in.

But the Postal Service also has to demonstrate that it has a viable plan — meaning one that goes beyond taking a hatchet to the very facilities that would allow it to meet its historic mandate.


Comments

1Phil_EngAmer(32 comments)posted 2 years, 2 months ago

Really this is another sign that it’s time for the postal service to move away from public sector thinking and move to private sector business theory. The writing has been on the wall, as net income and volume have mail have steadily declined (http://chi.mg/oBezLD), but it’s clear a lot needs fixing. It may be time for the USPS to embrace private sector business theory. Government regulation is doing it no favors, and unless it can adapt, more layoffs seem to be the only way to account for faulty business model. It’s sad to see such misfortune befall the USPS, but solutions are there if they can embrace innovation.

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2IslandMike(757 comments)posted 2 years, 2 months ago

It's hard to imagine Congress putting something on the backburner. NOT!!

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3southsidedave(4784 comments)posted 2 years, 2 months ago

The Postal Service cannot compete profitably in today's global commerce. It is not going to be an easy fix and many employees will their jobs, but action is required to remedy the bleeding of cash expenditures.

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4DontBanThisDrone(469 comments)posted 2 years, 2 months ago

There's a looming crisis for much more than just the postal service, lol.

(-:

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5jojuggie(1292 comments)posted 2 years, 1 month ago

Social Security is going broke.
Medicare is going broke.
Amtrak is broke.
The Post Office is broke.
Fannie Mae is broke.
Freddie Mac is broke.
etc. etc. etc. etc.

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