USPS Reports $15.9 Billion Loss, Asks Congress For Help

New submitter Gaildew2 writes with news that the embattled United States Postal Service has posted a $15.9 billion loss over the past fiscal year, more than three times the amount it lost the previous year. "The USPS, which relies on the sale of stamps and other products rather than taxpayer dollars, has been grappling for years with high costs and tumbling mail volumes as consumers communicate more online. In September, the Postal Service hit its $15 billion borrowing limit for the first time in its history. That leaves it with few options if it suffers an unexpected shock, such as a slowdown if lawmakers are unable to prevent the year-end tax increases and spending cuts known as the 'fiscal cliff.' ... Postal officials want Congress to pass legislation that would allow the agency to end Saturday mail delivery and run its own health plan rather than enrolling USPS employees in federal health programs, among other things."

Comments

Mass Mail

[Anonymous Coward]

The only people using mail anymore are junk mailers. And they get an ENORMOUS discount to send out thousands of flyers and coupons. So let's raise our taxes even more to prop up a bunch of spammers. If you don't, the union gets angry and leans on politicians. That's just good policy.

Re:Mass Mail

[scumdamn]

Today I learned that old people and poor people don't use snail mail. Thanks for the lesson.

Re:Mass Mail

[Shining Celebi]

The USPS doesn't run on taxes, they are self-sufficient. That's why they're not asking for a bailout, but for an end to Saturday mail delivery and other USPS cost saving measures. At the same time, the USPS is generally hobbled by Congressional requirements that they do this or that and overfund their retirement obligations and all sorts of other things.

Re:Mass Mail

[orthancstone]

At the same time, the USPS is generally hobbled by Congressional requirements that they do this or that and overfund their retirement obligations and all sorts of other things.

This. Pundits love to ignore the fact that the same Congressional tools that whine about USPS' inefficiency are typically the ones preventing USPS from enacting changes that would help its bottom line and potentially save it from needing massive loans.

Re:Mass Mail

[Sir_Sri]

Actually it's the rare but important stuff sent via the mail that you need to subsidize and why there are massive government postal programmes at all. If you can't check your bank balance online, if you need to send legal documents, contracts, bill etc. all of that needs to be accessible to people. Your voter registration any government correspondence etc. is all doable through mail. And mail services guarantee package delivery to the entire country usually (I'm not 100% sure how this works for the US with things like the republic of marshall islands or the like, which are sort of overseas independent dependencies of the US government, but not full blow territories like puerto rico).

All of the junk mail crap is there to subsidize the actually important stuff. The effective monopoly postal services had on junk mail was an indirect subsidy, and I can't imagine Fed Ex wanting to go door to door delivering pizza coupons, but who knows. Even things like magazines, which, yes, people actually buy and read, would be seriously inhibited if they had to pay significantly more for delivery costs.

Obviously, the basic problem all postal services have is their regulatory requirements don't line up with their financial ones in a changing market. Government needs to take a bit of a heavy hand in any industry where the goal is to actually reduce your workload. Medical providers should be looking for ways to reduce their number of people getting sick, police should be looking to reduce the amount of crime, the post office should be looking for ways to reduce paper mail, but at the same time you do need reliable cross country (cross world actually) mail delivery - because some of what is sent via mail is both important and needs to be kept inexpensive. If you want to spend 8 bucks to mail a letter to arrive tomorrow rather than 50 cents for it to arrive in 3 days fine, but for the people who cannot afford the extra 7.50 or whatever it is you don't want to lock them out of communication, most especially if they are your customers.

As to the specific problem though, of mail employees being necessarily treated like career people and not minimum wage disposables, and all of that stuff, I don't really know. If the government is going to mandate they provide a service without a way to pay for it (e.g. saturday mail delivery) that's going to have to change or the government is going to have to step in financially.

Re:Mass Mail

[serviscope_minor]

In other words, Republicans set it up to fail so they could point to it as an example of inefficient government.

Interestingly, the Labour party in the UK did exactly the same thing in order to justify privatisations.

The post office is obliged to let other companies collect mail and sell stamps. This means all the easy collections like collecting a huge number of mail sacks from one location are taken care of by private companies. The lucrative part (selling stamps) is also taken care of by private companies.

The difficult part (last mile delivery to every unique address in the UK) is taken care of the Royal Mail. Oh and they get to charge the colelction companies a very small amount set by the government for this last mile delivery.

It's basically a cunning scheme to funnel tax money into cronies pockets while giving the appearance that privatisation is good because all the private mail compaines are profitable and the only non private one hemorages money and has to be propped up by the taxpayer.

It is a fine example of the government being extremely crap. Except that the part of the government in question is Parliament, not the Royal Mail.

Re:Mass Mail

[jjohnson]

Of course I blame one party: It was the Republicans who were in the majority in both houses of Congress when they passed the laws that crippled the financial position of the USPS. It was the Republicans who voted for the law, while most Democrats opposed it. Who else should I blame?

Does saying "it's all grey" make it easier for you to ignore people who are fucking over other people?

Cuts

[jamesl]

This is simple.
1. Cut deliveries to three per week -- MWF and TThSa.
2. Raise rates to cover costs.
3. Close local post offices and replace them with contractors where required.

Re:Cuts

[Anonymous Coward]

What's killing them is health insurance. The union got a deal where the employee pays less than $200 per month for a family plan while the USPO pays the balance, something like $1000.

Re:Cuts

[Anonymous Coward]

You're a fucking nincompoop. USPS has been gutted by corrupt politicians who have been paid off by private interests.

The entire "public is less efficient than private" lie that had been repeated so often that everyone now believes it is just that. A lie. The reality is that private industry is far more efficient at corrupting and side stepping morality issues in the quest for a dollar. That *seems* like it's more efficient at first glance, but it actually incurs a giant negative externality that is not accounted for.

Now think very carefully before you reply with some hilariously stupid straw man argument.

Re:Cuts

[Anonymous Coward]

So, based on your numbers, if we did that they'd 'only' have made a $10,400,000,000 loss.

Presumably you can explain how to 'simply' fix that part.

Re:Cuts

[firex726]

Was it the Union or Congress?

I thought it was Congress that mandated that they prepay it all for the life of an employee when hired.

Re:Cuts

[Rob the Bold]

Was it the Union or Congress?

I thought it was Congress that mandated that they prepay it all for the life of an employee when hired.

The "crisis" is entirely manufactured by Congress. Yes, Congress. They (and by "they," I mean mostly Republicans who seem to want to drive the post office into bankruptcy) required that the Post Office prepay pensions to the extent that no other business is required to do.

Lest you doubt this statement: The Postal Accountability and Enhancement Act of 2006 required the USPS to prepay pensions for all employees for 75 years in advance within 10 years.

That's right, 75 years. The USPS is required to prepay pensions for the next 75 years. Let that sink in.

Is there any other business you can think of that is required to stash away the pension funds now for its employees not yet born?

Re:Cuts

[Rob the Bold]

If they cut delivery dates, that limits my options and makes me even less likely to use them, especially if I need timely delivery of something like say a rent check or a bill payment (believe it or not, there are landlords and rental companies, as well as utilities and such that still only accept payment in person or a check in the mail as opposed to paying online).

You're free to spend $13 to FedEx your rent check right now (get your quote here - I picked slowest/cheapest option to send an envelope across town). By what factor would first class postage rates need to increase to be "uncompetitive" with that?

Re:Cuts

[GLMDesigns]

You seem to forget that most municipalities (and much of the Federal government) has huge pension shortfalls. Why? Because the gov't agency involved does have a pay-as-you go system. Pension funds are not funded until they are being withdrawn. That is one of the reasons we are in such a f**king mess.

Say an employee is to get a salary (s) and pension (p). Every pay period the government agency should pay salary and place the appropriate pension payment into an account. We are not funding our pensions.

I haven't read the link you provided - there may have been excess in those bills - but before laughing and ridiculing them out of hand maybe you should reserve a little frustration for the agencies that do not pay pensions and expect later generations to fund them.

Re:Cuts

[kbolino]

The pre-funded pension is only one part of the problem (also, accounting does not work as simply as you seem to think). The problem is threefold (at least):

1. The pension mandate (from Congress), as already mentioned;
2. The USPS is forced by Congress to run unprofitable postal offices and routes;
3. The USPS cannot set its own rates (they are set by, surprise surprise, Congress).

Either the USPS is a public service, in which case it should be reintegrated into the government and divorced of the need to make a profit, or else it is a business and it should be able to set its own rates and terms for doing so.

You cannot have it both ways and get everything you want, which is exactly what Congress has done to them.

Riduculous Retiree Benefits

[scarboni888]

The ridiculous retiree benefits mandate handed down from congress is pretty much the sole reason for this unnecessary debacle.

No other organization is required to provide such an absurd level of retiree benefits payment so why is this insanity allowed to persist in light of the fact it could potentially doom the USPS?

Re:Riduculous Retiree Benefits

[svartbjorn]

It's hard to imagine a rationale for it other than a puposeful plan to bankrupt the USPS so it can be privatized.

Re:It's time to end the monopoly...

[scarboni888]

And what about the people who live in places that are too expensive for privatized couriers to make a profit serving?

What are they to do, take a flying leap?

not quite

[nten]

even using the highest estimate of F-22 cost I could find we'd need to give them 44 F-22s. Raise rates on mass mailers perhaps? The only reason I check my mail anymore is to get information the government wants me to know about, car registration, voter registration, jury duty etc. If I could give an email address to uncle sam, I would be more than happy to do away with my mail address. Let it die.

Re:not quite

[Darth Snowshoe]

THIS. Congress tinkers with the mandate of the USPS, and then complains that its not making a profit. Don't you get it? It's not allowed to compete in ways that allow it to make a profit.

Pretty much all the people around at the founding of the nation recognized the value of reliable, efficient, post service available for all. It's essential infrastructure. It's one of the reasons why business works in America. 'Based on the Postal Clause in Article One of the United States Constitution, empowering Congress "To establish post offices and post roads", it became the Post Office Department (USPOD) in 1792. ' - Wikipedia

Geez, try sending essential items to your buddy on Peace Corps assignment in Africa, and you will quickly come to understand the value of a trustworthy, efficient and transparent postal service.

And you can't just eliminate the USPS with a wave of your hand. Just figuring out how to do that would be a tremendous amount of work. Many laws and much legal precedent rely on the existence of the USPO, for instance. And still, weirdly, there are lots of things that cannot be sent over a wire.

Re:The next time

[oursland]

THANK YOU! I wish more people knew that Congress decided to make demands on the USPS that no company could ever meet. And to think that the Republicans frequently politic on "running the government like a business" yet they make actions to ensure the government business fails.

Not health insurance...

[Anonymous Coward]

What's killing them is continuously paying ridiculous pensions to their workers who retired years and years ago. They need to default on those pension agreements and stop the payments cold turkey or else they will *NEVER* financially recover.

The whole idea of continuing to pay someone's salary long after they've quit working is utterly stupid. You're supposed to put aside a portion of your earnings into retirement savings while you're actively working.