Archive for Thursday, March 26, 2009

USPS chief: Post office running out of money

March 26, 2009

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— The post office will run out of money this year unless it gets help, Postmaster General John Potter told Congress on Wednesday as he sought permission to cut delivery to five days a week.

“We are facing losses of historic proportion. Our situation is critical,” Potter told a House panel.

The agency lost $2.8 billion last year and is looking at much larger losses this year. Reducing mail delivery from six days to five days a week could save $3.5 billion annually, Potter said.

Potter also urged changes in how the post office pre-pays for retiree health care to cut its annual costs by $2 billion.

If the Postal Service does run out of money, the lingering question, Potter told the House Oversight post office subcommittee, is which bills will be paid and which will not. Ensuring the payment of workers’ salaries comes first, he said, but other bills may have to wait.

Potter first raised the possibility of delivery cutbacks in January, but the idea has not been warmly received in Congress.

“With the Postal Service facing budget shortfalls, the subcommittee will consider a number of options to restore financial stability and examine ways for the Postal Service to continue to operate without cutting services,” subcommittee chairman Stephen F. Lynch, D-Mass., said.

Lynch said the financial stability of the Postal Service is “critical to the American expectation of affordable six-day mail delivery.”

Even if the agency succeeds in reaching its planned cost cuts of $5.9 billion, there could still be a $6 billion deficit in 2010, Potter said.

“Without a change we will exhaust our cash resources,” he said. “We can no longer afford business as usual.”

Asked if layoffs would occur, Potter said it is possible but he hopes avoidable.

Last week, the post office said it planned to offer early retirement to 150,000 workers and is eliminating 1,400 management positions and closing six of its 80 district offices in cost-cutting efforts. Potter said he expects 10,000 to 15,000 workers to accept the early retirement offer.

Dan Blair, head of the independent Postal Regulatory Commission, suggested that other savings are possible through closing small and rural post offices — something Congress has resisted in the past. He added that it may be necessary to increase the limit on the amount of debt the post office can carry.

The post office had a $384 million loss in the first quarter of the fiscal year — October through December — which is usually the busiest period because of the holidays.

Officials said the recession has contributed to a mail volume drop of 5.2 billion pieces compared to the same period last year. If there is no economic recovery, the USPS projects volume for the year will be down by 12 billion to 15 billion pieces of mail.

Over the past year the post office says it has cut 50 million work hours, stopped construction of new facilities, frozen salaries for executives, begun selling unused facilities and has cut post office hours.

Last year’s high fuel prices also sapped funds from the post office, which operates more than 200,000 vehicles. Every 1-cent increase in the price of fuel costs the post office $8 million.

Comments

Chris Ogle 6 years, 4 months ago

I don't need my junk-mail everyday... if you have to, just bring it once a week.... trust me, I can handle the wait.

deskboy04 6 years, 4 months ago

i would be fine with mail twice a week. All we get is junk mail.

jaywalker 6 years, 4 months ago

Yup, I'm looking forward to the government running our healthcare system alright.

Chris Ogle 6 years, 4 months ago

Jay- I smell what ur stepping in.. They couldn't even handle the digital converter box coupons.

just_another_bozo_on_this_bus 6 years, 4 months ago

Trying to draw parallels between this and the healthcare system is simplistic at best, but just for argument's sake, try to get Fedex or UPS to deliver a letter for 44 cents.

SettingTheRecordStraight 6 years, 4 months ago

It's long past time to get the government completely out of the letter delivery business. Where, oh where in the Constitution is the government granted authority to get involved in the delivery of mail?

jafs 6 years, 4 months ago

If fuel costs are the major cause of this budget shortfall, they should have seen this coming, wouldn't you think?

Other than declining usage and fuel costs, I wonder how they managed to have an almost $3 billion shortfall.

Music_Girl 6 years, 4 months ago

I personally don't see any issue with cutting back how often mail is delivered. Perhaps they could cut residential routes to 3 days a week and cut business routes to 5 days a week. What would it really hurt? With the digital age we are in now, most of us handle our affairs online anyway.

jafs 6 years, 4 months ago

3 days a week is a bit too infrequent for us middle-aged folks, MG.

5 might be fine.

average 6 years, 4 months ago

SRTS - Article I, Section 7 of the US Constitution.

"The Congress shall have power ... To establish post offices and post roads".

Honestly, the USPS rates are cheaper than just about anywhere else on the planet for domestic mail. But, raising them substantially would cut volumes, so a catch-22 there.

But, I'll gladly take the worst day I've ever had at the post office (or DMV for that matter) over the best experience I've ever had with Aetna, UnitedHealth, Coventry, Kaiser, or any of the rest.

jaywalker 6 years, 4 months ago

I'm with ya on the converter, xbus.

bozo,

Please list for us the highly efficient and well-run national programs the govt. has taken over in the last 40 years. The USPS has been around for decades. Simplistic parallel? Not really. Here we have a national agency on the verge of bankruptcy, and this didn't come about overnight. There couldn't be anything more complex and far-reaching than the healthcare industry, 5 to 10 times more vast in its scope than public education, and our bureaucrats want to take that on? I hear ya on the cost, but that's a point on my side of the argument. If the USPS were a privately owned businesss they would have gone bankrupt years ago, and their lack of vision as technology has advanced is paralyzing. Healthcare needs serious overhaul, but our government commandeering the system is a catastrophe waiting to happen.

Chris Ogle 6 years, 4 months ago

Hey boz- Could you see if UPS would deliver my junk mail??? That would save some trees.

SettingTheRecordStraight 6 years, 4 months ago

average,

I don't have my pocket Constitution on me today, but I am more than willing to stand corrected.

Jaylee 6 years, 4 months ago

everybody is losing money. it is sad that with all these failing local and grassroots necessities, all our legislature could think to help was the stock market, as if that were the source.

HermioneElliott 6 years, 4 months ago

Aside from junk mail the only think I get is utility bills and my National Geographic. My bank set me a card thanking me for having an account with them. I thought it was sweet. Has anyone else been getting better service lately at stores? Sign of the times.

PapaB 6 years, 4 months ago

I would much rather have the USPS deliver my mail, packages, etc. They are a non-profit, self-contained government program. Their rates are almost always cheaper and they are being responsible by recognizing lack of demand, thus a reduction in delivery days. I'm all for it, since I can go without mail on Tuesdays (the lowest volume day of the week). Over the years, the USPS has done plenty to streamline their offerings and reduce costs through technology, but email has been a big hit for them and ebay doesn't quite make up for it. Let me also say that there have been many years where the fed govt dips into USPS money while the USPS can't ask for it back or for govt help. Their only recourse is to cut costs or raise postage prices.

tolawdjk 6 years, 4 months ago

I don't mind a cut back to 5 or even 4 days as long as those self serve postal kiosks are available at all locations -and- they maintain some regular schedule of making sure those drop bins are emptied and useable. I don't think I have actually gone to a counter and talked to an actual postal employee in 6 months.

just_another_bozo_on_this_bus 6 years, 4 months ago

"Please list for us the highly efficient and well-run national programs the govt. has taken over in the last 40 years.

Please list any national programs the government has taken over in the last 40 years, jaywalker. (Aside from medicare, which is, in fact, run much more efficiently than private insurance is.)

jaywalker 6 years, 4 months ago

How 'bout the big one, bozo, education? And I believe our children's scores have gone down every single year since. Hearing from alot of advocates for our public education system these days? And Medicare only seems to be more efficient because it takes up somewhere close to 40% of our annual government healthcare expenditure and causes doctors to stop taking new patients while simultaneously raising rates on non-Medicaid patients to offset the costs. Throw money at the problem, same strategy Enron embraced and the same tactic being toyed with by Obama that the Japanese have proven over the last decade does not work. It too will fail. At any rate, private insurance' efficiency isn't even close to the problem with the system. They're efficient at what they do. Uncontrollable costs are the issue.

just_another_bozo_on_this_bus 6 years, 4 months ago

Public education has been the tradition in this country for well over a century, jaywalker. And if "privatization" would give us anything similar to private healthcare, god help us all.

The problems with Medicare are many, and as usual, your simplistic analysis falls way short of the mark. Clearly, the biggest problem with Medicare is that it has to operate within the mess of a healthcare system we have in this country.

"Throw money at the problem, same strategy Enron embraced and the same tactic being toyed with by Obama that the Japanese have proven over the last decade does not work."

I'm not going to defend the way Obama is handling the economic meltdown. I would certainly do things much differently-- but that said, I'm sure glad he's in charge, and not John McCain (or you.)

"At any rate, private insurance' efficiency isn't even close to the problem with the system. They're efficient at what they do."

Yep- they're quite efficient at producing profit for their stockholders.

pace 6 years, 4 months ago

Raise the price of junk mail and require it to be within the confines of materials that are recyclable, eliminating plastics, etc. if they use other material the letter should bump to first class. Saturday delivery should be eliminated. A lot of businesses and homes rely on mail, but few would be affected by a five day delivery system. RAISE the price of junk mail. The postal system should get a new attitude, they deny that communication has undergone a global change, fight recycling and worship junk mail as a god.

jaywalker 6 years, 4 months ago

"Public education has been the tradition in this country for well over a century"

I don't know what that's supposed to mean, but the federal government took over the entire education system from the individual states in the mid-60's.

"The problems with Medicare are many, and as usual, your simplistic analysis falls way short of the mark"

I wasn't trying to digress any further into an analysis on Medicare, bozo, but simplistic though my analysis may be at least I gave some, whereas you have not other than a statement much more simplistic than anything I've written here.

"I'm sure glad he's in charge, and not John McCain (or you.)"

I chose Obama over McCain because I felt he had a better chance to lead. I was unaware my name was on the ballot, but I'm glad I'm not in charge of it either.

"Yep- they're quite efficient at producing profit for their stockholders"

Since that's what private companies do your sarcasm is misplaced. Thanks for adding nothing to the conversation, pleasure not talking with ya.

just_another_bozo_on_this_bus 6 years, 4 months ago

"I don't know what that's supposed to mean,"

It means exactly what it said.

"but the federal government took over the entire education system from the individual states in the mid-60's."

Huh? Certainly, the federal government has more influence over education now than 40 or 50 years ago, but to say it "took over" is beyond hyperbole.

"I don't know what that's supposed to mean, but the federal government took over the entire education system from the individual states in the mid-60's."

What I said was a simple, but factual statement. What you said was merely simplistic. There is a difference, although you demonstrate regularly that you don't know what it is.

"Since that's what private companies do your sarcasm is misplaced. Thanks for adding nothing to the conversation, pleasure not talking with ya."

No sarcasm involved. We have a system that's designed to deliver profits to stockholders, not healthcare, and that's primarily what we get.

jaywalker 6 years, 4 months ago

" It means exactly what it said"

It 'said' nothing.

"Huh? Certainly, the federal government has more influence over education now than 40 or 50 years ago, but to say it “took over” is beyond hyperbole"

Do some research and then get back to me if you actually want to discuss this, bozo. Look up the Elementary and Secondary Education Act which virtually transferred all power to the fed by putting them in control of funding. Then look up the initiation of the Dept. of Ed. in 1980 as a cabinet position. Then look up the downward trend of schools since all this took place.
"What I said was a simple, but factual statement"

What you said was "the biggest problem with Medicare is that it has to operate within the mess of a healthcare system we have in this country".

Sorry bozo, that's the epitome of 'simplistic'. At least I gave a couple reasons contributing to Medicare's problems.

"No sarcasm involved. We have a system that's designed to deliver profits to stockholders, not healthcare, and that's primarily what we get"

Saying that line wasn't sarcastic is silly. And if the system's not designed to deliver healthcare how are all these people using it for just that?

Like I said, thanks for not contributing. I'm trying to have a respectful discussion with ya, bozo, and haven't responded in a personal fashion in some time now. If either of those things are beyond you we don't need to continue.

just_another_bozo_on_this_bus 6 years, 4 months ago

I said,

“Public education has been the tradition in this country for well over a century”

jaywalker said,

"It 'said' nothing."

So do you disagree with the statement? Or are you just discounting it offhand out of sheer intellectual laziness?

"Look up the Elementary and Secondary Education Act which virtually transferred all power to the fed by putting them in control of funding. "

Sorry, you're just wrong--

http://perotcharts.com/2008/05/funding-sources-for-us-public-elementary-and-secondary-schools/

"Sorry bozo, that's the epitome of 'simplistic'. At least I gave a couple reasons contributing to Medicare's problems."

No, you didn't. You tried to reduce a very complicated problem to a couple of symptoms of the that problem, not the cause. Clearly, the biggest single CAUSE of problems in Medicare is that it has to function within a completely broken healthcare system.

"Saying that line wasn't sarcastic is silly."

sarcasm |ˈsärˌkazəm| noun the use of irony to mock or convey contempt

I can tell you that there was no sarcasm involved in my statement. It was a quite literal description.

" And if the system's not designed to deliver healthcare how are all these people using it for just that?"

We spend twice as much money as other comparable societies do and cover a much smaller percentage of our population in so doing. Delivering profits instead of healthcare is exactly why that happens.

jaywalker 6 years, 4 months ago

"So do you disagree with the statement? Or are you just discounting it offhand out of sheer intellectual laziness?"

So that's a 'no, I can't' to my respectful discussion question, bozo? The statement is nonsensical, bozo. Public education has been around since before the Constitution was written, not just the last century. That being said, the statement isn't on topic either since the discussion is over when the federal government took over education, not when education began.

"Sorry, you're just wrong—"

Mmkay. "The enactment of the ESEA revolutionized the federal government's role in education. Prior to the law's passage, educational policy-making had been the near exclusive domain of state and local governments. However, part of the ESEA's legacy is a fierce debate over whether the federal government has become overly involved in regulating local school districts' affairs through programs like the ESEA and their control of extensive funding." To your pie chart, do the math. The state projection is for all 50 of 'em. On top of that, a large percentage of those 'state' funds come from the federal government.

Either way, I don't know what you're arguing anymore. The Education system is a nationalized agency now, controlled by the federal government, and its quality has diminished every year since that came to pass. The healthcare system effects everyone in the country, not just the children, and with the state of our educational system and the USPS as examples of the ineptness of vast government control of a system, allowing the federal gov to absorb that industry would be a disaster.

"I can tell you that there was no sarcasm involved in my statement. It was a quite literal description."

Yep, that's why you started it with 'yep'. Whatever.

"We spend twice as much money as other comparable societies do and cover a much smaller percentage of our population in so doing"

Which 'comparable societies' would those be? Canada with a population 1/10th of ours or Great Britain with less than a fifth? Twice as much money doesn't sound so bad if that's what you're comparing to.

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