The U.S. Postal Service will default on Wednesday unless Congress acts
money.cnn.com
money.cnn.com
Congress passed a law in 2006 (http://www.govtrack.us/congress/bills/109/hr6407 ) insisting that the USPS fully fund its pension liabilities by 2043, beginning in 2007 (see SEC. 802. B of the full text). That amounts to a radical restructuring of the USPS's costs (not that doing so is in principle a bad thing, but the implementation of this law is... onerous to say the least).
This is basically Congress telling the Postal Service how it should allocate its money, and the Postal Service responding by saying "we can't meet the terms that you've unilaterally passed" by not paying the treasury the sum of money necessary to fund future pension liabilities.
This says essentially nothing about the costs of current operations or obligations.
You'd also want to know that "pay as you go" pensions are illegal in the private sector for good reason, so it's not ridiculous for the government to insist that USPS put money in a pension fund.
Any of those three could be drastically relaxed without compromising the core value of the USPS in modern US life.
But the biggest problem is the post offices. There are so many of them!
And while I agree that pay-as-you-go pensions aren't a good idea in this instance, the law requires the post office to pre-fund the pension system for like 75 years. So a lot of these costs are for the pensions for future letter carriers who haven't been born yet. There's a lot of room to build up a fund in a way that doesn't lead to these sorts of short-term losses.
http://www.theatlantic.com/business/archive/2011/12/who-kill...
"This past fiscal year, it lost a mere $5.1 billion. In 2012, it's facing a record $14.1 billion shortfall and possible bankruptcy. In order to turn a profit, Postmaster General Patrick Donahoe says the agency needs to cut $20 billion from its annual budget by 2015. That's almost a third of its yearly costs. ... In 2006, Congress passed a new law requiring the agency to pay about $5.5 billion a year into a trust fund for future retiree health benefits."
Either way, more privatization would cut the losses without causing much harm. For instance, if we let the USPS decide how much to charge for postage rather than letting congress determine that, they could bring in a lot more money.
On the other hand, privatizing the military raises a number of ethical issues that don't apply for the postal service (as we have seen with Blackwater/Xe/Academi.. can you believe they changed their name again??).
I'm curious also at this point what percentage of employers even provide pensions?
I do find it hilarious that people think putting money in a pension fund is some kind of Republican conspiracy. Aren't Democrats usually the ones who support government pensions?
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You do realize the vast majority of these losses are due to the 2006 act mandating that USPS pre-funds 75 years of retirement benefits over 10 years? The one passed by congress?
Bail out? Congress dumped most of the shit USPS is currently in on the organization.
Not saying they don't have a number of issues, and some of your suggestions are interesting (I'm surprised they are not already implemented really), but USPS's budget crisis is complete bullshit manufactured under the Bush administration.
My post offices care and treat me very well (see my other post). Certainly part of it is that I treat them with respect as well.
Automate it. I can put my package on a scale and enter a couple addresses into a form and pay without ever talking to a person. The machine would cost less than $3,000 and work forever, yet they pay someone $25/hr to stand behind the counter and be LESS productive than that little machine. For that person's salary for a month, you could put one of these little kiosks in a grocery store. Put one in EVERY grocery store.
They have those right now at many USPS locations:https://www.usps.com/business/expanded-access.htm (and Click-and-Ship works like). Heavier packages (even those processed through the kiosk) do need to be handed over to a USPS employee for anti-terrorism reasons (just stating the fact, not expressing agreement with the policy).
Let me schedule your delivery. You need my signature? Okay, I'll be home at 6pm. I work too. Please come at 6pm. Have a part time shift that works 2 hours in the evenings instead of Saturday and you will make 100 Million customers happier. Better yet, deliver on only Mondays and Thursdays for 14 hours. Two shifts of seven. Save time. There's no mail that can't wait a day or two.
This is a great idea, but would be impractical for locations outside of cities.
PS: Also Ford does not need to 100% fund there pension plans they are allowed to have a gap which is currently around 20% or $15.4 billion as of end 2011. http://www.reuters.com/article/2012/05/30/us-ford-pension-id...
The debate, therefore, is really about that: is that still the situation? If not, then just cut it loose - privatize the sector, and do not require anyone to deliver to places like Lonerock, Oregon ( http://en.wikipedia.org/wiki/Lonerock,_Oregon ). If so, the debate becomes how to best provide those services to minimize losses.
However, that debate is clearly a political one, which would mean that it's probably not a suitable article for this site (comes from cnn.com, too, to boot).
Compare this to UPS/FedEx. Generally, there won't be any lines and you can be in and out in less than 3 minutes.
I've shipped something like 3000 packages via USPS priority mail over the last 3 years, and there have been a grand total of two that have gotten lost (and I'm pretty sure that one of those two was a customer ripping me off). That's a much higher success rate than I've gotten with FedEx & UPS, at lower prices.
However I absolutely loathe, beyond description UPS. I wish Amazon used anything but UPS for prime, it ruins the whole experience.
No need to "swear", they've been caught in that exact act several time by people who'd cleared their daily schedule entirely (or taken a home-work day for office drones) to get their package, either catching them trying to leave after having pinned/dropped a notice or plain not saying them the whole day.
And that's beyond their basic "rules" such as a home number not being clearly visible from the truck means you don't exist and fuck you very much.
Canada's low and spread out population has to count for something in this argument.
It's all funded from postage.
This is an often repeated myth that is very mistaken.
You really want UPS doing to daily mail what they do to packages?
The US should remove all the mandates from the Postal Service and all of the subsidies and open up mail delivery for competition from FedEx and UPS.
However, I don't think it's out of the realm of possibility that they will come to the taxpayer looking for a bailout soon.
Every day I clear out my mailbox and 95% of the contents goes directly into the recycle bin. I have tried all the DMA removal forms, various generalized opt outs, etc., but the junk mail keeps coming.
Recently with paperkarma (an IOS app) I've been able to reduce it somewhat, so now junk mail is about 75% of the contents of my mailbox on a bad day.
There is certainly no reason for daily deliveries. I'd be happy with once or twice each week. This would save massively on fuel and labor costs and would not degrade the service significantly since the trucks could still operate between cities every day if necessary.
The USPS and the paper direct mail industry should both have gone away long ago. Alas, it's illegal for any companies to offer standard letter delivery services, so the USPS is also a monopolist, with all the expected bloat and inefficiency.
I believe we need some minimal standard of universal postal service, but I certainly do not believe we need the postal service as it exists today.
PS: This is also why school busing is so much more efficient for everyone but the students who have a long ride.
I hope the Congress does nothing - but then again, I'm one of those who think bailing out the banks was a mistake...
Bailing out the private and wealthy isn't comparable to bailing out a public service that wouldn't even need to be bailed out if Congress hadn't instituted pension funding standards on it that are harsher than the standards they impose on banks doing the same thing.
USPS could be more efficient - they deliver lots of junkmail (that I can't filter out/decline) and they should be running more efficient vehicles and perhaps less frequently.
However, I submit that if the USPS disappeared overnight, the country would have a minor crisis as many private companies (even shipping companies) depend on them.
We need to modernize the USPS, and expand it, not cut it.
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I, for one, as a citizen of one of the most privileged countries in the world, am very happy that the government provides many of the services it does (EPA, FCC, FDA, Medicare, Medicaid, USPS, SEC, GAO, CBO, NOAA, CDC, just to name a few).
These organizations aren't perfect, but that's not an indictment - nothing on this Earth is perfect, and libertarian capitalism is not a solution to any of the worlds problems.
Context and history are important. Pure capitalism has never been, and never will be, unicorns and rainbows as far as the eye can see.
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What?
Their operations are profitable, the financial problems are due to an unreasonable funding policy forced on them by Congress.