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USPS Loses $3.3B, Warns of Cash Drain

You guys realize that the USPS makes money every year, right? The reason why it has posted these huge deficits each year is due to a 2006 congressional decision to have them pre-pay into a fund for retirement benefits.

No other company in the world has this requirement. It's not that the USPS doesn't have a lot of problems going forward, but their losses are largely caused by a unique set of circumstances.

EDIT: Sorry, they actually lost money in the middle of the recession. Generally though, they would have been quite profitable in recent years without this requirement.
 
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How about Fed Ex and UPS stop using the post office to subsidize their supposedly more efficient business models. (most here probably don't know about that one).
http://www.mindfully.org/Industry/2003/UPS-Through-USPS6nov03.htm

Stop delivery on Saturdays, leave actual post offices open for those that have a need.

Weed out the top heavy management that has all their buddy's promoting each other while creating positions for each other to justify their jobs.

Make managers (postmasters) do their jobs instead of having some part time peon clerk run the offices and do the daily reports for them in exchange for hours or other perks, or else why pay for a manager.

Let the post office actually make a profit and act like a bank as in other countries instead of raiding them for the general fund.

etc., etc., etc.
 
Atreus21 said:
Why don't we just allow private companies to deliver mail?
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We could, but they would encounter many of the same problems. (ie: having to guarantee mail delivery everywhere)

Again, the USPS generally runs an operational profit. Its recent money woes are heavily based on an unprecedented 2006 congressional act that required them to pre-pay 75 years worth of health and retirement benefits in only 10 years.
 
I think the USPS does an absolutely f'n fantastic job. Its a shame that any govt institution that runs a profit gets raided to pay for stupid shit.
 
modestninja said:
IIRC, the Post Master General said it would save something like 3 Billion a year. Others have said it would be less (something like 1-2 Billion).
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With that information in hand wouldn't it be prudent to temporarily drop Saturday delivery till which time demand warrants its reintroduction.
 
manimal said:
With that information in hand wouldn't it be prudent to temporarily drop Saturday delivery till which time demand warrants its reintroduction.
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My understanding is that this isn't something that can just be dropped or picked back up at any time. It would take a year or two to implement it and to start realizing the savings. That being said, the PMG has been asking for this since 2009 and a lot of other countries dropped Saturday delivery a long time ago without any major issues.

Also, it requires an act of congress to be approved, so good luck with that...
 
Atreus21 said:
Why don't we just allow private companies to deliver mail?
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Because it is one of the few functions explicitly assigned to the government by the US Constitution.

Pick one of the thousands of other functions to eliminate, and make the government do one of the few jobs it is supposed to.
 
A private institution could be incentivized to deliver to people who decide to live in the middle of nowhere.

Anyway, saturday delivery is stupid and it will be gone fairly soon IMO.
 
eskimospy said:
We could, but they would encounter many of the same problems. (ie: having to guarantee mail delivery everywhere)

Again, the USPS generally runs an operational profit. Its recent money woes are heavily based on an unprecedented 2006 congressional act that required them to pre-pay 75 years worth of health and retirement benefits in only 10 years.
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This legislation was pretty much a poison pill... the people who passed it hate unions.
 
Mail volume has been dropping precipitously since 2001, so clearly some cutbacks need to be made. It dropped about 2% between 2010 and 2011, and has dropped to 1987 volume levels. Maybe the workforce should be cut back to 1987 numbers?
 
Cut mail deliveries down to 3 days a week for all I care. Only get a bunch of bullshit from the USPS anyway.
 
Atreus21 said:
Why don't we just allow private companies to deliver mail?
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As others have noted, the USPS is mandated by the government to deliver mail. People are right... little incentive for private companies to deliver a $.45 piece of mail to an address 20 miles from bumfuk, WV.

The problem is in part to the union pay and benefit scale of postal employees. Add to that the USPS decided to compete with Fedex and UPS in the overnight parcel delivery service. This means the USPS had to build and maintain a lot more sorting centers with little incentive to operate those in a profitable manner. So now we have the USPS using taxpayer funds for operating capital. I know people will chime in and say the USPS receives no taxpayers funds... but they have been operating in the red and getting loans from the U.S. treasury. They are reaching their loan limits and I doubt the U.S. taxpayer will every see that money back in the coffers of the treasury.
 
Isn't it funny that all of our issues seem to be that 'people' make too much money...what a world...what a world...
 
PeshakJang said:
Because it is one of the few functions explicitly assigned to the government by the US Constitution.

Pick one of the thousands of other functions to eliminate, and make the government do one of the few jobs it is supposed to.
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The constitution gives Congress the power to establish post offices. Who says that Fedex and/or UPS couldn't be delegated this task? All Congress has to do is pass a law saying so. Nothing says that the government has to complete this task, just that congress has the power to establish who does it.
 
eskimospy said:
Its recent money woes are heavily based on an unprecedented 2006 congressional act that required them to pre-pay 75 years worth of health and retirement benefits in only 10 years.
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This is complete misinformation perpetuated by people who don't understand accounting. They aren't prepaying the future retirement benefits. They need to have retirement fund equal to the PRESENT value of future payments to retirees. In other words, the future payments are discounted back by the expected rate of the return of the retirement plan. This is how every single defined benefit retirement plan in the country works. I don't know if 75 years is typical or not but once you go beyond the 30 years the extra years hardly add much to the present value anyway. Since the post office expects to operate in perpetuity it makes sense that have fund to allow for that. If the post office was allowed to under fund it's pension program it could end up putting taxpayers on the hook later on.
 
the DRIZZLE said:
This is complete misinformation perpetuated by people who don't understand accounting. They aren't prepaying the future retirement benefits. They need to have retirement fund equal to the PRESENT value of future payments to retirees. In other words, the future payments are discounted back by the expected rate of the return of the retirement plan. This is how every single defined benefit retirement plan in the country works. I don't know if 75 years is typical or not but once you go beyond the 30 years the extra years hardly add much to the present value anyway. Since the post office expects to operate in perpetuity it makes sense that have fund to allow for that. If the post office was allowed to under fund it's pension program it could end up putting taxpayers on the hook later on.
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It's not misinformation at all, it's 100% factual, and it has nothing to do with understanding accounting. It's not the objection to the pension fund at all, it is that they are being forced to provide 75 years worth of payments in 10 years. That's a recipe for disaster. Proponents of such a thing are people who don't understand how public policy works.
 
xBiffx said:
The constitution gives Congress the power to establish post offices. Who says that Fedex and/or UPS couldn't be delegated this task? All Congress has to do is pass a law saying so. Nothing says that the government has to complete this task, just that congress has the power to establish who does it.
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hhmmmm...I wonder what might happen to a politician that votes to dissolve the post office? not a reality biff...
 
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