On Feb. 13, U.S. Postmaster General Patrick Donahoe told a panel of skeptical U.S. Senators that he ordered an end to Saturday mail delivery because, "It is clear that the Postal Service cannot continue along our current path." How rocky is that path?
"At one point in October 2012, the Postal Service had less than four days' worth of cash on hand to fund operations," Postmaster Donahoe told the Senate Committee on Homeland Security and Governmental Affairs in his written testimony.
Again asking lawmakers to save the Postal Service by passing comprehensive postal reform legislation, but taking "no action that would prohibit" his five-day delivery plan announced on Feb. 6, Donahoe continued to tell the Senators just how bad things had gotten.
The Postal Service lost $15.9 billion last year. The Postal Service was forced to default on its $11.1 billion retiree health plan pre-funding debt to the Treasury. And perhaps scariest of all, "We are losing $25 million a day," said the Postmaster General.
As with any other business losing $25 million a day, "Our existing business model is unsustainable," said Donahoe, "and projections show continued and increased losses into the future -- unless a comprehensive set of changes is made."
According to Postmaster Donahoe, those comprehensive changes are necessary for the Postal Service to realize the $20 billion in cost reductions and new revenue it must generate by 2016 in order to return to financial stability.
Still topping Donahoe's "wish list" of changes is legislation allowing the Postal Service to pull its employees out of the Federal Employees Health Benefits Program and sponsor its own health plan. According to Donahoe, this change alone would save the Postal Service more than $1 billion in reduced premiums in its first year.
Also See: GAO Says USPS Should Continue to Prepay Retiree Fund
"A Postal Service sponsored health care plan is critical, because it resolves the root cause of soaring healthcare costs -- the issue of liability," said Donahoe. "Without addressing the liability issue in a responsible way, the Postal Service will be unable to sustain the current approach to providing health benefits to retirees."
Well aware that some lawmakers, including committee chairman Sen. Thomas Carper (D-Delaware), had expressed disappointment with his unilateral directive to end Saturday mail delivery, Donahoe stressed that the reduced delivery schedule was just one scene in the big picture of saving the Postal Service.
"Although discussion about our delivery schedule gets a lot of attention, it is just one important part of a larger strategy to close our budgetary gap," stated Donahoe. "It accounts for $2 billion in cost reductions while we are seeking to fill a $20 billion budget gap."
"We would urge Congress to eliminate any impediments to our new delivery schedule," he told the committee.
In 2011, the Postal Regulatory Commission issued an advisory opinion finding that he Postal Service had overestimated the cost savings of ending Saturday mail delivery, and had failed to properly evaluate the impact of the move on rural Americans.
However, on Feb. 14, the Postal Service issued the results of an independent survey showing that 81% of urban Americans and 76% of rural Americans supported a 5-day mail delivery schedule as way for the Postal Service to save money.
"These survey results illustrate the strong public support for our new delivery schedule in communities across the country," said Postmaster General Donahoe in a press release. "The American public understands the financial challenges of the Postal Service and supports this new delivery schedule as a prudent, responsible and reasonable approach to address our urgent financial situation."
Also See:
Postal Service Keeps On Bleeding Green
Postal Service Told to Speed Up the Cost-Cutting
Comments
GONGRESS ( 40% ) USPS ( 60% ) HOW MANY TIMES DO I HAVE TO SAY IT, IT’S AS SIMPLE AS THAT,WAKE UP !!!!!!!!!!!!!!!!!!!!
The postal service raises stamps almost semi annualy, they are ineffi9cent and as I.B.M. did it must stop paying healthcare for retirees. . I worked for 32 years and now 100%disabled, i have to buy a second ins. plan on a limited income. The postal service has bled money for years, it always begs for billions, this nation no longer has the wealth to subsidize them. If they can,t make money the mail should privateize.
The salerys thewy attain to drop off an envelope is ludicrise, their retirement package and payroll costs the taxpayer billions upon billions every year. When was the post office a money maker for the GOVT. not sence the net sends e mail, it is antiquated in todays society, look at u.p-.s. where i worked for a few years ,the top in efficency i’m sure they would be glad to take on this business without cost to tax payers. i am sorry to be saying this but the days of paper mail is doomed to failure.. I do thank them for all their hard work its not the employees, its the year 2013 not 1950. I,ll be sorry to see them go.
I think there is still a place for the US Postal Service. Just like the American auto industry, they had to make adjustments. If mail wasn’t so important, my mail box would have a little less inside it.
The problem here is the pay and benefits of Federal workers. I know someone who was a mailman for less than two years, he so called hurt his back and is on permanent disability now. He is making his full paycheck along with his benefits.
He’s like a Congress man, work very little and get benefits for life. Except he does get his paycheck along with the benefits. Not bad for working a few years. I was forced into medical retirement and would be making zero bucks if I hadn’t of bought a private insurance policy.
I still have to relie on SS for medical, but they don’t pay a lot. I put over thirty years into working for my beneifts, I don;t get much but it helps. Would of loved to had been a letter carrier though, I could of retired about twenty years ago, with benefits. If the government could get the lettercarriers to pay for their own health care and reduce other cost’s, it’s doable.
The big problem is the Federal governmnet, they have no idea on doing anything cheap. I mean, to have a study to see how a frog sleeps for a few million, come on. Our government needs to learn that you don’t just throw money at everything. They don’t have a budget in the Senate, but we couldn’t live day to day without budgeting They have no concern how our tax dollars are spent, as long as they are spent.
I don’t care what party you belong to, out represenatives need to start representing us, and not themselves. I say next election, if they are running for re-election, vote for the other guy.