The U.S. Postal Service has warned that it will fall $6.8 billion short on payments it owes the federal government this fiscal year. In a presentation to a House of Representatives subcommittee on Wednesday, Postmaster General Patrick Donahoe said the postal service won't be able to pay its retirement and workers' compensation obligations unless the government steps in.

The Postal Service is set to miss its expected September payment of $5.5 billion to fund medical benefits for future retirees, as well as a $1.3 billion payment -- due in November -- for workers' compensation costs, Donahue said.

The service will continue to deliver the mail, but won't have the cash to fund these obligations, he added. The Postal Service last month said that it may close as many as 2,000 post offices this year after an oversight board in September unanimously rejected its request to raise the price of a first-class stamp to 46 cents from 44 cents.

The board said the Postal Service had failed to sufficiently quantify either the effect of the recent recession on operations or how much mail shipments would decline if rates were increased.

Denied the option of raising stamp prices, the Postal Service has requested other allowances, such as reducing the frequency of mail delivery, closing unprofitable post offices and restructuring its $5.5 billion retiree obligation.

In November, the Postal Service posted a fiscal 2010 loss that more than doubled from a year earlier on lower revenue and higher interest costs for debt related to workers' compensation.


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Jason

People wonder why the postal system is going bankrupt?

I reside in Florida--where this package is supposed to be shipped... Here is said package tracking information:

Detailed Results:

Processed through Sort Facility, March 09, 2011, 8:47 am, CATANO, PR 00962
Processed through Sort Facility, March 04, 2011, 8:08 pm, KEARNY, NJ 07099
Electronic Shipping Info Received, March 03, 2011

It shipped from NJ, and was apparently routed through Puerto Rico, which has already put 6 days onto the shipment when I should have had it around the 8th had they routed it properly. This type of incompetence is what will be the death of the US postal service.

March 10 2011 at 9:52 PM Report abuse +1 rate up rate down Reply
Felix

The postal service with it's ever increasing postage cost has driven the move towards paying bills online and electronic correspondence. They have done it to themselves and think that further increases will resolve their financial problems. When in reality further increases will result in increased motivation to pay more and more bills online and more electronic correspondence. Not to mention the increased motivation on the part of businesses to reduce expenses by turning to the internet for providing customers with catalogs rather than higher cost of mailing catalogs. Once I probably mailed out nearly a dozen pieces of mail a month. With the cost of postage today the only mail I physically send are two bills monhthly, which charge additional fees for electronic payments which are higher than the cost of the postage. The consumer is not stupid, we will always turn to the most cost effective means of paying bills and sending mail. If the USPS continues raising prices it will virtually price itself out of existance. The day may come when mail is delivered twice a week at the current rate of postage increase. If the USPS had it's way it would start taxing e-mails to subsidize it's revenue issues which it has created for itself. I bet that would reduce all the junk e-mail we get really fast! Probably cut junk e-mail 99% overnight. Go for it USPS!

March 06 2011 at 9:55 PM Report abuse rate up rate down Reply
fesjbr

Name me a goverment run company that makes a profit or even breaks even.

March 06 2011 at 12:38 PM Report abuse -1 rate up rate down Reply
jchip40

time to revamp the PS, get rid of the waste and mismanagement.

March 06 2011 at 12:01 PM Report abuse -1 rate up rate down Reply
1 reply to jchip40's comment
Jason

That would mean terminating over 50% of the PS staff, primarily everybody from Manager title to the top.

Everybody always wants to start at the bottom and work their way up when in reality, it should be the other way around - typically the people who lead companies into bad situations are managers, not peons.

March 10 2011 at 9:54 PM Report abuse rate up rate down Reply
laddagokid

90% of the workers should be fired.All they do is stand around and talk.Go to the main post office in Lakeland Florida.I am sure it is the same way in other states.Just like all government employees.

March 05 2011 at 8:50 PM Report abuse -1 rate up rate down Reply
Alice

I started working at the post office in 1980 and made $8.10 per hour. In 2004, I was making $22 per hour....that's a "raise" of .56 cents per year!!! I walked 12-15 miles per day, up & down steps, carrying up to 40 lbs. of mail, ruined my back, shoulders, & knees... and carried mail when the wind chill was -40 or the heat index was 120 degrees. My feet and head were about 150 degrees and so was the vehicle (Jeep) that I had to drive. I had a pit bull break through a window to come after me a half a block away. When I became a clerk, I had to listen to people moan & groan when postage went up .01 CENT! You would have thought that it was the end of the world. My retirement is less than my husband's (maximum) Social Security. I pay taxes on my pension and I pay for health & life insurance. Sometimes, I feel that Social Security would have been a better deal. So shut the hell up if you haven't walked a mile in my shoes. You are all so brilliant and have all the answers. I need to vomit.

March 04 2011 at 12:34 PM Report abuse +5 rate up rate down Reply
1 reply to Alice's comment
Jason

On one hand, I feel for you, on the other, I don't. You applied for the job, took the job, and kept the job - those were all YOUR decisions. The fact of the matter is, at $22 per hour, you were making 1.5 times the normal private sector amount for somebody doing similar work, not to mention the benefits that you had in that position. No offense to you as this may not be the case with you, but it should also be remembered that most postal workers aren't required to have anything more than a HS diploma or GED to make that $22 per hour.
Do I feel for you now that I've reminded myself of all of that? Not at all.

March 10 2011 at 9:57 PM Report abuse +1 rate up rate down Reply
sjcdc

Here is a novel idea...when the government orders studies to evaluate these kind of situations, there is a cost. Very expensive I am sure.
So how about a taxpayer oranization set up to evaluate and implement these changes. The tax dollars could fund these groups since we are paying for it any way, and they can be made up by private industry that is accoustomed to trying to run an organization that makes a profit. Not by political bodies that have no clue. At this point there are so many areas that are ASS BACKWARDS that is is beyond scary. Could you imagine a CEO that would be compensated based on his
performance/ savings/efficiency. Not a bad retirement job for a sharp former CEO of a real company.
They would get things done in two years or less rather than the gov. taking ten years and in the end making the situation twice as bad as it started with.

March 03 2011 at 10:02 PM Report abuse rate up rate down Reply
evanrogers

I am sure the governemnt will do much better with health care. sure!

March 03 2011 at 9:23 PM Report abuse +1 rate up rate down Reply
sjcdc

Lick it and stick it...as they say.

March 03 2011 at 9:10 PM Report abuse +1 rate up rate down Reply
sjcdc

By weight, 90% of my mail goes directly into the trash,never looked at.
Less than 5% has any importance to me. Magazines arrive that were never ordered,
and never looked at, but I know the PO uses the income to off set other expenses.
If you have a bussiness it is even worse.
The internet has eaten the USPS lunch and future technology will continue to erode their bussiness plan.
This country could run on a postal delivery schedule of three days a week.
Other services could be used if and when needed.
Reduce the size to WHAT IS NEEDED and restructure...but I ask you...What is the insentive?...That is the problem.
$.44 or $.46 is not the issue unless the system is addressed.
There are many good posts here from the inside workers that exlain areas that would save if modified. Also other ideas that could help.
They have not even tried to reshape the system and I believe that the real issue
IS FUNDING the retirement numbers. If the government pays it, again , I ask, What is the insentive? That's the problem.

March 03 2011 at 9:08 PM Report abuse rate up rate down Reply