Struggling Postal Service Takes Debt Woes to Capitol Hill

Postmaster General Patrick Donahoe warned that the Postal Service is on "the brink of default" as he battles to keep his agency solvent. Without legislation by Sept. 30, the agency "will default on a mandated $5.5 billion payment to the Treasury," Donahoe told the Senate Homeland Security and Governmental Affairs Committee on Tuesday.

And with no congressional action, a year from now, next August or September, the post office could run out of money to pay salaries and contractors, hampering its ability to operate, Donahoe said.

"We do not want taxpayer money," Donahoe said, "We have got to get our finances in order."

Committee Chairman Joe Lieberman, I-Conn., said: "We must act quickly. The U.S. Postal Service is not an 18th century relic, it is a 21st century national asset, but times are changing rapidly now and so too must the post office."

Sen. Susan Collins, R-Maine, noted that the post office supports a $1.1 trillion mailing industry employing more than 8 million people in direct mail, periodicals, catalogs, financial services and other businesses.

Sen. Tom Carper, D-Del., noted several proposals have been put forward to improve postal operations and said that Congress needs to work on areas where agreement can be found. Both Carper and Collins have introduced bills to reform postal operations, and measures have also been introduced in the House.

Donahoe and his predecessor John Potter have warned for months that without changes in the law governing postal operations the Postal Service will be unable to make advance payments to cover future retiree medical benefits.

Staggered by the economic downturn and the massive shift from first-class mail to email, the post office lost more than $8 billion last year and is facing losses at least that large this year, despite having cut 110,000 jobs over the last four years and making other changes, including closing smaller, local post offices.

The Postal Service, which does not receive tax money for its operations, is not seeking federal funds.

Instead, postal officials want changes in the way they operate, including relief from the requirement that it prefund medical costs. No other federal agency has to prefund retiree health benefits, but because of the way the federal budget is organized the money counts as income to the government, so eliminating it would make the federal deficit appear larger.

Also, the post office wants to reduce mail delivery to five days-a-week; close 3,700 offices; further cut workforce by up to 220,000; to withdraw from federal retire systems and set up its own and it seeks the return of $6.9 billion overpaid into retirement funds.

Contracts with its employee unions currently strictly limit layoffs and closing post offices riles local communities who complain to their members of Congress.

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Kapil

The situation in US has worsen so much that basic utility like Post office services are on verge of shutdown. Quick action should be taken by administration otherwise already existing Unemployment problem will worsen more and will lead to more spending by US Govt.
I follow the predictions of http://www.forecastfortomorrow.com/ for investment. They are very accurate in all the predictions

September 10 2011 at 11:36 AM Report abuse rate up rate down Reply
qwertymate

Post services have always had financial problems. In my opinion, government doesn't pay enough attention to postal services. And that's too bad as post doesn't do its job perfectly. Many people are not satisfied with postal services (http://www.pissedconsumer.com/consumer-reviews/usps.html) they get. I think it's time to start providing high quality services.

September 10 2011 at 8:35 AM Report abuse rate up rate down Reply
carla

you guys are all misinformed as ususal. That is why this country is in the mess it is. You listen to the media and think it is fact. Check out the facts for yourself. Go to the Gov websites read the docs. Find out what is really going on. No bail out. More gov. control lying to the general public about what is going on. postal service has overpaid billions of dollars into a FUTURE retiree healthcare account as madated by the gov. BILLIONS otherwise USPS would be making a profit. This money goes in the general fund just like your SS "contributions" . Was not supposed to be that way. Now SS may run out of money. Same thing. They want the money in there for control and to make the deficit look better. GET THE FACTS!!!!!!!!!!! Gee WHIZ you people have got to get your head out of dancing with the stars and all these stupid reality shows. You will be gettin enough of "reality " soon enough. Better be prepared for it

September 07 2011 at 7:39 PM Report abuse rate up rate down Reply
successnvabeach

Thank you rogermeter!!! It does not take a rocket scientist to figure out why the financial problems of the US Postal Service continue to worsen. It basically boils down to poor management, poor work ethic, and poor attitude!!! Who in their right mind would really want to visit a Post Office unless absolutely necessary and required to??? Last Christmas I had to go to a local Post Office to mail a gift. While there for an unacceptable period of time I could not help but notice that the staff moved at a snails pace and almost to the degree of portraying a cocky attitude. When I finally got to the counter I asked the attendant why they did not try and move faster to prevent customer frustration? He replied "Because We Do Not Have To". GO FIGURE??? Great benefits, overpaid, underworked, and a government entity!!! It disgust me that they are at a stage of default and crying to our government. If they would get the lead out of their ass and be thankful to have jobs we would not have this disgusting mess!!!

September 07 2011 at 10:10 AM Report abuse rate up rate down Reply
rogerneter

The Employees at the counters need to be more friendly oriented. They make you feel like it's a chore to wait on you. Also, I was in a Post Office in Fl the other year and there were 20 people in line and only 1 employee working. The other one was closing out. They said it was time for them to go home. Also the Post Master came out and just looked around and didn't do a thing about the line. Been in a Post Office in Maryland where the Post Master was out in the lobby with a blue tooth in her ear. Very unprofessional Then they wonder why people are going other places to do their business (mailing and etc)

September 07 2011 at 9:26 AM Report abuse rate up rate down Reply
dusar

Post Office has too many non- productive employees, plus they can NOT fire any of them.

Give UPS the task, you will see results!!!

September 06 2011 at 10:01 PM Report abuse rate up rate down Reply
kastmaster2105

Paybacks a BITCH isn't it!!

September 06 2011 at 9:36 PM Report abuse rate up rate down Reply
Johnny

To many overpaid workers. If mail volume dropped by over 50% in the last decade they should have laid off half the workers.

September 06 2011 at 9:08 PM Report abuse +1 rate up rate down Reply
dabrownman

The post office only needs 2 people. One to be in charge and go home sick every day at 10 AM and one to do the work but calls in sick every day. Bit will retire with full benefits at 40 an make 100 grand a year before and after retirement. We just saved 400 billion dollars or more a year. Good for us for a change,

In future weeks we will talk about. whole government departments like Energy, Commerce. The Ain't t No Justice Justice Department, Education, Interior, Labor adn Welfare and the ever popular touchy feely Homeland Security. EPA, NLRB, National Parks, Indian Affairs, SEC The Fed and its 20,000 employees, TSA and FAA will not go unnoticed, Trillions in yearly expense to be uncovered, eliminated and vanquished to be tossed on the huge Marxist posing as a Socialist, liberal, progressive democrat bad idea, worse in practice, trash heap of history,

Stay tunes Evan's belly button is puckering and puckering 100 times a second just thinking about gay cheese and smoky gray, sea salt that smells like charred, gerbil testicles.

September 06 2011 at 7:44 PM Report abuse rate up rate down Reply
crimeslawyer

A union bankrupts another company.

September 06 2011 at 7:04 PM Report abuse +1 rate up rate down Reply
2 replies to crimeslawyer's comment
dabrownman

Is there one they haven't bankrupted in some horrible way that children shouldn't watch? I'm still thinking.

Here is a Hint.I f you have a union working for you or with you, you will be bankrupted financially and spiritually sooner rater than later. n It is best to get rid of them as soon as possible if you don't have death wish - but if you do, hire some mor. It is the fastest way to die outside of hiring a union to kill you outright.

September 06 2011 at 9:50 PM Report abuse rate up rate down Reply
dabrownman

Is there one they haven't bankrupted in some horrible way that children shouldn't watch? I'm still thinking.

Here is a Hint.I f you have a union working for you or with you, you will be bankrupted financially and spiritually sooner rater than later. n It is best to get rid of them as soon as possible if you don't have death wish - but if you do, hire some mor. It is the fastest way to die outside of hiring a union to kill you outright.

September 06 2011 at 9:50 PM Report abuse rate up rate down Reply