PS - The Post Office Is Sinking

The United States Postal Service wants a complete makeover. It’s just not “financially viable.” In one way, our postal services have been outsourced to the Internet. At least that is the main reason cited for the serious budget problems. On the verge of bankruptcy, snail mail will inch even slower.

But there are more reasons it currently holds a debt of $15 billion, plus $5.5 billion which they are scrambling to pay to the U.S. Treasury for retirement health benefits. Extreme measures are urgently awaiting to keep from plummeting deeper into a sea of red.

Internet services have been around for awhile and it is true that a greater percentage of people are beginning to use email and e-billing options. Postmaster Patrick Donahoe estimated 50 percent of people were going the paperless route — wait, only half of America? That still leaves . . . the other half.

Out of its entire lengthy existence, USPS saw its highest volume in 2006, 2005, and 2007 respectively and people were glued to their computers then. Plus, Internet giants like eBay, Amazon, and more have added significantly to mail volume. Then Netflix blossomed, which adds a not too shabby $600 million to the Postal coffers each year, sending about a million DVDs each day. So what gives?

The Postal Service has been declining for the last five years and, at that time, Congress passed the Postal Accountability Enhancement Act that forced the Postal Service to pay retiree health benefits upfront for the next 75 years. Yes, even benefits for all the unborn postal carriers who will probably never carry that blue messenger bag. And they only have a 10-year window, so every September 30th they must give $5.5 billion to the Treasury.

Meanwhile, they have overpaid into the worker pension funds (separate from the health benefits) between an estimated $50-75 billion. So in order to handle this head-scratcher, new legislation, of course, has been proposed. From Truth-out.org:

H.R. 1351, the United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011, is a piece of legislation sponsored by Massachusetts Congressman Stephen Lynch. The act calls for the Office of Personal Management to do the definitive audit, come up with the actual figure of overpayment and then apply that to the ridiculous system of prepayment funding expenses. The Postal Service would then have that $5.5 billion a year to use for running its services and improving mail delivery.

If this is truly the case, then some better accounting (which wouldn’t include tax dollars) sounds like a plan. Instead, Donahoe is calling for Congress to approve drastic cuts to regain profits by 2015. Nearly 100,000 postal jobs have been cut over the last four years; 30,000 within the past year. Twenty billion dollars must be cut by then to achieve that, and outside experts say it won’t work.

Congress is expected to make an announcement within two weeks about approval. The public and the Postal Regulatory Commission can comment on the proposal, but it may not influence the decision.

Proposed changes for spring 2012:

First class mail stamps will increase one cent to $0.45 (Jan 22)
Next day mail to surrounding areas would lag
Saturday mail eliminated
120,000 jobs cut
Health benefits & other labor costs reduced
Wants to close about half of its 487 bigger mail processing centers
That would allow the elimination of overnight service
3,700 mail facilities on the chopping block (including Benjamin Franklin’s original post)

Effects:

Definitely expect First Class mail delays, especially in remote areas
Express mail remains unchanged
Netflix DVDs will arrive later
Some magazines will face new delays, between 2 and 9 days
Checks might not make the creditors in time, without proper planning
Prescription drugs would be delayed
Could significantly affect newspaper subscriptions, especially in rural areas
Not everyone has/wants Internet or lives near a P.O.
Small businesses, elderly, disabled, and poor depend on local P.O.s
Many depend on next day, time sensitive documents
Might have to opt for more expensive delivery methods

Other factors that attributed to this sinkhole were gas prices and inflation. Eighty percent of the Postal Service’s expenses go toward labor; approximately 30-60% more than FedEx and UPS. America’s ongoing Depression halted a lot of business operations which use the mail system.

Any way you look at it, when the government runs an entity, legislates it, and makes unreasonable demands, it usually goes bankrupt (just like our country), running hundreds of thousands out of jobs. Although self-funded, the Postal Service is apart of the government too. It’s as though they both steer right for that iceberg!

Would an influx of people stuffing their boxes with handwritten sentiments keep the postal service alive? Will this debacle ever be solved, or will we have to keep “adjusting” and move everything online or pay more for other delivery services? Netflix has been pushing its subscribers online for some time. And people will adjust; they will avoid the inconvenient mail system which will then decline the use of the P.O. even more.

Austerity, Baby; if we want those essential mail orders, we might just have to bring back the pony express.