U.S. Postal Service on Verge of Bankruptcy

old mailbox in fence

Not unlike the federal government propping it up, the United States Postal Service (USPS) is teetering on the brink of bankruptcy. Postmaster General Patrick Donahoe has warned that unless Congress steps in, the agency may have to shut down by the end of next summer. As the saying went, “Neither snow, nor rain, nor heat, nor gloom of night . . .” could keep letter carriers from delivering the mail. But funding those letter carriers’ retirement—that’s a storm of a different kind. USPS faces a past-due payment of $5.5 billion to fund its retirees’ health plan.

As an independent government agency, the Postal Service does not rely directly on tax dollars to fund its operations. Rather, it makes its revenue from stamps, package delivery, and other services. But its labor costs are huge, and it is limited in certain ways that private businesses are not, when it comes to managing its workforce. Having lost $20 billion in the last five years, and more than $3 billion last quarter alone, USPS is in need of a major overhaul—and a bailout.

The Obama administration and others are proposing ways to help the Postal Service restructure its operations and avoid default. The agency may be forced to cease Saturday mail delivery; terminate more than 200,000 career positions; and close hundreds of smaller post offices. Other proposals include partnering with UPS and FedEx; selling advertising on the sides of mail trucks; and phasing out delivery to front-door mail slots.

The Postal Service’s fundamental problem is the digital revolution, epitomized by e-mail. As Postmaster Donahoe put it: “Instead of buying stamps, many consumers pay bills online, send ‘e-vites’ to friends and family, and simply press ‘Send’ when they want to communicate.” Traditional first-class mail simply cannot compete with the ease and low cost of Internet communication.

Image credit: © SuperStock RF/SuperStock    

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13 Comments

  1. ato says:

    can the streets of milwaukee rase the money so postal service can proseed with the mail delivery

  2. prescilla says:

    no dont do this i want my check lol

  3. casie says:

    shut up ato
    :( :) :D

  4. alliah says:

    oh well they should have had more money …stupid president cuz he didnt give them money 2 recover.

  5. alliah says:

    p.s. good comment ato

  6. PHOENIX GOMEZ says:

    OWW THAT SUCKS

  7. becca says:

    where is the author of this article???????

  8. ALEX says:

    who is the author i cant find it!!!!! i need it for a report!

  9. kate says:

    who is the author!!!!!!!!!!!!

  10. FUotorious p5 says:

    Woww Thuiss Redicliouss Ihh Neverr Thankk Thatt Theyy Woukldd Goo BankkRupcyy !

  11. DALE says:

    TO SURVIVE THE USPS MUST RESTRUCTURE; NO MORE CARRIERS
    EVERYONE PICKS UP THEIR MALE AT CENTRAL POINT(LETTERS AND PACKAGES)IF THEY DO NOT DO THIS
    UPS AND FED-EX ARE POISED TO TAKE OVER AND THEY WILL OPERATE
    WITHOUT UNION AND DELIVERY PEOPLE.

  12. David says:

    Fedex and UPS at this point cannot compete for mail service but can on parcels, etc. Congress needs to get out of their constant interferance with USPS. USPS need not lose money. They need to wack Saturday deliveries, get rid of thousands of wasted, overbloated management jobs, close non essential terminals and facilities, stop being forced to fund a pension fund that no one can afford to fund, stop giving Congress five billion dollars a year and a few more absolutely wasteful things that they now to have to do. Firing postal workers will not solve the problem as the problems are systemic within all of USPS.

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