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.
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- Obama’s Postal Service Plan Would Cut Saturday Mail
Review the state of the Postal Service and the Obama administration’s plan to overhaul it.
(Source: Reuters, September 19, 2011)
- The Fight to Save the U.S. Postal Service
An overview of the difficulties facing USPS; hear the audio of the story.
(Source: NPR, October 1, 2011)
- Ideas for Saving USPS from Bankruptcy
Check out this consumer-friendly blogger’s look at USPS’s dilemma; includes links to related articles.
(Source: The Consumerist, September 6, 2011)
- Postmaster General Warns Congress about Default, Possible Insolvency
This article reviews the testimony of the postmaster general to Congress about the problems facing the Postal Service.
(Source: CNN, September 6, 2011)
- GAO: Congress Must Act Fast to Stave Off USPS Bankruptcy
This Web site highlights additional congressional testimony by a spokesperson for the Government Accountability Office before the Senate Committee on Homeland Security and Governmental Affairs.
(Source: Federal News Radio, September 12, 2011)