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View Full Version : Postal Services loses $8.5 billion in 2010 - may go broke by 2011




Nate-ForLiberty
11-12-2010, 08:47 PM
(AP) The Postal Service said Friday it lost $8.5 billion last year despite deep cuts of more than 100,000 jobs and other reductions in recent years.

The post office had estimated it would lose $6 billion to $7 billion, but a sharp decline in mail took a toll. Increased use of the Internet and the recession, which cut advertising and other business mail, meant less money for the agency.

For the year that ended Sept. 30, the post office had income of $67.1 billion, down $1 billion from the previous year. Expenses totaled $70 billion, a decline of about $400 million. The post office also was required to make a $5.5 billion payment for future retiree health benefits.

“Over the last two years, the Postal Service realized more than $9 billion in cost savings, primarily by eliminating about 105,000 full-time equivalent positions - more than any other organization, anywhere,” chief financial officer Joe Corbett said in a statement. “We will continue our relentless efforts to innovate and improve efficiency. However, the need for changes to legislation, regulations and labor contracts has never been more obvious.”

The post office is currently in contract negotiations with two of its unions, with two more scheduled to be negotiated next year.

The loss of $8.5 billion in 2010 was $4.7 billion more than the previous year.

Mail volume totaled 170.6 billion pieces, compared with 176.7 billion in 2009, a decline of 3.5 percent. At the same time, volume was declining the post office was required to begin service to thousands of new addresses to accommodate population growth and new businesses.

The post office has asked Congress for permission to reduce mail delivery to five-days-a-week and to eliminate annual payments for future retiree health benefits.

Sen. Tom Carper, D-Del., blamed the loss on the recession and “operating restraints placed on postal management.” The result, he said, may represent the most serious threat to the post office in its 200-year history.

“If corrective action is not taken quickly, the Postal Service will likely run out of cash and borrowing authority by this time next year, placing its ability to continue operations in serious jeopardy,” said Carper, who urged quick congressional action.

Fredric V. Rolando, president of the National Association of Letter Carriers, said the loss “comes as no surprise.”

“For the Postal Service to improve its financial situation, the government must let the USPS manage its financial affairs in the most effective manner possible, like any other business,” he said. “Essential to that process would be for Congress to fix an onerous congressional mandate from 2006, which obligates the Postal Service to make annual payments of $5.5 billion to pre-fund future retiree health benefits. No other institution in America, public or private, has to do this.”

A request from the agency for a 2-cent increase in postage rates to take effect next year was recently turned down by the independent Postal Rate Commission. The post office has appealed that decision in federal court.

While the post office does not receive tax money for its operations it still must answer to Congress, which has been reluctant to agree to closing of local post offices and centers.

Some have suggested privatizing the service, but the requirement to provide service everywhere in the country at the same price is not likely to be attractive to private companies.

Of particular concern has been the decline in the lucrative first-class mail, largely consisting of personal letters and cards, bills and payments and similar items. First-class mail volume fell 6.6 percent in 2010, 8.6 percent in 2009, and 4.8 percent in 2008. Traditionally, this mail has produced more than half of total revenue.

Volume for standard mail - advertising and similar business items - improved somewhat, indicating some signs of economic recovery, but generates less income.


http://www.cbsnews.com/stories/2010/11/12/politics/main7048546.shtml

oyarde
11-12-2010, 08:51 PM
This never ceases to amaze me . I honestly do not see how you could not run the post office without losses . Pretty sure I could do it .

TCE
11-12-2010, 08:52 PM
As Ron Paul says, legalize competition. I would also add legislating that the post office must make a profit. We would probably see stamps jump $0.25 of so and more cuts. Does the post office really not use tax money? How does it borrow?

Austrian Econ Disciple
11-12-2010, 08:59 PM
Lysander Spooner arise. Arise Lysander. Arise. Arise. Crush. Rawr.

YouTube - Arise Chicken (http://www.youtube.com/watch?v=zZ9dtZ8lYww)

Sentient Void
11-12-2010, 09:10 PM
bwaaahahahah. Good riddens.

PreDeadMan
11-12-2010, 09:29 PM
YEAH!!! these government services need to go broke then go away FOREVER!!!! FOREVER!! squince help me out here

YouTube - Forever (http://www.youtube.com/watch?v=H-Q7b-vHY3Q)

cindy25
11-12-2010, 09:50 PM
the post office in end of life, and even private companies could no longer be profitable. I expect to see delivery once a week by the end of the decade.

its no different than public pay phones.

free1
11-13-2010, 03:11 PM
The government is doing so well with this I think they should run everyone's health care.

I would even go so far as to say that they should also run all the grocery stores and provide everyone with a basic hybrid econo box car, like a low end Hyundai or something so everyone can have the right to go get their free government food and toilet paper.

They should also run housing and not permit those damn "rich" people from owning a bigger house than me.

(sarcasm now turned off)

lester1/2jr
11-13-2010, 04:58 PM
Netflix should take over the postal system, then again even they are trying to phase dvds out!

Theres no hope for it.

MRoCkEd
11-13-2010, 05:01 PM
Priiiiivatiiiiize iiiiiiit

Cap
11-13-2010, 05:15 PM
http://postalemployeenetwork.com/news/2010/03/usps-overcharged-for-the-csrs-pension-fund-by-75-billion/

*snip* A study just released by the U.S. Postal Service’s Office of Inspector General (OIG) shows that the current system of funding the Postal Service’s Civil Service Retirement System pension responsibility is inequitable and has resulted in the Postal Service overpaying $75 billion to the pension fund. The OIG estimates that if the overcharge was used to prepay the Postal Service’s health benefits fund, it would fully meet all of the Postal Service’s accrued retiree health care liabilities and eliminate the need for the required annual payments of more than $5 billion. *snip*

*snip* Fixing the split by using a more equitable years-of-service approach would leave the Postal Service with $75 billion more in assets as of the end of 2009. The CSRS pension fund is currently underfunded by $10 billion, so the resulting pension surplus would equal $65 billion. *snip*

Obviously you guys don't know the whole story. It seems the USPS has been over charged to the tune of 75 Billion in their CSRS and 6 Billion in their FERS retirement fund. This is the reason they are not running a surplus.
http://www.federaltimes.com/article/20100824/DEPARTMENTS02/8240301/1026/DEPARTMENTS02

VBRonPaulFan
11-13-2010, 05:35 PM
also, technically the USPS isn't a government agency, it's a non-profit organization. it doesn't get any taxpayer funds to run itself, it gets all of its revenue directly from postage. it's basically run the way i think any government agency should be run. people pay when they use it, it doesn't get funding directly from the government and needs to be self sufficient. it is forced to operate like a private company. the only gov. perk i know of that they really get is being able to borrow directly from the treasury.

MyLibertyStuff
11-13-2010, 05:41 PM
Wowwwww they are REALLY losing money fast. That is an impressive pace to lose money at...truly impressive

Cap
11-13-2010, 06:09 PM
Wowwwww they are REALLY losing money fast. That is an impressive pace to lose money at...truly impressive

Did you even bother to read the article I posted?