The USPS took a $329 million loss this quarter and warns that it might default on some financial obligations later this year:
The USPS, a self-supporting government agency that receives no tax dollars, said it suffered a loss of $329 million in the first quarter of federal fiscal year 2011. That compared with a loss of $297 million a year earlier.
Declining mail volume is partially to blame, but the real culprit, of course, is pension costs:
Excluding costs related to retiree benefits and adjustments to workers’ compensation liability, the Postal Service said it had net income was $226 million in the first quarter, which ended Dec. 31.
Despite ongoing cost-cutting efforts, the USPS said it expects to have a cash shortfall this year and to hit its federally mandated borrowing limit by September, when the government’s fiscal year ends.
The agency said it will be forced to default on some of its financial obligations this year unless Congress changes a 2006 law requiring it to pay between $5.4 and $5.8 billion into its prepaid retiree health benefits each year.
More here.
Would the last one out of the Postal Service turn off the law banning the private sector from delivering 1st class mail?
Reply to this commentLinkReport AbuseObama claimed Obamacare would work because of the success of the USPS.
Reply to this commentLinkReport AbuseMaybe checks from the USPS to its suppliers will start getting lost in the mail.
Reply to this commentLinkReport AbusePut up or shut up time for the 'no more bailouts' GOP.
Reply to this commentLinkReport AbuseUnlike almost everything else, the Post Office has a constitutional basis and Congress is responsible for bailing them out. Then fix the toxic pension situation.
Reply to this commentLinkReport AbuseI don't know what percentage of the total UPS budget Saturday deliveries constitute but ending this useless activity should save a quick 10%, no?
Does anyone, anywhere NEED mail on a Saturday? Did anyone EVER need mail on a Saturday?
Simple, quick, cut. No one but workers doing an utterly WORTHLESS activity will be affected.
Reply to this commentLinkReport AbuseExtremely similar situation to GM...
Just as in the period prior to GM's fall, where the company had effectively stopped being a competitive auto manufacturer and had simply become a healthcare company responsible for its network of primarily union retirees, the USPS now indicates it not only would have been been profitable but over $500M more profitable but for the effects of supporting its primarily union retirees.
Obviously assisting employees in achieving their retirement goals is a valid and appropriate component of overall compensation and the competition for talent, but these examples have laid bare the unreasonable and debilitating nature of these union contracts. And in these two examples, these contracts have/will have the ultimate effect of killing the golden goose. Unfortunately, those complicit will not bear the cost as the taxpayers already have/soon will be expected to fill the gap.
Reply to this commentLinkReport AbuseI kick myself often for not joining the USPS or a township or county maintainence crew when I had the chance at 19 years old. I'd be on my second career by now, and still getting paid from my first!
Reply to this commentLinkReport AbuseUnemployment losses are a big factor in many government's fiscal situation. With unprecedented losses in jobs, and continuous extensions in unemployment benefits, the states have been left holding the bag.
Since unemployment is ultimately paid for by companies, rates will rise for the private sector. This increases the burden on them, but, over time, they will certainly diminish as unemployment falls.
Reply to this commentLinkReport AbuseWhat do you think is going to happen when a FOREVER stamp could be used 1 year or ten years from now. It was a defunct tool from the beginning.
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