Revenue can’t cover pay and pensions
by Jeff Davis
Don’t be too surprised if it costs 75 cents to mail a letter this time next year. CNN reports: “The U.S. Postal Service warned Wednesday that it may default on some of its financial obligations later this year after reporting yet another quarterly loss. 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. The agency has been suffering from an ongoing decline in mail volume, which has undercut revenues, while retiree health care costs have been straining its reserves.”
Now, this is an interesting warning sign. You know all those lovely federal pension benefits that you government workers (including FBI and BATFE and Department of Justice thugs) were promised when you signed on? They may not be there when your time comes to draw that pension. Come to think of it, the pension might not be there either.
CNN goes on: “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.”
Another interesting comment in the margins of this article: from now on, all first-class stamps are to be “Forever” stamps, without denominations. This will allow for more and more frequent cost increases for mailing a letter, increases which were previously restricted to once a year.
CNN continues: “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. The Postal Service has taken a number of steps to increase revenue, including marketing initiatives and price increases. The agency raised rates an average of 3.6% in January. It is also perusing more dramatic changes. Last year, the USPS submitted a request to the Postal Regulatory Commission, which oversees the agency, to eliminate Saturday mail service. The commission has yet to respond to the request, but a spokesman said it is in the final phase of making its decision.”
Meaning that mail will pile up over the weekend. and the remaining postal workers will have an even more monstrous load of work to catch up with when they come in on Monday morning.
CNN: “The USPS has also cut back on hours to save money. The agency expects to eliminate 40 million work hours this fiscal year as part of a plan to save $2 billion.”
No doubt this explains the longer and longer lines in the post office and the six closed work stations at the counter with only the seventh one open and serving customers. The Post Office is one of those outfits where any cutbacks in personnel and facilities automatically means poorer service.
CNN notes “On the bright side, the Postal Service said improving economic conditions suggest the ‘worst of the precipitous volume decline during the recession is over.’ But mail volume continues to be anemic, rising only 1.5% in the first quarter as economic growth remains sluggish.”
Of course, that also may well have a lot to do with the increased use of e-mail over the past 15 years. One of the many plans lying in wait on the liberal Agenda is to let the Post Office get their bureaucratic hands on e-mail and make a charge per e-mail. We’ve been able to shut them down on that, but then they’ll just dump the costs of the postal service on taxpayers.
