United States Postal Service Broke

September 6, 2011 by USA Post 

United States Postal Service BrokeUnited States Postal Service Broke, U.S. Postal Service is running out of cash in a hurry. In a report in The New York Times, the USPS and reach a deficit of 9.2 billion in the fiscal year ending in late September.

The Postmaster General Patrick Donahoe said in an interview: “If Congress does not act, we by default.”  The default value is largely due to a payment service must be made to the retiree benefits of health in the future. Congress passed a law in 2006 requiring the USPS to make a payment and 5.5 billion dollars each year for ten years to ensure the future health benefits for the next 75 years. Along with sharp declines in revenue and higher operating costs, a fee that the USPS would not be able to sustain.

The problems of the post office is derived from the Internet revolution, people who corresponds via e-mail and paying bills online. The volume of mail has plummeted 22 percent since 2006. And labor agreements with the works of emails are financially effort of the agency.

Labor costs represent 80 percent of agency expenditures, including wages and benefits.

Donahoe has arrived with the controversial plan to cut costs, including the elimination of Saturday mail delivery. He also wants to close to 3,700 locations and firing of 120,000 postal workers.

The problem is that federal law requires Saturday mail service, and labor agreements to avoid layoffs of postal workers. Postal places can be closed legally, but protests from the community that is so difficult.

Congress is considering several proposals for emergency, including allowing the post office to recover billions of dollars in pension funds in excess, a reported total close to 60 billion.

The USPS is looking to win the right to deliver beer and wine. In addition, advertisements in the mail trucks and post offices to increase income, something the post office has to do. They have considered doing more “last mile” to competitors FedEx and UPS deliveries.

It has even been considered the consolidation of post offices with other government offices and operations of the addition of some department stores.

The USPS can not increase shipping costs higher than inflation.

The Senate Homeland Security and Governmental Affairs held a hearing to discuss the agency’s financial problems. Republicans and Democrats have not been able to reach a consensus on how to solve problems.

The USPS said that if Congress does not take emergency measures to help the agency to stabilize its finances could be forced to close this winter.

Donahoe hopes to reduce to 20 million dollars and 75 million in annual costs by 2015. Unions affiliated with the USPS are alarmed by the potential layoffs.

“We will fight this and we will fight hard,” said Cliff Guffey to the Times, the president of the American Postal Workers Union, “It is illegal to revoke the contract.”

The USPS generates its own income, which receives and 0 in taxpayer money to operate.

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