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Economy
Post office nears historic default on $5B payment
2012-07-31
The U.S. Postal Service is bracing for a first-ever default on billions in payments due to the Treasury, adding to widening uncertainty about the mail agency's solvency as first-class letters plummet and Congress deadlocks on ways to stem the red ink.

With cash running perilously low, two legally required payments for future postal retirees' health benefits - $5.5 billion due Wednesday, and another $5.6 billion due in September - will be left unpaid, the mail agency said Monday. Postal officials said they also are studying whether they may need to delay other obligations. In the coming months, a $1.5 billion payment is due to the Labor Department for workers compensation, which for now it expects to make, as well as millions in interest payments to the Treasury.

The defaults won't stir any kind of catastrophe in day-to-day mail service. Post offices will stay open, mail trucks will run, employees will get paid, current retirees will get health benefits.

But a growing chorus of analysts, labor unions and business customers are troubled by continuing losses that point to deeper, longer-term financial damage, as the mail agency finds it increasingly preoccupied with staving off immediate bankruptcy while Congress delays on a postal overhaul bill.
Posted by:Fred

#10  Fear not, USPS, as a US courts declared that Iran + Al-Qaeda, etc. perpetrators of 9-11 have to payout US$9.0Bilyuhn in damages to Victims.

The US Govt's share comes out to ????????????
Posted by: JosephMendiola   2012-07-31 23:00  

#9   I am pretty sure if the post office charged the junk mail senders more money, they would be makiing a profit.

What would Capitol One do if the Post Office jacked up their rates for junk mail? If the junk mail stopped, what would happen to the postal workers and their union?
Posted by: Ebbang Uluque6305   2012-07-31 16:04  

#8  Post office fascinates me. On the normal workdays they can't possibly finish their rounds in the normal time so they get overtime or something but on Saturday when there is no overtime somehow they make all of the deliveries and nobody questions this?

Five days a week is sufficient. Heck, if it wasn't for Netflix I'd be content to get all my mail on Friday (especially if you include an opt-out for anything addrssed to neighbor or occupant or other spam. Perhaps that could be an option that might help them speed through their route the rest of the week.
Posted by: rjschwarz   2012-07-31 14:47  

#7  I am pretty sure if the post office charged the junk mail senders more money, they would be makiing a profit.
Posted by: texhooey   2012-07-31 12:47  

#6  We do not need a post office in 21st century America.

Disagree. We have neither the electronic payment nor legal infrastructure necessary to move to a completely paper-free marketplace. The postal service is still of extreme import to small business.
Posted by: Ulorong Thud8932   2012-07-31 12:42  

#5  Yeah, what he said. The mail is only junk mail, actual letters are almost nonexistent and bank statements and the like are all online now.

Can you believe that the Post Office actually has programs to make it easier to send junk mail? Incredible.
Posted by: gromky   2012-07-31 11:45  

#4  Disagree. There are fine and dandy substitutions for the urban/suburban environments, but rural America [which till the latter half of the 20th Century was most of America], still needs the function of the Constitutionally mandate requirement "To establish post offices and post roads;". [BTW, as a stickler of others in 'interpreting' the Constitution rather than amending it because its inconvenient, this would require an Article V action if we choose to end it.]

It was never seen to be a 'profit' making part of the federal system. It was always expected to lose money [just not billions mainly in pension commitments]. It was one of the last of the old patronage departments of the government. Local Post Masters changed with elections. It also kept costs down because the local Congresscritters didn't want to do something so close to home to upset their voters.

It doesn't need it 6 days a week. It doesn't need next day delivery. It does require a radical downsizing and orientation, to include as part of the federal system the elimination of closed shop/collective bargaining by state employees.
Posted by: Procopius2k   2012-07-31 08:47  

#3  We do not need a post office in 21st century America.

It was a great idea in the 18th century. It worked in the 19th. It was okay in the 20th. It began to break down near the end of that century.

We do not need a post office today. Take this simple test --

Gather all your mail for a month. Sort it to a) financial (bills, statements, etc) b) personal (letters, cards) and c) junk (everything else).

Which pile will be by far the largest at the end of the month? That's right.

The Post Office does less and less first-class mail, and more and more junk mail on behalf of corporations. Thanks Capital One but I DON'T WANT YOUR FRIGGIN' CARD. I don't need 50 invitations.

Packages can be delivered by UPS. Financial information can be delivered by secure web and email. Personal letters are Facebook, Twitter or email. Junk mail can be delivered by someone willing to pay full freight.

Wind it down. Pension off the older postal employees (the societal change isn't their fault) and provide a decent separation package for the younger employees (ditto).

Make a public declaration that in (say) 20 years the post office will close permanently. People will adapt. We're Americans.
Posted by: Steve White   2012-07-31 07:41  

#2  If you think the Post Office is doing good, just imagine what Federal health care would look like in 50 years!
Posted by: Bobby   2012-07-31 05:57  

#1  Take it out of Congress' pension fund. They have plenty of money. Share the pain, heh.
Posted by: Alaska Paul   2012-07-31 00:27  

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