The U.S. Postal Service is broken. And, nearly broke.
The post office recently reported that it lost $5.2 billion for the quarter ending June 30. Since 2007, the U.S. Postal Service has lost $25 billion. The Postal Service is losing $36 million a day.
It gets worse. The U.S. Postal Service recently stated that it will miss making a payment of $5.5 billion to cover future health benefits, and added that it will miss an additional payment of $5.6 billion due in September. The USPS could run out of cash in October.
What's to blame for this mess? Clearly the emergence of email and electronic commerce have had a big impact. But so does Congress, who, in 2006, mandated that the USPS stick to delivering mail as opposed to offering new products and services.
And regarding those missed payments, it was Congress that mandated that the USPS pay $5 billion a year into a fund to cover future retiree health costs. It is a fund that already has $45 billion, enough, the postal unions say, to cover costs for decades.
In fairness, the Senate did recently pass a measure that would have allowed the USPS to provide retirement incentives to approximately 100,000 workers, and to recoup an $11 billion overpayment to an employee pension fund. But the House decided to take no action and go on vacation this month, triggering the initial default of $5.5 billion.
It's time to sit down and make the tough decisions that will lead to a new business model for the Postal Service. And the only people who are authorized to do that is Congress. And when they do get around to it, everything must be on the table including:
• Closing some post offices and processing centers
• Dropping Saturday delivery
• Allowing the USPS to compete with the private sector by diversifying its services and products
• Empowering the USPS to override, when necessary, union collective-bargaining agreements
• Privatization which would allow the USPS a chance to be financially viable by being freed from the interference of Congress.
WTTG FOX 5 & myfoxdc
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