Saturday, October 13, 2012

The Postal Situation- Return to Sender

It has been widely known the retirement pre funding mandate is the biggest line item that is pushing the Postal Service into financial ruin, but also with the Internet & fax capability, communications & documents can be moved in a matter of seconds, rather than land based snail mail. 
Actually, the pre-funding requirement that was added as an amendment to a 2006 law is as follows:
Congressional role
"Of related significance is the Postal Accountability and Enhancement Act of 2006 (PAEA), which obligates the USPS to prefund 75 years' worth of future health care benefit payments to retirees within a ten-year time span – a requirement to which no other government organization is subject. Thus, in addition to the weak economy and the diversion of mail to electronic means, the mandates of PAEA have had a considerable impact on Postal Service finances. As a consequence, it has been charged that the US Postal Service budget crisis of 2011 is, in essence, an artificial crisis." -NBC NEWS
Congress also has the ability to affect the USPS budget by changing rates for postage.
Why does no other government agency or private company have to struggle under this burden?? Could it be that some people want to force USPS out of business?? (Ask Felon Tom Delay). 
The postal service is raising the rate of a stamp by one cent in Jan of 2013. 
I read a bunch of comments, lots of people had their panties in a knot over the penny increase--but seriously-- have you looked at the cost of gas lately? I doubt the penny increase even covers that cost spike. The new "forever stamp" format means you can use the old stamps w/o additional postage... forever.  So you can stock up prior to the rate hike if the additional penny per letter is a hardship. 

For years, I have advocated for the elimination of the Saturday delivery day. Our neighbors to the north, Canada have been doing 5 day a week delivery since Feb 1, 1969. So we are 43 years behind the times, in that regard. 

One of this country's problems is letting issue like this continue to circle the drain, and the more years that goes on, the more billions in the red the Postal Service suffers. 
Come on! When we hit personal financial hard times, we make decisions to alleviate the problem early on. You have a high interest credit card & too much debt- you see about getting into a lower interest rate & get the balance paid down faster. You have less cash flow, you make less expensive choices. If Congress enacted funky mandates that are a choke hold on the USPS, have them fix it.  5 day a week delivery is not a huge hardship & would save $3.5 BILLION per year.  
  • The Postmaster General has estimated that cutting Saturday mail delivery could save as much as $3.5 billion per year, but the Postal Regulatory Commission has its own conflicting estimate that places the number closer to $2 billion. With differing opinions from those sources, the debate rages about the possible benefits of ending Saturday service.- eHow
    I contend the cost savings-- be it (just) $2 billion or $3.5 billion, is substantial enough to take action. According to the AP, in August 2012, the USPS reported a $5.2 billion dollar loss in the 3rd quarter. 
The sticky wicket, is this:
"The U.S. Postal Service receives its mandate and its funding from Congress through a Financial Services Appropriations bill. It is the will of the House of Representatives and Senate, through the appropriations process that mail be delivered six days a week."

Congress needs to *do something*. Roll back the 75 year pension mandate and or cut one day of delivery. 
Doing nothing is not really cutting it, and if history repeats itself, the Party of NO (GOP), would likely throw in some other tax cut for the rich & vote in lockstep unless they get it. 

The whole situation is out of control, and they longer nothing is done, the deeper the financial hole. 

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