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The U.S. Postal Service (USPS) defaulted on its debt last night. No, it has nothing to do with the partial shutdown of the government. The USPS is not affected by that. Rather, it has its very own, parallel fiscal crisis that threatens its viability as an institution.
Yesterday’s default—on $5.6 billion owed to the U.S. Treasury for funding of retiree health benefits—will be the third such default in as many years. The USPS just doesn’t have the money. After seven straight years of deficits, the USPS is just about out of cash. And things are likely to get worse before they get better: Postmaster General Patrick Donahue reports that by mid-October, the government-owned enterprise will have no more than five days’ worth of cash on hand. That’s a dangerously low amount. With an unexpected uptick in expenses or slowdown in revenue, the USPS’s coffers could be wiped clean.
A shutdown on operations is unlikely. Mail will be delivered next month, but the present path is unsustainable.
Some blame the Postal Service’s financial woes on the very debts it has defaulted on, which are used to pre-fund the USPS’s obligations to its retirees. But the root cause goes deeper: the rapidly shrinking volume of mail, as consumers move to electronic forms of communication. Since 2007 alone, the amount of first-class mail has shrunk 30 percent. Another 40 percent may be gone by 2020.
The Postal Service itself has long been sounding the alarm on this growing financial crisis. To address the short-term lack of cash, it has requested an increase in postage rates. But more fundamental reform is needed to give the Postal Service a chance at long-term survival.
Congress, however, has blocked reform at every turn. Plans to save money by reducing Saturday deliveries and reducing the number of post offices have been blocked on Capitol Hill. Unless these and other restrictions on the USPS’s efforts to reform itself are lifted, the Postal Service’s future—and taxpayers’ pocketbooks—will be at risk.
Why increase the stamp prices again when we could save money by privatizing the post office!!!!! SEPTEMBER 5, 2013 4:57PM U.S. Postal Service Likely to Seek “Emergency” Increase in Stamp Prices By TAD DEHAVEN SHARE The U.S. Postal Service is structured to subsist on the revenues it generates from the sale of its products and services. In […]
Should we junk the mail and privatize the USPS? w/ Tad DeHaven Uploaded by thomhartmann on Aug 10, 2009 http://www.thomhartmann.com With a deficit of almost 16 billion in 2011 the post office must be closed and private firms can take over. This is a complete joke now. Privatizing the U.S. Postal Service Print PDF by […]
The post office is running a huge deficit and it is time to privatize it. Postal Reform in the Lame Duck? Posted by Tad DeHaven According to the Hill, policymakers are “scrambling” to do something about the U.S. Postal Service in the current lame-duck session of Congress. The USPS’s recently announced $15.9 billion loss for […]
We need to privatize the post office. U.S. Postal Service Default Posted by Tad DeHaven No, the U.S. Postal Service won’t close on August 1st because it can’t afford to make a required $5.5 billion payment into a federal fund for postal retiree health benefits. Yes, the entire situation with the USPS is a mess. […]
Max Brantley has rightly noted that Congress is often the problem when cutting the number of inefficient post office branches is proposed. The Arkansas Times rightly jumped on Republicans for whining about the local post office branches that were closing. (It is sad to me that Republican Presidential Candidates are not very brave about offering any […]
I really wish that President Obama would have not had the federal government buy up General Motors. We need to keep the federal government out of the private market as much as possible. This goes for the post office too. It should be in private hands. Senators voted recently to hold off closing some post […]
When you look at how good the private enterprise does with deliveries and then compare it to how bad the federal government does with the same duties it is laughable. The answer to the federal post office problem is to encourage private entrepreneurs to fill the gap and provide competition for the post office in […]
The Arkansas Times rightly jumped on Republicans for whining about the local post office branches that were closing. (It is sad to me that Republican Presidential Candidates are not very brave about offering any spending cuts.) The real answer is privatizing the post office. Here is a good article from the Cato Institute: The USPS […]
Post Office on the brink of financial collapse You’ve Got (No) Mail: Is the End Near for the Postal Service? By James Gattuso September 29, 2011 The United States Postal Service (USPS) stands on the brink of financial collapse. According to the Postmaster General, by next month, USPS coffers will be down to a week’s […]
We need to close U.S.Post Office There is only one option in my view. We can not keep on losing money every year like the U.S.Postal Service (7 billion this year). Closing Post Offices PrintThe U.S. Postal Service just posted a $3.1 billion loss for the third quarter and the outlook for the rest […]
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