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Postal Service Projects $238B Deficit Over Next Decade; Sat. mail gone in 2011

This story has bailout written all over it. Is the economy really improving?

Postal Service unveils plan for delivery cuts
A cost-cutting proposal would end Saturday mail delivery early next year and slash thousands of jobs, aiming to help a projected $238-billion deficit over the next decade.

By Clement Tan
March 29, 2010 | 5:47 p.m.

Reporting from Washington - The discussed demise of Saturday mail delivery would become a reality early next year under a cost-cutting U.S. Postal Service plan unveiled Monday that would also slash thousands of front-line jobs.

"Given the fact that we're facing such a huge deficit, we'd like to move as quickly as possible," Postmaster General John E. Potter told a news conference.

Faced with a projected $238-billion deficit over the next decade, the Postal Service board of governors approved the cuts last week and ordered Potter to submit the proposal to the Postal Regulatory Commission on Tuesday.

In addition to cutting one day a week from the delivery schedule, the proposal would eliminate the equivalent of 40,000 full- and part-time jobs, about 8% of the current workforce of 600,000. Officials said the changes would save the Postal Service a projected $3.3 billion in the first year and about $5.1 billion annually by 2020.

Express mail and remittance mail services would still run seven days a week.

If approved by Congress and the regulatory commission, officials said they hoped to implement the plan by the first half of 2011.

Potter said the Postal Service would eliminate about 26,000 positions through attrition and lay off 13,000 part-time workers. He said the average letter carrier is 53 years old, and most have pension arrangements that would allow them to retire at 55. About 10,000 letter carriers retire each year.

Continuing declines in mail volume also made changes necessary, Potter said. American mailboxes receive an average of four pieces of mail each day, but projections show this may decline to three by 2020.

A spokesman for the National Assn. of Letter Carriers said the union opposed the cutbacks, and pointed to a recent report from the Postal Service inspector general that indicated the agency was pouring billions of dollars more than necessary into retirement funds.

"The Postal Service need to focus on reforming its pension costs instead," said the spokesman, Drew Von Bergen.

Sen. Thomas R. Carper (D-Del.), who chairs the Senate panel overseeing postal operations, said this month that he supported cost reduction plans.

Carper's office said Monday that a panel hearing was tentatively scheduled in April to consider Postal Service finances.

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i read an article on the web

that outlined very well how USPS is not and has never been self sustaining.

i wish i could find it again, but the government gives USPS money all the time, was the main point.

imagine if Microsoft, or IBM declared a $238 billion deficit over the next 10 years...

thats bailing out GM once a year, for the next 10 years.

SteveMT's picture

Without competition, you get this waste everytime.

"The inspector general for the USPS reports that in a five-month period, $800k was spent improperly on unapproved, non-business meals, alcohol, and events by Postal Service employees. Yet the agency is crying because they lost $3.8 billion in the most recent fiscal year."

Why does the U.S. Postal Service exist?

Posted by Tracy Coenen on December 19, 2009 · 36 Comments

ponyexpressBack in the day, a government-run delivery service was a good idea. It put some quality controls in place and made the service more reliable. People could actually count on their letters getting to their final destination.

But in this day and age, the U.S. Postal Service is no longer needed, and I suggest that we get rid of this drain on tax dollars.

Many people think it’s a foregone conclusion that the U.S. Postal Service is needed, wanted, and necessary. I strongly disagree. You don’t want to spend $8 to send a lettter via FedEx or UPS? You wouldn’t have to. If the USPS goes away, I guarantee that a private carrier like FedEx or UPS would create a new service for cheap letter delivery. Why? Because they’re so good at what they do and they could make money doing so.

And how many letters do you mail anyway? With the proliferation of online bill pay and electronic statements, my use of USPS has gone down dramatically. I run a business and my personal life, and I mail less than 10 pieces of mail each month. I could mail even less if I tried harder. We simply don’t need the post office like we used to!

The biggest advantage to getting rid of the Post Office would obviously be the savings of tax dollars.

http://www.sequenceinc.com/fraudfiles/2009/12/19/why-does-th...