Postal Service can't deliver payments
As Congress bickers over the future of the system, the USPS faces its first default ever.
The service owes a $5.5 billion payment due Aug. 1 that was deferred from fiscal 2011, The New York Times reports. Then it has $5.6 billion payment due at the end of September.
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The payments are for future retiree health benefits, part of the Congressional requirement that the Postal Service pre-fund the benefits for future retirees. The mandate has become too expensive for the Postal Service to meet while fulfilling all of its other obligations.
The Postal Service isn't declaring bankruptcy, nor will it stop functioning on Aug. 1. But this is an issue that lawmakers must take action on, because it isn't going away.
The U.S. Senate passed a bill in April that returns $11 billion the service has overpaid into one of its pension funds, the Times reports. The bill also gives the service more years -- about 40 -- in which to make its payments, thus dropping the annual total to $2.5 billion. It also delays for two years the inevitable move to five-day delivery.
But House republicans hate the bill, which is one reason they have put off a vote on it indefinitely. Rep. Darrell Issa, R-Calif., has offered another proposal that breaks union contracts and gives the service a fast deadline by which it must make drastic cuts to Saturday service and its plants and locations.
Labor unions hate both bills, but they especially hate Issa's proposal. They say the fix here is to end the mandate to pre-fund retiree benefits.
Without any sort of legislative solution, Congress can keep putting short-term bandages on the Postal Service. And an eventual bankruptcy keeps getting closer.
The Postal Service, meanwhile, has told FedEx (FDX) that it will seek bids for new partners after its longtime contract with the company ends next year. FedEx has provided service for the USPS since 2001 and received an estimated $1.5 billion in revenue last year in the contract.
Instead of renewing with FedEx, the Postal Service will make the company compete for a new contract. Rival UPS (UPS) is already preparing to bid, Reuters reports.
| Tags: | Kim Peterson |
They are bought and paid for long before they get to the national level.
Congress ( House and Senate ) is incapable of doing what they were sent there to do.
Profit and Greed will always take priority over common sense.
So until someone figures out how to make a non-greedy human, then we get what we deserve.
Overall it seems the Feds are going to continue to force the USPS to prepay retirement to them which will allow the Feds to "abuse their privileges of 'holding' the retirement funds" just like they did with the Social Security funds replaced with I O U's that can now never be covered. Spoiled rich brats elected into offices mismanaging all the money as they have no clue to how live within a budget, nor how to make a budget, nor how to live 'normally' without all the expensive elite expenditures within their positions. While the working man and woman suffers with stupidity placed on the USPS providing good career positions for many people that the Govt doesn't seem to give a hoot if they screw that up. What next are they going to kill thousands upon hundreds of thousands more jobs?
You can thank the Bush Administration for implementing a law during their administration for the Post Office to pay pension and healthcare benefits to their families and surviving spouses for a number of years. What they really want to do is privatize every Federal agency they can get their greedy hands on.
Romney, the faker loves privatization. He also loves being a "tax dodger" hiding alot of his wealth off shore.
In the last month alone my letter carrier has lost 1 package sent to me, misdelivered another sent to me, and delivered me at least 10 pieces of someone else's mail. 5 months ago I went on vacation and had the post office hold my mail with a request to deliver it when I returned. It was delivered to the wrong house. You would think that after not delivering for a week the letter carrier would have an idea where it goes.......guess not. Every time I see him he's on his cellphone. The last conversation I overheard he was bragging about all of the overtime pay he was getting. Forget about the postal service. The inmates are running the asylum! It's time for the US taxpayer to stop funding an agency that is out of control.
Yes, I am a former postal employee. Spent 35+ years there. Can the PO do a better job? Yes. Should it do a better job? Absolutely. Is the private sector where this will happen? Not likely.
I don't think it's wrong to pre-fund the retirement system because sometimes when companies go bankrupt the helpless retirees who put in their time and paid their dues lose their pensions and health benefits. I think this pre-funding and should probably be expanded to more companies and retiree benefits protected at all companies so like when airlines file bankrupcy which they often due they shouldn't be able to screw retirees.
The postal service needs to generate new revenues. Two ways they can do that is to do foreign money exchanges in high tourist areas.
Another would be to have the Postal system administer the new US SAving Bond program that is being created for the internet. That means that only half of the population will have access to this Saving Bond program if its restricted to the internet.
Can Congress get any more stupid?
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