At midnight Wednesday, the U.S. Postal Service is expected to default on a multi-billion dollar payment owed to the Treasury, highlighting financial struggles that could affect not only mail service but hundreds of thousands of jobs.

The agency's failure to make good on a $5.5 billion payment toward retiree health benefits comes as no surprise, and the default won't have any immediate effects on the postal service's day-to-day operations, the agency assured in a statement. But the missed payment -- reportedly the first of its kind in the post office's history -- will no doubt ramp up the debate over how best to address the agency's growing red ink.

On Tuesday, some proponents of reform blamed not the postal service but Congress itself for the default, citing a controversial 2006 law that increased the agency's financial obligations and lawmakers' failure so far to pass legislation this session that would address the agency's problems.

"The word 'default' sounds ominous, but in reality this is a default on the part of Congress," Fredric Rolando, president of the National Association of Letter Carriers union, said in an email to HuffPost.


http://www.huffingtonpost.com/2012/07/31/postal-service-default_n_1725263.html?ir=Politics&ncid=edlinkusaolp00000009

8/1/2012 2:17:36 AM

Yet another post from the GeniuSxBoY news aggregator.

I wonder if he even bothered to use the search feature to find the existing thread discussing this issue?

8/1/2012 3:03:59 AM

Yet another post from the A Tanzarian troll antagonist.

I wonder if he even bothered to use the search feature to find the existing thread discussing this issue?

8/1/2012 3:52:34 AM

While I recognize I don't have all the information or facts regarding this situation... I feel like it is another example of why government sponsored business/products/services are pretty much doomed to unprofitably and inefficiency.

Can any one fill me in on the specific reasons why their "business" model has failed? Anything beyond the advent of email?

8/1/2012 6:55:35 AM

message_topic.aspx?topic=597983

8/1/2012 8:25:48 AM

^^ Because some asshole decided 30 years ago that working for the post office as a federal employee for 20 years granted them retirement benefits status.

8/1/2012 8:32:39 AM

Quote :

" Because some asshole decided 30 years ago that working for the post office as a federal employee for 20 years granted them retirement benefits status."

Is that it? Or, did the postal service fail to adapt to the evolving market?

I contend that because the USPS was insulated from risk by government subsidization (guess not anymore?); it did not have the same market pressure that requires every other business to fail or adapt to sur(thr)ive.

The problem with entitlements (public or corporate) is that eventually someone else's money runs out.

[Edited on August 1, 2012 at 9:26 AM. Reason : words]

8/1/2012 9:25:30 AM

Quote :

"president of the National Association of Letter Carriers union, said in an email"

Well, there's your problem...they won't even mail things themselves!

8/1/2012 9:33:53 AM

get rid of every day delivery
move small town post offices into local shops/business (ex: grocery stores)
require that business mail pay its full cost of delivery

ez pz.

8/1/2012 9:39:57 AM

No. Smash the union first. Then, if it is still not profitable, privatize. Europeans manage to have government sponsored enterprises without such inflated compensation and benefits, why can't we?

8/1/2012 9:49:28 AM

unions, pensions, subsidizing, government entity, lack of adaptation have lead to USPS's problems.

Either shed the unions and pensions and adjust to the ever changing market, or shut it down.

I'd say to stop daily delivery, but that would negatively impact people and companies too much, so I don't know if that's a good idea. Closing small/underused offices is a great idea. Unfortunately Joe-bob and Bertha will bitch and whine and protest having to drive 10 minutes in the other direction to go to another post office, and for some reason, the USPS seems to listen to these people.

[Edited on August 1, 2012 at 11:07 AM. Reason : .]

8/1/2012 11:06:44 AM

stopping daily delivery wouldnt hurt anyone since 99% of mail is spam or not time sensitive. if a business or person wants guaranteed (at a certain time) delivery they should pay for it.

[Edited on August 1, 2012 at 11:15 AM. Reason : a]

8/1/2012 11:10:39 AM

You almost wonder if these greedy fucks are the ones at least partially behind lobbying for the bill that forced the USPS to pay billions a year to cover future retirees:

The postal uncertainty offers opportunities for banks, which can save up to one-third of the cost of processing checks if payments are made electronically. JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. have been urging electronic transactions.

"This could be a watershed event to motivate consumers and businesses to stop writing checks," said Rodney Gardner, head of global receivables at Bank of America, who recently reviewed the topic at a conference with insurance companies.

(From USA Today)
http://www.usatoday.com/news/washington/story/2012-07-30/postal-service-treasury/56592872/1

In 2006 this was passed:
http://www.govtrack.us/congress/bills/109/hr6407

(3)(A) The United States Postal Service shall pay into such Fund--

`(i) $5,400,000,000, not later than September 30, 2007;

`(ii) $5,600,000,000, not later than September 30, 2008;

`(iii) $5,400,000,000, not later than September 30, 2009;

`(iv) $5,500,000,000, not later than September 30, 2010;

`(v) $5,500,000,000, not later than September 30, 2011;

`(vi) $5,600,000,000, not later than September 30, 2012;

`(vii) $5,600,000,000, not later than September 30, 2013;

`(viii) $5,700,000,000, not later than September 30, 2014;

`(ix) $5,700,000,000, not later than September 30, 2015; and

`(x) $5,800,000,000, not later than September 30, 2016.

[Edited on August 1, 2012 at 11:39 AM. Reason : .]

8/1/2012 11:38:16 AM

Quote :

"You almost wonder if these greedy fucks are the ones behind the bill that forced the USPS to pay billions a year to cover future retirees. "

Requiring that pensions be funded when they are promised is the correct way to do pensions. Assuming future funding will be freely availble is fucking boomer retard think that causes all the problems we have. if you dont want to fund the pensions now, then dont promise the pensions.

Quote :

" The postal uncertainty offers opportunities for banks, which can save up to one-third of the cost of processing checks if payments are made electronically. JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. have been urging electronic transactions. "This could be a watershed event to motivate consumers and businesses to stop writing checks," said Rodney Gardner, head of global receivables at Bank of America, who recently reviewed the topic at a conference with insurance companies. "

YES YES YES! all archaic and wasteful systems should be eliminated.

8/1/2012 11:42:24 AM

Quote :

"Can any one fill me in on the specific reasons why their "business" model has failed?"

USPS considers it their duty to provide mail service to every address, no matter how remote, for cheap -- cheaper than what is profitable. They essentially subsidize FedEx, UPS, etc. for rural deliveries. Commercial carriers will carry a package to a major hub, and then slap some stamps on it so USPS can carry it the rest of the way.

They also have the issue with pre-funding retiree benefits, something commercial carriers aren't required to do. They also can't raise rates too much or offer "nonpostal services", something commercial carriers could do if they wanted.

I think that Congress should just decide what they want USPS to be: a for-profit venture that directly competes with the market (in which case it should probably be sold off and picked apart), or a taxpayer-funded government service.

[Edited on August 1, 2012 at 12:57 PM. Reason : .]

8/1/2012 12:49:51 PM

I never understood why they still have people going house to house to deliver mail.

No reason they can't save time and labor by placing 1 big mailbox at the end of each street that people can walk to.

8/1/2012 1:41:10 PM

The entire situation is an epic face palm.

Someone mentioned the decline in mail volume and I think thats playing a significant role but it gets much worse.

Congress basically asked USPS to fully fund its retirement benefits for the NEXT 75 YEARS in just 10 years. I actually support pre-funding, but that is just insane, its costing them 5 billion a year. They HAVE tried to cut costs, I think they've had layoffs every year since 2009!

There's even been a bill to cut costs debated this month, but its not gonna pass because Congress would rather go on recess.



Instead we need to take every chance to scapegoat public employees providing a valuable service. A service I'll remind you is enumerated in the constitution and was self-sufficient for a majority of its life (until this pre-funding disaster).





[Edited on August 1, 2012 at 7:56 PM. Reason : derp]

8/1/2012 7:54:09 PM

Yes, so they should have been pre-funding all along, but weren't.

And what does it matter that they perform a useful service? Everyone in America with a job performs a useful service, it doesn't mean they should get paid whatever they demand.

But you might have a point. Perhaps it would have been better if Congress had instead slashed their retirement benefits rather than imposing such outrageous promises on the American postal user.

8/1/2012 9:04:11 PM

rawr rawr rawr we should make public workers our slaves rawr.


The pre-funding that Congress is asking of the USPS doesn't happen anywhere including private businesses, this just another bullshit crisis manufactured by congress.

8/1/2012 9:37:29 PM

Completely incorrect. That is what a 401k is, your employer pre-funding your retirement.

8/1/2012 10:02:18 PM

Man, I wish I had the pension of a postal worker.

8/1/2012 10:09:44 PM

I would call a 401K system "pay-as-you go." The employer contributes to the 401K while you are employed there. For private businesses to do the same as what is required of the USPS they would need to be funding 401K accounts for workers that may be working there 10 years from now. So from the first day you join the company they already have your retirement money set aside in the bank



[Edited on August 1, 2012 at 10:22 PM. Reason : its crazy]

8/1/2012 10:15:50 PM

Quote :

"Completely incorrect. That is what a 401k is, your employer pre-funding your retirement."

I didn't know companies were required to fund your 401k. You sure you don't want to walk this one back, champ?

8/1/2012 10:54:56 PM

Walk what back? No one said 401k's were required, merely that they are a form of pre-funded retirement and their existence disproves the assertion that no private businesses ever pre-fund retirement.

So, your mistake is to see me write that clearly some businesses do X and immediately jump in that I'm an idiot for suggesting all businesses do X. You are still so eager to call me out for something you'll read what you want to read, reality be damned. Besides, don't you owe me $100?

TerdFerguson, I guarantee you they have not put $1 aside for workers that aren't working there yet. They're behind on contributing to their their current worker's retirements by decades, so even if they are required to set aside for workers not yet born, they won't get to dollar one for these people for decades to come. But this insanity is what happens when you have a defined benefit retirement plan, something which the private sector definitely doesn't copy. I think the postal service should scrap the union contract and its defined benefit plans and put all their current workers on defined contribution 401k plans. This would eliminate the need to pre-fund workers before you hire them.

8/1/2012 11:34:37 PM

I really wish the ups didn't suck so much dick.

8/1/2012 11:51:18 PM

Quote :

"Walk what back? No one said 401k's were required, merely that they are a form of pre-funded retirement and their existence disproves the assertion that no private businesses ever pre-fund retirement. "

That's not the assertion being made, though is it? TedFerguson stated, and I quote

Quote :

" The pre-funding that Congress is asking of the USPS doesn't happen anywhere including private businesses"

and I challenge you right now to point out any employer in the United States of America that funds a 401k of any employee at the level the post office is required to pre-fund.

This isn't a simple per-pay-period 2 % match, nor does the post office have the liberty of opting out of 401K matching the way employers did during the 2008 crash.

I also don't really care to call you out, you just make it so easy by speaking with such certainty even in cases where you aren't really correct.

8/2/2012 12:01:34 AM

I'm sure UPS and Fedex will deliver a birthday card for me for 45 cents.

8/2/2012 1:00:38 AM

Quote :

"TerdFerguson, I guarantee you they have not put $1 aside for workers that aren't working there yet. They're behind on contributing to their their current worker's retirements by decades, so even if they are required to set aside for workers not yet born, they won't get to dollar one for these people for decades to come."

Lonesnark, your guarantees are meaningless.

http://www.nytimes.com/2012/07/31/opinion/nocera-its-d-day-for-the-post-office.html

Quote :

"On the other hand, that prefunding requirement is an absolute killer. It has cost the post office more than $20 billion since 2007 — a period during which its total losses amounted to $25.3 billion. Without that requirement, the post office would still likely be struggling, but it would have a lot more wiggle room — and a lot more cash. (Its pension obligations are also overfunded by around $11 billion.) Not since the debt crisis has there been such an avoidable fiscal mess. "

Their current obligations are overfunded and yet they are still required to put aside 5 billion annually for future retirees, people that are going to be retiring over the next 30-40 years (a total of 55 billion). That means some of those retirees that will get that money don't even work at the USPS yet.

Again, I don't think pre-funding is a bad idea, but the USPS just doesn't have the money for it at this moment and deserves some flexibility from Congress who should probably spread the payments out over a longer time period.

8/2/2012 8:23:54 AM