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badger
9/2/2011, 05:16 PM
Read this:


The Postal Service, which was set up as a self-supporting agency in the 1970s and receives no tax money, is expected to run out of cash by the end of September.

Link (http://www.tulsaworld.com/news/article.aspx?subjectid=336&articleid=20110902_336_A10_BROKEN387184)

Aside from standing in a few long lines during holiday season, I've really never had any complaints about USPS service or pricing or anything... maybe that's why they're about to run outta cash.

Anyone have any insider knowledge on what's going to happen if they run outta money at the end of the month?

pphilfran
9/2/2011, 06:30 PM
In Sept they are scheduled to pay a 5.5 billion pension pre funding...very few companies or fed operations have to meet such an obligation....they wanted a waiver but I think they were turned down...they were granted a waiver a year or two ago...imo they are overfunded and should be grated the waiver...

They are almost solvent if you disregard the giant pension payment...

There future looks bleak...massive cuts and closures already announced and you can bet there will be more down the road...

soonercruiser
9/2/2011, 10:40 PM
$8 Billion loss in 2010!
There is only one way the the USPS keeps on going.....
Your tax dollars.
Sure, it may be filtered through the government to make it look like it doesn't.
But, it does, and has for years!

Remember the Congressional Post Office Scandal?
Don't expect Congress to hold the P.O.'s feet to the fire!

diverdog
9/3/2011, 02:38 AM
$8 Billion loss in 2010!
There is only one way the the USPS keeps on going.....
Your tax dollars.
Sure, it may be filtered through the government to make it look like it doesn't.
But, it does, and has for years!

Remember the Congressional Post Office Scandal?
Don't expect Congress to hold the P.O.'s feet to the fire!

Cruiser the USPS is mandated in the Constitution. We have to fund it.

soonercruiser
9/3/2011, 01:49 PM
Then, we should manage it efficiently; or outsource it!

diverdog
9/4/2011, 10:36 AM
Then, we should manage it efficiently; or outsource it!

Agreed. It needs congress out of its business.

Tulsa_Fireman
9/4/2011, 09:11 PM
derp derp durpa derk derp

SoonerKnight
9/4/2011, 09:25 PM
It's mandated to ensure all americans have access to the post. You country bumpkins that live way the heck out there would not get anything if we "outsourced it". Last I checked tax dollars don't pay for the post office.

SoonerKnight
9/4/2011, 09:26 PM
The USPS has not directly received taxpayer-dollars since the early 1980s with the minor exception of subsidies for costs associated with the disabled and overseas voters. Revenue has been in freefall due to declining mail volume.[3] The postal service has attempted to look to other sources of revenue while cutting costs to reduce its budget deficit

soonercruiser
9/5/2011, 01:10 PM
It's mandated to ensure all americans have access to the post. You country bumpkins that live way the heck out there would not get anything if we "outsourced it". Last I checked tax dollars don't pay for the post office.

Please explain how the USPS keeps it's doors open with multi-year $Billion shortfalls. $8 Billion last year alone!
(I've never seen a bake sale in the Post Office!) :distress:

TUSooner
9/9/2011, 12:45 PM
I think postal service is one area where the Fed Govt should be directly involved, and without regard to whether it makes a profit -- not that it should be allowed huge losses either. But I would make the service very much smaller and more efficient, and I'd have it stick to delivering first and second class mail, express mail, and parcels, and no more delivering dirt-cheap advertising flyers.

When I carried the mail, I was always told that the PO made its money on those house-to-house circulars & such. But I know they took a lot of time to deliver, and that the people deliveringthem were paid rather well, by the hour, and had no incentive to hurry things along. It just never looked like a good use of people and money, alebit that I had a limited perspective from the street and never saw anyting like financial records, etc.

TUSooner
9/9/2011, 12:55 PM
Please explain how the USPS keeps it's doors open with multi-year $Billion shortfalls. $8 Billion last year alone!
(I've never seen a bake sale in the Post Office!) :distress:


Serious question: Do you think the govt should get out of the postal biz? Do you think private companies will deliver mail to people out in the middle of nowhere and in all the hard-to-reach places in our country? Is that a national concern?

Which begs this other question: Is there ANYTHING the Government should do? I hear lots of howling and snorting (mostly knee-jerk stuff, imho) about how we need a smaller federal gubment, but how small is small enough?

badger
9/9/2011, 12:58 PM
At this point, I think the government should just let this play out and not bail them out of the situation. The unions are not compromising on this, and the postal service had failing money policies in place that forced them to depend on borrow money and have been borrowing time ever since, just waiting for the inevitable. USPS business seems to be on a downward spiral that will not return to previous high levels, employees are not retiring or quitting fast enough and unions are disallowing layoffs (as you'd expect).

The only solution is downsizing because the work level is so low that there's been reports of places like GM's infamous jobs bank, where people are paid to do nothing but wait for work that isn't coming. Sad. And demeaning to the workers. :(

pphilfran
9/9/2011, 01:11 PM
They want to downsize...they have a plan...layoffs and office closing...elimination of Sat delivery...they also want out of this years prefunding...

They now wait on approval...

OutlandTrophy
9/9/2011, 03:18 PM
It's mandated to ensure all americans have access to the post. You country bumpkins that live way the heck out there would not get anything if we "outsourced it". Last I checked tax dollars don't pay for the post office.

you should check again.

marfacowboy
9/11/2011, 09:54 PM
I'm pretty sick of politics all around, but the truth about the situation at the USPS is really not being told. The postal service was self funded and thriving until fairly recently. In 2006, Congress passed the PostalAccountability Enhancement Act (PAEA), which mandated that the Postal Service would have to fully fund retiree health benefits for future retirees. It mandated the Postal Service to fully fund the benefitsfor the next 75 years and within a ten-year window. So, every September 30th, they have to cough up $5.5 billion to the Treasury for the pre-funding of future retirees' health benefits, meaning they essentiallypay for employees 75 years into the future. It's insane and the biggest issue with cash flow, other than overpaying into the pension fund. All of it can be fixed fairly easily but probably won't be.

C&CDean
9/12/2011, 04:36 PM
I'm pretty sick of politics all around, but the truth about the situation at the USPS is really not being told. The postal service was self funded and thriving until fairly recently. In 2006, Congress passed the PostalAccountability Enhancement Act (PAEA), which mandated that the Postal Service would have to fully fund retiree health benefits for future retirees. It mandated the Postal Service to fully fund the benefitsfor the next 75 years and within a ten-year window. So, every September 30th, they have to cough up $5.5 billion to the Treasury for the pre-funding of future retirees' health benefits, meaning they essentiallypay for employees 75 years into the future. It's insane and the biggest issue with cash flow, other than overpaying into the pension fund. All of it can be fixed fairly easily but probably won't be.

Chicken. Dinner.

OutlandTrophy
9/12/2011, 04:46 PM
I'm pretty sick of politics all around, but the truth about the situation at the USPS is really not being told. The postal service was self funded and thriving until fairly recently. In 2006, Congress passed the PostalAccountability Enhancement Act (PAEA), which mandated that the Postal Service would have to fully fund retiree health benefits for future retirees. It mandated the Postal Service to fully fund the benefitsfor the next 75 years and within a ten-year window. So, every September 30th, they have to cough up $5.5 billion to the Treasury for the pre-funding of future retirees' health benefits, meaning they essentiallypay for employees 75 years into the future. It's insane and the biggest issue with cash flow, other than overpaying into the pension fund. All of it can be fixed fairly easily but probably won't be.

but they lost $8.5 billion for the year last year. Take away the $5.5 billion pre-payment and you have a $3 billion loss for the year. What am I missing?

marfacowboy
9/12/2011, 04:50 PM
but they lost $8.5 billion for the year last year. Take away the $5.5 billion pre-payment and you have a $3 billion loss for the year. What am I missing?
The overpayments into the pension fund. Plus, they frankly took the same hit everyone else took in 2008 onward. They'll have to adjust like everyone else.

OutlandTrophy
9/12/2011, 04:54 PM
The overpayments into the pension fund. Plus, they frankly took the same hit everyone else took in 2008 onward. They'll have to adjust like everyone else.

So the majority of their financial problems are due to benefits and retirement for employees? Are you also saying that prior to 2008 they were making a profit?

I really don't understand their issues as I read them in articles versus what I read in this thread.

OUInformant
9/12/2011, 04:56 PM
It's easy for some to say, "hey, let's not support the postal service because they are broke and too inefficient." A lot of Oklahomans would not receive any mail if we outsourced rural mail-delivery to private companies. It is not profitable for private companies to do this, unless their prices go way up or the company became subsidized (which defeats the purpose of outsourcing). Since Oklahoma is, indeed, a relatively poor agricultural state, the USPS is likely very beneficial to our state.

The postal service obviously needs to be reformed a bit if it is losing significant amounts of money. Pensions may represent a significant portion of the postal service's expenses since a whole generation of postal workers are retiring (Boomers). This is likely to be where cuts are made, i.e., in employee benefits.

I'm 30 years old, so likely any cuts to the postal service will involve eliminating the pension program for those in my generation, or laying off a bunch of workers, which is probably a bad idea considering an unemployment rate above 9%.

C&CDean
9/12/2011, 04:59 PM
but they lost $8.5 billion for the year last year. Take away the $5.5 billion pre-payment and you have a $3 billion loss for the year. What am I missing?

A lot.

First, the USPS is not allowed to make a profit. Not a penny. So, when the USPS was making money (and they were making a lot of it in the 90's-early 2000s) everything they made above operating costs had to be turned over to the Federal Government. They called it the "general fund." There were some years where they ended up with a few/several million in the red - which actually equates to about 3-hours worth of revenue. All this was done without being able to operate as an actual business because their hands were tied by congressional order. Example: UPS/FedEX/etc. won't deliver anything up on the Ketchikan Penninsula in Alaska. By law, the USPS has to. For the same price as a letter down the street. For 44 cents you have a letter that goes on an airliner, then a truck, then a float plane, then a jeep, then a snowmobile for final delivery.

A couple of things have hurt them bad lately. Just before I retired I worked on a program called the Flats Sequencing System. Northrop-Grumman was the primary contractor on this project. It was a $1Billion project. After contract award and a prototype and then a couple First Article machines were built the flat volume went absolutely, completely pathetically, belly up. Still have to buy all 100 machines and continue to pay the contractor for support at $10 million a pop. It's just one of many examples of ****-poor timing.

If congress will allow them to drop the pre-funded health care payment and go to 5-day delivery they will be fine with all the measures they've already enacted (me retiring early was one of them). If not, they're effed. In the A.

pphilfran
9/12/2011, 04:59 PM
So the majority of their financial problems are due to benefits and retirement for employees? Are you also saying that prior to 2008 they were making a profit?

I really don't understand their issues as I read them in articles versus what I read in this thread.

Many different issues...

The pension payment is far and away the most expensive in any industry, private or public...

They have declining volume and project further declines well into the future...

They have an ever expanding retirement group while employees are on the decline...

They have little control over pricing and basic management decision making...they have to get approval from DC....

Their plan is solid...at least as solid as they can make it without shutting down...

OUInformant
9/12/2011, 05:07 PM
A lot.

First, the USPS is not allowed to make a profit. Not a penny. So, when the USPS was making money (and they were making a lot of it in the 90's-early 2000s) everything they made above operating costs had to be turned over to the Federal Government. They called it the "general fund." There were some years where they ended up with a few/several million in the red - which actually equates to about 3-hours worth of revenue. All this was done without being able to operate as an actual business because their hands were tied by congressional order. Example: UPS/FedEX/etc. won't deliver anything up on the Ketchikan Penninsula in Alaska. By law, the USPS has to. For the same price as a letter down the street. For 44 cents you have a letter that goes on an airliner, then a truck, then a float plane, then a jeep, then a snowmobile for final delivery.

A couple of things have hurt them bad lately. Just before I retired I worked on a program called the Flats Sequencing System. Northrop-Grumman was the primary contractor on this project. It was a $1Billion project. After contract award and a prototype and then a couple First Article machines were built the flat volume went absolutely, completely pathetically, belly up. Still have to buy all 100 machines and continue to pay the contractor for support at $10 million a pop. It's just one of many examples of ****-poor timing.

If congress will allow them to drop the pre-funded health care payment and go to 5-day delivery they will be fine with all the measures they've already enacted (me retiring early was one of them). If not, they're effed. In the A.

Quite interesting. Thanks for posting.

OutlandTrophy
9/12/2011, 05:11 PM
A lot.

First, the USPS is not allowed to make a profit. Not a penny. So, when the USPS was making money (and they were making a lot of it in the 90's-early 2000s) everything they made above operating costs had to be turned over to the Federal Government. They called it the "general fund." There were some years where they ended up with a few/several million in the red - which actually equates to about 3-hours worth of revenue. All this was done without being able to operate as an actual business because their hands were tied by congressional order. Example: UPS/FedEX/etc. won't deliver anything up on the Ketchikan Penninsula in Alaska. By law, the USPS has to. For the same price as a letter down the street. For 44 cents you have a letter that goes on an airliner, then a truck, then a float plane, then a jeep, then a snowmobile for final delivery.A couple of things have hurt them bad lately. Just before I retired I worked on a program called the Flats Sequencing System. Northrop-Grumman was the primary contractor on this project. It was a $1Billion project. After contract award and a prototype and then a couple First Article machines were built the flat volume went absolutely, completely pathetically, belly up. Still have to buy all 100 machines and continue to pay the contractor for support at $10 million a pop. It's just one of many examples of ****-poor timing.

If congress will allow them to drop the pre-funded health care payment and go to 5-day delivery they will be fine with all the measures they've already enacted (me retiring early was one of them). If not, they're effed. In the A.

I get the fact that the USPS has to provide services. Does anyone have a number of what those services actually cost that they have to provide and UPS/FedEx don't? Is is $1 million or $3.5 Billion?

Why is Congress making them pre fund the health care payment?

Were they repaying loans in the 90s and into the 2000s or were they just handing the "profits" over?

pphilfran
9/12/2011, 05:12 PM
http://about.usps.com/who-we-are/financials/annual-reports/fy2010.pdf

The link is to the USPS 2010 annual report....in March they knew the direction they must take...

It is now Sept and they still do not have approval on any of the items that are critical to their survival....

pphilfran
9/12/2011, 05:14 PM
I think they were forced to pre fund because so many public companies were underfunding their pension plans...so Congress mandated the pre funding to keep it from happening to the USPS...

I might be wrong on the reason but I am fairly confident...kinda...

OUInformant
9/12/2011, 05:15 PM
Many different issues...

The pension payment is far and away the most expensive in any industry, private or public...

They have declining volume and project further declines well into the future...

They have an ever expanding retirement group while employees are on the decline...

They have little control over pricing and basic management decision making...they have to get approval from DC....

Their plan is solid...at least as solid as they can make it without shutting down...

If this is true, therein lies the problem.

OUInformant
9/12/2011, 05:17 PM
http://about.usps.com/who-we-are/financials/annual-reports/fy2010.pdf

The link is to the USPS 2010 annual report....in March they knew the direction they must take...

It is now Sept and they still do not have approval on any of the items that are critical to their survival....

Yeah, pathetic isn't it. They are like the NCAA.

OUInformant
9/12/2011, 05:22 PM
Serious question: Do you think the govt should get out of the postal biz? Do you think private companies will deliver mail to people out in the middle of nowhere and in all the hard-to-reach places in our country? Is that a national concern?

Which begs this other question: Is there ANYTHING the Government should do? I hear lots of howling and snorting (mostly knee-jerk stuff, imho) about how we need a smaller federal gubment, but how small is small enough?

That is a great question.

The problem isn't with big/small government. The problem is more fundamental than that, involving things like campaign financing laws, term limits, etc. The government has just become incapable of taking action, whatever the action may be.

C&CDean
9/12/2011, 05:22 PM
I get the fact that the USPS has to provide services. Does anyone have a number of what those services actually cost that they have to provide and UPS/FedEx don't? Is is $1 million or $3.5 Billion?

Why is Congress making them pre fund the health care payment?

Were they repaying loans in the 90s and into the 2000s or were they just handing the "profits" over?

In the billions. In addition to my example, there are hundreds of tiny little POs in the country that have to remain open. Every time the USPS attempts to consolidate, some representative ixnays it. In Oklahoma alone, there are tons of small Post Offices that are extremely inefficient to operate. Why do Noble, Lexington, Purcell, Wayne, Paoli, and Pauls Valley all need their own PO? Mail to all of these towns could be delivered out of Norman or Purcell. Why? Cause some cranky old codgers want their PO box up the street instead of getting mail delivered to their house.

There are places where it's far worse than Oklahoma. Every one of these offices costs the USPS tons of money (no, I don't have an exact figure, but collectively it's in the billions). You have building/property leases and/or taxes. You have utilities. You have salaries. You have to maintain a certain amount of stamp stock. Etc.

If Congress ever turned the USPS loose, they would kick some serious ***. Of course a hell of a lot of people would be unhappy.

Also, if you hear somebody say "well I sent a package Fed Ex to Ketchikan" you wanna know who did the final delivery beyond Anchorage. Yup, the USPS.

OUInformant
9/12/2011, 05:33 PM
Cutting spending and raising taxes are both impossible. For one, middle-class Boomers, who likely comprise most of the conservative base, surprisingly want neither taxes raised or reforms in social security or medicare, since they largely benefit from these programs. Liberals, on the other hand, refuse to even talk about reforms at all, which is not good. Moreover, it seems that most democrats are also in the middle-class, and they, too, do not support tax increases on themselves. Both sides are the same.

I feel doomed (I'm just kidding I really don't).

I work for a small pharmaceutical company. For my small business, any tax breaks/subsidies that I can use to hire people are helpful, because I am more concerned about hiring people to grow the company than I am in putting money into my own pocket.

marfacowboy
9/12/2011, 08:36 PM
It's all public information. An audit done by the Postal Service's Office of Inspector General came up with $75 billion in pension overpayments. The Postal Regulatory Commission, an independent agency that received more autonomous power under PAEA, commissioned its own independent audit. The commission placed the overpayment at $50 billion.
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