Post office expected to default on $5 billion payment

[pphilfran]

http://abclocal.go.com/wabc/story?se...rticle-8757555



WASHINGTON -- The U.S. Postal Service is bracing for a first-ever default on billions in payments due to the Treasury, adding to widening uncertainty about the mail agency's solvency as first-class letters plummet and Congress deadlocks on ways to stem the red ink.

With cash running perilously low, two legally required payments for future postal retirees' health benefits - $5.5 billion due Wednesday, and another $5.6 billion due in September - will be left unpaid, the mail agency said Monday. Postal officials said they also are studying whether they may need to delay other obligations. In the coming months, a $1.5 billion payment is due to the Labor Department for workers compensation, which for now it expects to make, as well as millions in interest payments to the Treasury.
The defaults won't stir any kind of catastrophe in day-to-day mail service. Post offices will stay open, mail trucks will run, employees will get paid, current retirees will get health benefits.


more at link

[badger]

I fully expect the next generation of retirees, not the current ones, to be screwed on all fronts, not just the USPS pensions, but other public and private pension systems, Social Security, etc.

However, by the time I retire, there won't be a retirement age, so it won't be a big deal.

[pphilfran]

They have nearly as many retirees as they do workers...I don't see how that could possibly be a problem...

[cccasooner2]

Dean's legacy.

[8timechamps]

Corporate America did away with pensions because of this very reason. Oh there may be a company here or there that still gives pension, but the majority stopped the process. I just don't see how the USPS can get through this.

[diverdog]

Corporate America did away with pensions because of this very reason. Oh there may be a company here or there that still gives pension, but the majority stopped the process. I just don't see how the USPS can get through this.

They did away with pensions to give bigger pensions to the guys at the top. GE is a good example.

[picasso]

The federal post office did not get to this position on their own.

[yermom]

they didn't build that?

[pphilfran]

they didn't build that?

Our leadership in DC did help them get in this position...

I haven't seen anything saying they failed to make the payment...wonder why the crickets?

[yermom]

they are going the way of the dodo. no one really needs to get mail now. it's not something that has that many legitimate uses anymore

[badger]

they are going the way of the dodo. no one really needs to get mail now. it's not something that has that many legitimate uses anymore

I disagree with you on one front: As shoppers try to stretch dollars and save money, a lot of foregoing local shops and making purchases online... which then requires that merchandise get shipped.

Netflix was once what I thought would save USPS, because it's old model relied on USPS delivery. Alas, they found a better way and are in the process of phasing out physical discs and mailing them.

But... I don't see online shopping getting any less popular, nor do I see online retailers going the route of Netflix (you can't digitally stream most of what they sell).

As for pensions, if the problem in the first place was separating CEOs from the little guy workers, then they are making the same mistake again by allowing existing employees to keep their pensions and the newer ones be subjected to 401K alternatives. Hmmmmmm...

[yermom]

USPS sucks for Amazon orders, etc... that's nothing that FedEx and UPS can't do better

[C&CDean]

I'm starting to get the picture now. Yermom's absent daddy was the mailman...

[pphilfran]

I'm starting to get the picture now. Yermom's absent daddy was the mailman...

lol

[olevetonahill]

USPS sucks for Amazon orders, etc... that's nothing that FedEx and UPS can't do better
Seems everything Ive ordered the last few months comes in the US Mail.

I pay most every thing with auto pay , or just log in and pay on line
Still 2 bills that I have to mail. Plus I receive a few payments by mail also.

The PO dont need to shut down, But I dont see a Prob with Consolidating some of em and cuttin back on stuff Like SATURDAY mail delivery

[yermom]

I'm starting to get the picture now. Yermom's absent daddy was the mailman...

look, Newman...

people don't send letters anymore, and lots of bills can be paperless now. i haven't bought stamps in years. like 5 maybe. it's just a fact that the average person doesn't send the same volume of mail that they used to. these aren't debatable ideas, they are facts.

the business model needs to change, or they will just become some government funded service

[cleller]

The postal service out here in the sticks gives me excellent service, better than UPS, and much better than FedEx. I admit it cannot be efficient, money wise, but it sure is dependable. Our decrease in letters, bills, etc has been more than offset by the amount we order, rather than try to drive many miles to try and locate.

[Lott's Bandana]

I know this is minutia and a bit sidetracked, but I do like the ability to print a pre-paid mailing label and stick it on a box, walk out and hand it to my mailman. (he's a man, so I called him one) Much better than going to the PO, or dropping off at Kinkos.

[8timechamps]

They did away with pensions to give bigger pensions to the guys at the top. GE is a good example.

Sadly, that's not too far off the mark. CEO, executive level management salaries/bonuses are out of control. Our near disaster with the banks didn't scare 'em enough either.

[C&CDean]

1. How you gonna get your OU tix without the USPS?

2. USPS "upper echelon management" make chump change compared to private industry. Look it up. In the private sector a CEO of a company the size/budget of the USPS would be bringing in a salary of several mil.

[pphilfran]

If I remember correctly they use Fed Ex for bowl games...

[pphilfran]

Their business model was based on growth...and once growth tanked due to the internet email and competition from UPS and Fed Ex they were screwed...very similar to the problems at GM and other big business...

Plus, they have nearly as many retirees as they do workers...

Then, add in Congress doing nothing and we get defaults...

Actually pretty simple....

[tulsaoilerfan]

For all the gruff the post office takes, i prefer them as a shipping method over UPS and Fed EX especially when shipping out of the US; their rates are usually cheaper and the stuff usually gets there in a fairly quick time frame

[8timechamps]

1. How you gonna get your OU tix without the USPS?

2. USPS "upper echelon management" make chump change compared to private industry. Look it up. In the private sector a CEO of a company the size/budget of the USPS would be bringing in a salary of several mil.

If you were referencing my post, I was talking about corporate CEOs. I have no idea what the USPS execs make, but I suspect it's a fraction of what their corporate counterparts earn.