U.S. Postal Service risks taxpayer bailout: GAO

[The Northerner]

Source: Reuters

(Reuters) - The U.S. Postal Service could be on its way to a taxpayer bailout unless it takes extreme steps to become financially viable, according to a congressional report released on Monday.

The Government Accountability Office (GAO) said the postal service faces "daunting financial losses" of more than $238 billion over the next decade.

The GAO said Congress should form a panel of independent experts to make recommendations that could include removing the requirement that mail be delivered within six days, reducing USPS' operations, and allowing it to do business in new, non-mail-related areas.

"If no action is taken, the risk of USPS's insolvency and the need for a bailout by taxpayers and the U.S. Treasury increases," the GAO said.

The USPS in February reported a loss of $297 million for the first quarter of its fiscal year, blaming the recession and the use of electronic mail. The USPS, which delivers nearly half of the world's mail, has posted net losses since 2007.

Read more: http://www.reuters.com/article/idUSTRE63B5X920100412

[nykym]

1. Why is it

that whenever some business, institution or government agency is at risk the only solutions they can come up with to stem the tide is cutting services and the work force? It is never about getting rid of the waste and drain at the top. These are the very people responsible for the state of affairs. Get rid of the problem. I have to be careful today - not in a good mood.

[KansDem]

4. I agree...

The recent spate of stories about teachers and custodians illustrates your point. We read that, in light of budget concerns, teachers are to be fired and the work of custodians is to be outsourced to private companies. Yet we never read of a school district getting rid of administrators!

It stands to reason that with fewer teachers and custodial work taken over by a third party, that fewer administrators are needed. Yet, none of them is laid off?

[prairierose]

2. The big question is....

how much does this have to do with the privatization that has gone on in the USPS especially in since 2000. We know that private contractors end up costing more than when a govt agency relied on civil servants.

[ixion]

3. The only group who "risks" on a bailout is the taxpayer.

period.

[Hosnon]

5. $238 billion over the next decade? That's hardly a financial problem.

Especially in light of the enormous amounts of money both parties spend on other non-essential things (e.g., Iraq). And calling it a "bailout" is b.s. because that word has recently only been used to refer to giving money to save irresponsible entities. The USPS has not been irresponsible, it's just getting bludgeoned by the 21st century.

[girl gone mad]

13. Precisely. Bail them out.

Millions of small businesses depend on affordable postal options and millions of people in rural areas have no other options.

[maleficentia]

6. How about replacing all of these people

http://www.usps.com/suppliers/howto/contractdelivery.htm

with real US postal workers and save some money

[FailureToCommunicate]

7. First force the Postal service to stop offering ridiculously low rates for junk flyer delivery

on behalf of businesses. That would go a LONG way to reducing that shortfall. It has little to do with "Saturday delivery"
Do that before coming begging to the taxpayers.

[radhika]

10. That bulk/junk mail subsidy has to go.....n/t

[Politicalboi]

8. I've said it before and I'll say it again

Charge a dollar for stamps. Mail should be rated like long distance phone calls. If it's local it's a dollar. If it's across the US it's $1.50 or $2.00. They could divide the US into 3 color codes for areas. The bad thing is we will have to learn where the states are. LOL! The good thing, the post office will be saved without a bailout, or with a much smaller one. And getting hand delivered mail is worth more than 44 cents.

[kirby]

9. Well...

In the age of moving around digital data, the fact that people are charged more for 'long distance' calls is absurd. Using that model for the postal service might make more sense since there is actually a difference in cost to transport the mail further whereas the 'long distance' charges have no connection to reality.

As far as 'getting hand delivered mail is worth more than 44 cents', well that depends. The concept of pricing mail is based on volume, if you get 10 pieces of mail delivered, that is $4.40 which is overpriced.

This whole scenario boils down to two issues:

1) People are using mail less because of online services. There is nothing wrong with this (better for the environment) and the postal service needs to adapt to this.
2) The main cost drivers are health care and pensions. We have failed to address the health care cost part and no one is talking about changing the pension structure.

One solution would be to allow the USPS to get into the competition with UPS/FedEx, but Congress forbids that.

[high density]

12. They do have zoned-based rates for Priority and Express mail.

I don't know if they'd want to make first class rates that complicated. The USPS just added the shape-based component of the first class rates in 2007 where there are different prices for first class letters vs. large envelopes or parcels.

[SocialistLez]

14. I can see your point

I sometimes don't see the point of paying x amount to mail something to a state over when the person next in line is mailing something to say NY or CA and yet we're charged the same price.

[SnakeEyes]

11. I disagree

I disagree with some of the things already said. The postal service is a still a vital service to many such as the elderly poor, or sick/injured/disabled. Some can't use phones, or at least not often, or the Internet for a variety of reasons and they are unable to travel distances; whether that be due to a physical limitation, knowledge, or cost. They rely on communication via the postal service. It's not their fault if the person on the other end of that communication lives far away rather than just across town. Therefore, since I can't see us pricing things based on wealth, the only fair way is to charge everyone the same price regardless of distance. While I realize it costs more to send to some places than others, and we essentially all cover that loss in taxes, that is the price that we sometimes have to pay to have fair government services.

[eppur_se_muova]

15. Right wingers beating up on the PO again, so it can be dismembered and privatized.

For some reason, the PO is expected to meet standards of efficiency and effectiveness that no other institution is held to. And every 1-cent increase in postal rates is treated like some disastrous calamity.

Looks like even the GAO has been compromised by Bu**sh** holdovers.