Saturday, February 11, 2012

An Update on the Post Office Financial Mess

Post Office Loss Widens to $3.3 Billion provides a timely update of how fast the U.S. postal service is running out of cash.

As a result, our vigilant and diligent elected officials may be forced to do something prior to November's election. My guess, however, is they'll find a way to avoid facing any hard choices anytime soon.

Maybe they'll decide to study the entire issue some more. That's always a good way to avoid reality and waste more taxpayer money in the process.

Even if they do something, however, the politicians will make every effort to not make too many waves ahead of the upcoming election. Of course, that means the taxpayers will continue to pay the bills while the politicians keep kicking the can down the road.

Quoting from the above referenced article, here's the latest on the post office financial mess:

"The U.S. Postal Service on Thursday (February 9) posted a $3.3 billion loss for the latest quarter and projected it would run out of cash in October as its fiscal woes continued to deepen.

"Those losses cannot continue, or we will not be able to sustain the business," Chief Financial Officer Joe Corbett said. . . .

Declining volumes of first-class mail, the Postal Service's primary profit driver, also contributed to the loss in the latest quarter, which is typically the agency's most profitable.

Postmaster General Patrick Donahoe has proposed an overhaul that would allow the Postal Service to cut $20 billion in annual costs by 2015, but the agency requires Congressional approval to make many of those changes.

Closing as many as 3,700 post offices, ending Saturday delivery and allowing the Postal Service to withdraw from the federal health-care system and create its own, are among the proposed money-saving moves.

Even if the agency is again allowed to postpone more than $11 billion in mandated health-care prefunding payments, the Postal Service will still likely hit its $15 billion debt ceiling this year, and no longer be able to borrow from the Treasury, Mr. Corbett said.

If it does hit this borrowing limit, and can't find other sources of revenue or cost savings, it could delay payments to vendors, and then workers. As a government agency, the Postal Service can't file for bankruptcy protection, and taxpayers are ultimately on the hook. . . .

"A business that is this vital to the U.S. economy should not be in this position," he said."

My question is this; why is the postal service so vital to the U.S. economy? Other than politically because it's highly visible and employs ~500,000 people, it's not at all vital to our economy.

In fact, it's not even important. And in no way is it a good deal for taxpayers. But let's continue:

"Several bills pending in Congress propose to reform the Postal Service, but progress has been slow as some lawmakers are reluctant to relieve the agency from retiree obligations and others are wary of mass closures of post offices and processing centers.

"If we do nothing, our nation could face a future without a Postal Service," Sen. Tom Carper (D., Del.) said Thursday in a statement. Mr. Carper has put forth a proposal that he says would allow the agency to avoid insolvency, however gaining support in both the House and Senate could be difficult in an election year."

I say let's face the future without the government backstopped post office and save the taxpayers from wasting more of their hard earned money.

But that won't happen as long as the politicians of both parties are afraid to risk voter backlash, especially in a presidential election year.

I interpret that to mean that the politicians believe the voters enjoy wasting taxpayer money if the alternative is the layoff of government workers. At least that's the way the politicians seem to be thinking. Either that or they don't want to alienate the unions.

But let's vote on this. Then if we the people decide to waste billions and billions of dollars each year to keep the postal workers employed, that's ok with me.

But first, let's allow we the people to decide what we want to do with MOM money.

Do we choose to continue to waste it or instead keep it and spend or invest it as we each see fit?

Then after we the people decide, we can quit talking about it and move on.

After all, it's only money. Either OPM or MOM.

Thanks. Bob.

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