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Rain? Snow? Try $5.5b in debt [US POSTAL SERVICE]

override367override367 Registered User regular
edited September 2011 in Debate and/or Discourse
The United States Postal Service
1775-2011(?)

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The Post Office, we all know it, many of us hate it, and chances are if you're a denizen of the interwebs you barely use it. The Post Office is $5.5 billion in the hole, and on the verge of defaulting.

Now to say nothing of how catastrophic piling a few hundred thousand more job losses onto the pyre of quazi-depression would be, what would this mean for America?
Should we have a Post Office at all?
Is the Republican Party right that it should be done away with because it proves the government can't run anything?
Do we not have a duty to the citizens that rely on it?

After all, the Constitution seems to think so
Wikipedia wrote:
Article I, Section 8, Clause 7 of the United States Constitution, known as the Postal Clause or the Postal Power, empowers Congress "To establish Post Offices and post Roads".

These days we're so quick to argue about what powers Congress does or does not have, shouldn't we stick up for the ones it explicitly has? Can we not afford this?

Personally, I think the Postal Service does and will for the foreseeable future have a vital role in America. Keeping track of people's addresses and providing an easy way to change your contact information so that important business can find you seems like an essential service. Every first world nation has a post office, is America really so poor we can't have one? It seems laughable to me to expect the post office to be self sufficient while providing the service they provide (John Stewart likened it to a defunct business in New York where men on bicycles would go retrieve any item you could think of at any time and spirit it to your house unbelievably fast).

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Posts

  • ArchonexArchonex Registered User
    edited September 2011
    At this point, given the Republican's propensity to sabotage shit just to make issues out of it, and then scream "THIS IS WHY WE NEED SMALL GOVERNMENT" after they further fuck it up, I would not assume that they are right at all about not needing the post office system.

    Furthermore. This is one of the main ways most older people keep in contact with the rest of the world. The internet is not so pervasive that we can magically have packages or letters mailed to our doorstep through cyber-pixels or something.

    Hell, what do people think the alternative is? A million tiny privately run post systems? A bunch of big ones (An inevitably if it becomes commercialized.) that may not want to do business with certain companies, limiting where/when/how you can get the post?

    Edit: I don't know why the forums are somehow merging my replies and edits, but it's the second time this has happened today, and it's starting to tick me off.

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  • DoctorArchDoctorArch Curmudgeon Registered User regular
    The post office as it currently stands is an institution of a bygone era. People rarely send letters through the post office anymore. That is not to say that there isn't a place for the old USPS, there certainly is. But it has an infrastructure and labor pool primarily meant to handle something that simply isn't needed like it used to be.

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  • override367override367 Registered User regular
    DoctorArch wrote:
    The post office as it currently stands is an institution of a bygone era. People rarely send letters through the post office anymore. That is not to say that there isn't a place for the old USPS, there certainly is. But it has an infrastructure and labor pool primarily meant to handle something that simply isn't needed like it used to be.

    I use the post office to mail things all the time, for vital records and whathaveyou the internet just doesn't cut it for a lot of jobs. I work for a college and every semester I have to mail the central office a pile of documents to keep working.

    Now this isn't true for the bulk of America, but certainly for a lot of it I would imagine?

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  • DoctorArchDoctorArch Curmudgeon Registered User regular
    From 2007 to 2010 mail volume dropped from 212 billion pieces of mail to 167 billion pieces of mail each year. That is a bigass decline in mail volume.

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  • override367override367 Registered User regular
    The post office employs close to a million people, should we just fire half of them and call it a day?

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  • DoctorArchDoctorArch Curmudgeon Registered User regular
    Anecdotal experience/lol but the last time I used the mail to mail a letter was to send a thank you letter post job interview, and that was only because I was told that e-mail isn't yet accepted for the practice.

    However, I do use the mail frequently for mailing packages and receiving netflix and magazines.

    I want the USPS to stick around, absolutely, but that mail volume I cited above is going to keep dropping until it reaches items that still, and for the foreseeable future, will continue to travel through the mail, and this doesn't even take into account the almost 6 billion per year that the USPS is required, by law, to deposit into its employee's retirement accounts.

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  • MazzyxMazzyx A Restoration through Revolution. Registered User regular
    edited September 2011
    DoctorArch wrote:
    From 2007 to 2010 mail volume dropped from 212 billion pieces of mail to 167 billion pieces of mail each year. That is a bigass decline in mail volume.

    Yes a sharp decline, I want you to sit and think how much 167 billion pieces of mail is. Ten also think of where it is sent, not just in urban districts. Rural counties and such. The post office is an important part of the infrastructure and even I use it all the time. And I live most of my life on the internet.

    Till the internet is as secure and dependable in all ways as paper mail, especially with records then the post office will be required. And that isn't even including its other jobs such as address registration and such.

    Edit:If no one pointed out, I was going to point out that only the Postal Service has to put 6 billion into a retirement fund by law. No other part of the government has to do this. And it was designed in a way to help speed up the post office in going under.

    Mazzyx on
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  • shrykeshryke Member of the Beast Registered User regular
    DoctorArch wrote:
    From 2007 to 2010 mail volume dropped from 212 billion pieces of mail to 167 billion pieces of mail each year. That is a bigass decline in mail volume.

    Yes, but what you are missing is that the majority of that drop is almost certainly the more frivolous stuff.

    As email and the like replaces regular mail for casual communication, the stuff delivered by the post office, by percentage, actually becomes more vital. Because that's all that's left.

    Bills, notices, checks, etc.

  • enc0reenc0re Registered User regular
    I have no problem with the government running a postal service. But there are some bits that bother me:

    1. The monopoly. Many other countries have opened their postal service to competition and it has not spelled doom.
    2. The number of offices. Why are there so many post offices in my town when FedEx and UPS have only one each. Consolidate.
    3. The USPS should be able to set its own prices instead of having to go to Congress.
    4. I've been to countries where you can put a 'No Spam' sticker on your mailbox and then the postal services won't deliver junk mail to you. I want that here. Junk mail is such a waste of resources.

  • IncenjucarIncenjucar QA Tester -> Game Producer Seattle, WARegistered User regular
    We do need a postal service, just not necessarily at the current size. A lot of businesses rely on huge amounts of physical mail for things like contracts. I imagine a lot of their efforts go to dealing with stacks of junk mail - perhaps they could charge the hell out of junk mail distributors? Anything that advertises products or services?

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  • BagginsesBagginses __BANNED USERS regular
    I don't think the USPS has an enforced monopoly. Fedex just can't compete on small shit.

  • mcdermottmcdermott Registered User regular
    enc0re wrote:
    I have no problem with the government running a postal service. But there are some bits that bother me:

    1. The monopoly. Many other countries have opened their postal service to competition and it has not spelled doom.
    2. The number of offices. Why are there so many post offices in my town when FedEx and UPS have only one each. Consolidate.
    3. The USPS should be able to set its own prices instead of having to go to Congress.
    4. I've been to countries where you can put a 'No Spam' sticker on your mailbox and then the postal services won't deliver junk mail to you. I want that here. Junk mail is such a waste of resources.

    I don't know about elsewhere, but around here they are consolidating. My town has three post offices, but only one actually operates as such now....the other two are strictly retail counters and po box drops.

    And they can't peel back to ups/federal size because they deal with more volume. I receive packages from the other carriers maybe eight times a month. I receive mail every single day they deliver, 26 days or so a month. Even discounting junk, i get 'real' mail at least 15 days a month or more.

  • mcdermottmcdermott Registered User regular
    Bagginses wrote:
    I don't think the USPS has an enforced monopoly. Fedex just can't compete on small shit.

    Not other carrier is, to my knowledge, allowed to place letters on a mailbox. Letters are not easily left on doorsteps like boxes.

  • override367override367 Registered User regular
    enc0re wrote:
    I have no problem with the government running a postal service. But there are some bits that bother me:

    1. The monopoly. Many other countries have opened their postal service to competition and it has not spelled doom.
    2. The number of offices. Why are there so many post offices in my town when FedEx and UPS have only one each. Consolidate.
    3. The USPS should be able to set its own prices instead of having to go to Congress.
    4. I've been to countries where you can put a 'No Spam' sticker on your mailbox and then the postal services won't deliver junk mail to you. I want that here. Junk mail is such a waste of resources.

    In our current economy even if all the post office did was write letters and then bury them it would be a mistake to do this right now if you ask me

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  • Pi-r8Pi-r8 Registered User regular
    The thing is, they're not actually in debt. Their current income matches their current expenses. The "oh my god scary budget deficit" comes because of a bullshit requirement that they pre-fund their healthcare costs 75 years in advance, and because USA healthcare costs are projected to rise to LOL levels in 75 years. They're literally saving money for workers that haven't even been born yet.

    I say, drop the 75 year requirement, and then re-absorb them into the federal government, instead of making them be a private entity.
    (I wrote a petition about it here: http://forcechange.com/4262/save-the-u-s-postal-service/

  • override367override367 Registered User regular
    Wow that is pants on head retarded, mostly because it is impossible for our health care to rise at current rates for even a decade let alone 75 years. The entire healthcare system will collapse before we hit that level (first from all the insurance companies ceasing to exist and then from hospitals breaking under the weight of uninsured patients)

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  • CalixtusCalixtus Registered User regular
    mcdermott wrote:
    Bagginses wrote:
    I don't think the USPS has an enforced monopoly. Fedex just can't compete on small shit.

    Not other carrier is, to my knowledge, allowed to place letters on a mailbox. Letters are not easily left on doorsteps like boxes.
    Wait, is that the end-user kind of mailbox, the one in my own driveway, or is it the collection boxes where you place outgoing mail?

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  • King RiptorKing Riptor Registered User regular
    The post office needs to restructure. I think first and foremost They need to hire someone who knows how to run it as a business in 20 years paper mail will probably be a distant memory and this is the bulk of their buisiness. The goal should be to turn the post office a viable government run option to UPS and Fed ex. Offer tax incentives to people and companies that Ship using it and use that offset slightly higer rates. Make deals with Amazon and company to be the exclusive shippers for t heir products. Things like that.

    And just drop weekend delivery. Lord.

  • tyrannustyrannus Registered User regular
    edited September 2011
    Even if they, like start to reduce the numbers of days they service, which would require asking Congress, or start closing down facilities that are accumulating high maintenance costs, most of their costs are from compensation and benefits. These benefits include them paying 100% of employee life insurance and 80% of the health benefit premiums, versus other Federal agencies that give lower percentages for each. Negotiation of benefits is not something that would come easily. Another problem is that the decline in mail volume is projected to remain that low for a few years. So if costs continue to grow and their revenues don't increase, it'll be much harder to cover their operating expenses.

    I am not advocating layoffs, though, just maybe tone it down a bit temporarily? Oh and ask Congress to revise the funding requirements for the retirees
    edit: oh, they did

    USPS has experienced a cumulative net loss of nearly $20 billion over the last 5 fiscal years, including an $8.5 billion loss in 2010, and a net loss of $5.7 billion in the first 9 months of fiscal year 2011. USPS does not now have—nor does it expect to have—sufficient revenue to cover its costs without legislative changes. To conserve cash, USPS discontinued making its employer’s contribution for the defined-benefit portion of the Federal Employees Retirement System (FERS) in June 2011, which it estimated would reduce its costs by about $800 million this fiscal year. USPS has said that mail volume decline has outpaced even its most pessimistic forecasts

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  • Pi-r8Pi-r8 Registered User regular
    edited September 2011
    The post office needs to restructure. I think first and foremost They need to hire someone who knows how to run it as a business in 20 years paper mail will probably be a distant memory and this is the bulk of their buisiness. The goal should be to turn the post office a viable government run option to UPS and Fed ex. Offer tax incentives to people and companies that Ship using it and use that offset slightly higer rates. Make deals with Amazon and company to be the exclusive shippers for t heir products. Things like that.

    And just drop weekend delivery. Lord.
    If they "ran it like a business" then they'd just shut down delivery to every rural location. There's a reason that fedex doesn't deliver to Bumfuck, Alaska. That would definitely save them money, but it would completely defeat the purpose of having a national post office.

    And, like I said before, they're not even losing money right now. This is entirely a healthcare/accounting issue.

    Pi-r8 on
  • tyrannustyrannus Registered User regular
    edited September 2011
    Actually, they're losing money. Their revenues are no longer covering their controllable operating expenses as of the current period.

    http://www.prc.gov/Docs/75/75095/USPS Preliminary Financial Information. (Unaudited) .pdf

    tyrannus on
  • Pi-r8Pi-r8 Registered User regular
    edited September 2011
    tyrannus wrote:
    Actually, they're losing money. Their revenues are no longer covering their controllable operating expenses as of the current period.

    http://www.prc.gov/Docs/75/75095/USPS Preliminary Financial Information. (Unaudited) .pdf

    Look at the "year to date" column. It's positive.

    admittedly, not by much, but they're not supposed to earn a profit.

    Pi-r8 on
  • tyrannustyrannus Registered User regular
    Which number are you referring to? SPLY means Same Period Last Year

  • Pi-r8Pi-r8 Registered User regular
    tyrannus wrote:
    Which number are you referring to? SPLY means Same Period Last Year
    I was looking at SPLY. So, ok, yeah, this year they're expected to lose $134 million, but last year they earned $315 million. Not a big deal.

    The number that people are worried about is the $4.5 billion that they're socking away each year for the "postal service retirement health benefit fund".

    oh my god can we pleeeeeaaaaase have socialized medicine already?

  • tyrannustyrannus Registered User regular
    edited September 2011
    No no, see, that was according to their budgeted amount, their plan. Their actual operating loss is to the left of that number.

    Which, apparently, looks like that their most pessimistic projections of revenues wasn't pessimistic enough.

    tyrannus on
  • Pi-r8Pi-r8 Registered User regular
    Hmm ok. Looking at it again, you're right.
    Still, according to this: http://www.huliq.com/10061/post-office-wants-pension-reform-cut-85-billion-deficit
    Most particularly, Donahoe cited a federal regulation instituted in 2007 that "...required the Postal Service to pre-fund retiree health benefits (RHB) in amounts of approximately $5.5 billion per year." There is no other entity in the federal bureaucracy that must abide by similar rules. There is a direct correlation, said Donahoe between the Postal Services' budget woes and the institution of the rule on RHB.

    Audited financial results for the four years prior to RHB taking effect show the USPS running in the black. But for the requirements of the RHB, the Postmaster General insists the Postal Service would still be running within its budget and showing revenue above and beyond that.
    So even if they're showing a small loss this year in operating income, the real problem is still the health benefits.

  • tyrannustyrannus Registered User regular
    edited September 2011
    yep! you can get a better look at the breakdown of expenses on the third page of those financial statements. The big noncontrollable part of expenses? the PSRHBF Expenses? That's the Postal Service Retiree Health Benefits Fund.

    here's an interesting report from the GAO

    http://www.gao.gov/new.items/d11926t.pdf Actions Needed to Stave off Financial Insolvency

    tyrannus on
  • mcdermottmcdermott Registered User regular
    Calixtus wrote:
    mcdermott wrote:
    Bagginses wrote:
    I don't think the USPS has an enforced monopoly. Fedex just can't compete on small shit.

    Not other carrier is, to my knowledge, allowed to place letters on a mailbox. Letters are not easily left on doorsteps like boxes.

    Wait, is that the end-user kind of mailbox, the one in my own driveway, or is it the collection boxes where you place outgoing mail?

    The end user mailbox. UPS and Fedex are not allowed to touch it. That's why, even if a parcel could fit inside the mailbox (such as with larger rural mailboxes), they cannot leave it there...they must leave it at your door, or elsewhere. Mailboxes are reserved for the USPS alone.

    Also, I didn't know this, but there is also an explicit law forbidding any other company from carrying letter mail as well. So yes, the USPS does have an official, government-enforced monopoly on carrying mail (with narrow exceptions).

  • LilnoobsLilnoobs Alpha Queue Registered User regular
    I don't want to see the Post Office go. What'll happen after? UPS and Fedex take over, raise prices, and then have a gentleman's agreement (price fix)? Yeah, no thanks. Tax me if it means keeping the damn Post Office.

  • tyrannustyrannus Registered User regular
    edited September 2011
    Allow USPS to prefund the CSRS and FERS pension programs at 80 percent of their liability:

    The USPS OIG proposed reducing the prefunding target for CSRS and FERS from 100 percent to 80 percent so that USPS could meet its obligation while conserving cash and improving its financial condition. According to the USPS OIG, if USPS implemented this change in prefunding, it would save $51.4 billion.

    Using a funding target of less than 100 percent can have the effect of passing along costs of current services to future ratepayers.

    tyrannus on
  • Pi-r8Pi-r8 Registered User regular
    edited September 2011
    Yglesias had a really great post about the post office monopoly here: http://thinkprogress.org/yglesias/2011/08/12/294771/the-usps-is-an-aging-dinosaur-thats-also-subject-to-some-unfair-accounting-rules/

    Basically, the extra money they get from having a monopoly makes up for the money they lose by being a public service. Also, they don't get any tax money.

    Pi-r8 on
  • mcdermottmcdermott Registered User regular
    To be clear, I wasn't arguing against the monopoly, just making it clear that they had one. It's pretty obvious that, to provide universal service, the monopoly is pretty much required...at least as long as you're also expecting them to function as a "business."

  • SanderJKSanderJK Crocodylus Pontifex Sinterklasicus Madrid, 3000 ADRegistered User regular
    That health care fund will weigh on them more and more as the volume continues to shrink faster than their retirees die off. It seems somewhat similar of what just about killed the US auto-industry... who thought up these rules?

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  • ronzoronzo Registered User regular
    SanderJK wrote:
    That health care fund will weigh on them more and more as the volume continues to shrink faster than their retirees die off. It seems somewhat similar of what just about killed the US auto-industry... who thought up these rules?

    It happened in 2007 right?

    Wild guess here: Republicans

  • Pi-r8Pi-r8 Registered User regular
    edited September 2011
    SanderJK wrote:
    That health care fund will weigh on them more and more as the volume continues to shrink faster than their retirees die off. It seems somewhat similar of what just about killed the US auto-industry... who thought up these rules?
    It says that the $5.5 billion dollar health care requirement was instituted in 2007. So I'm gonna go ahead and blame that on the Bush administration. Along with the recession, and the general increase of health care costs.

    Pi-r8 on
  • AngelHedgieAngelHedgie Registered User regular
    edited September 2011
    Pi-r8 wrote:
    tyrannus wrote:
    Actually, they're losing money. Their revenues are no longer covering their controllable operating expenses as of the current period.

    http://www.prc.gov/Docs/75/75095/USPS Preliminary Financial Information. (Unaudited) .pdf

    Look at the "year to date" column. It's positive.

    admittedly, not by much, but they're not supposed to earn a profit.

    And again, if the USPS (a) wasn't forced into an absolutely ludicrous pension prefunding system and (b) was allowed to raise their rates (you know, just like those other shipping companies do when their costs rise), there wouldn't be a problem.

    This is yet another GOP manufactured "crisis".

    Edit: And remember that both FedEx and UPS use the USPS for last mile service when it's cheaper to outsource it to them.

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  • override367override367 Registered User regular
    I don't think this crisis is going to help the GOP... well wait I forgot the Dems have no ability to communicate absolutely anything to the public

    This is entirely congress' fault and the GOP has been hooting that they own Congress for a year now, this is entirely their mess and the people most affected by closures will be Republican voters

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  • enlightenedbumenlightenedbum Registered User regular
    The USPS provides a pretty amazing service that is moderately less amazing with widespread internet access, but still pretty damn amazing. The GOP is, as usual, full of shit.

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    Loose: about to slip, to release (Ex: "That knot is loose." "Loose arrows.")
  • ronzoronzo Registered User regular
    I don't think this crisis is going to help the GOP... well wait I forgot the Dems have no ability to communicate absolutely anything to the public

    This is entirely congress' fault and the GOP has been hooting that they own Congress for a year now, this is entirely their mess and the people most affected by closures will be Republican voters

    They may own Congress, but they've spent the last 3 years talking about how everything is Obama's fault. So they let anything and everything that is bad happen, because they won't get blamed. Obama will.

  • BlackDragon480BlackDragon480 Registered User regular
    edited September 2011
    I wonder if a lot of the current fiscal woes of the USPS would/could've been avoided if it had remained a Cabinet level department of the government (which Nixon put the kiebosh on in 1971) , instead of the semi-private cluster-fuck (Reagan semi-privatized it in the early 80's, cutting it off from tax revenue) of a federally owned corporation that it is now?

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