Source: Post office nears historic default on $5B payment – The Denver Post. Government agencies have a well-earned reputation of moving slowly in response to changes. I think the Post Office is a prime example of that. Here are some words from the source article indicating that molasses movement.
FedEx and UPS and the Internet seem to be making the Postal Service obsolete.” Banks are promoting electronic payments, citing in part the growing uncertainty of postal mail. The federal government will stop mailing paper checks starting next year for millions of people who receive Social Security and other benefits, paying via direct deposit or debit cards instead. First-class mail volume, which has fallen 25 percent since 2006, is projected to drop another 30 percent by 2016.
The Postal Service originally sought to close low-revenue post offices in rural areas to save money but after public opposition agreed to keep 13,000 open with shorter operating hours. The Postal Service also is delaying the closing of many mail processing centers, originally set to begin this spring. The estimated annual savings of $2.1 billion won’t be realized until the full cuts are completed in late 2014.
Graham acknowledges her postal branch could probably get by if it were open just 6 hours a day, but believes that a bigger cut would be “suicide” for the town because of the role it plays as a community gathering place. “That’s a real concern. So I just tell people, write more letters, buy more stamps,” she said.
All of the trends above were very obvious years ago but seem to have been ignored by the USPS. If they had been addressed much earlier things would be very different for all those federal workers. One of the major problems with the Post Office is that its decisions are generally made by congress and no congressman wants to face the ire of their electorate by consolidating services within his/her district.
The $5 billion payment in the source article is to put money in to support the pension fund for all the postal retirees. We know that generally federal government employees get more lucrative pensions than the private sector so that is part of their problems. Just too many promises that were in the future when they were made but now have come due. That is a typical government solution to put off current expenses by promising future benefits but in this case the chickens have come to roost.
Maybe it is time to put the post office out on its own to see if it can survive. If not there are probably several private sector businesses willing to fill the necessary gaps. I know I sound like a Republican here but this is one of those cases where I think they actually got it right.