Last month, the United States Postal Service (USPS) alerted the nation that due to their $9.2 billion deficit, they might collapse by next summer. More than half of that total is due to a health care fund for future retirees that must be paid annually. Speaking in front of the Committee on Homeland Security and Governmental Affairs, Postmatster General Patrick Donahoe declared that for the USPS to achieve sustainable standards by 2015, annual costs must be somehow slashed of $20 billion.
In return, Congress granted a six-week spending measure in the first week of October. The measure gives the USPS until Nov. 18 to decide how to find the funding for the pre-retirement plan.
Donahoe has already suggested that the elimination of this program is crucial for the survival of the postal service.
The White House responded with a proposal that agreed with many of the measures suggested by Donahoe, including the stoppage of delivery of mail on Saturdays. Other measures proposed include an expansion of current policies such as allowing the sale of more types products at posts offices and raising the current price of stamps again, which has already been bumped to 45 cents beginning next year. The White House also urged Congress to immediately give back $7 billion already paid by the USPS for future retirement and health care costs.
The House of Representatives then advanced a measure that concurred with the President’s assessment to end Saturday services, but further called for more policy expansions, such as the allowing of advertisements at post offices and on mail trucks, as well as a gradual phasing-out of most deliveries for personal mailboxes, in hopes of encouraging the use of neighborhood (or cluster) mailboxes.
The news came on top of July’s announcement from the USPS that a proposed 3,700 post offices nationally will be closing within the next year to cut costs. The USPS released a specified proposal of office closures the next month and, of the over 100 offices in California on the alleged chopping block, none are in Monterey County.
In September, a Federal Register notice from the USPS proposed plans to close over 300 processing plants while cutting around 35,000 jobs in the next twenty-eight months. The USPS has already phased out over 100,000 jobs since 2006.
As a self-funding entity (and therefore not a government organizations), the USPS has the burden of balancing its employee’s statuses as federal with the reality of relying on zero taxpayer dollars from the government.
On Oct. 13, the Government Accountability Office (GAO) released a statement declaring the USPS is not deserving of refunds (adding up to over $50 billion) that were allegedly overpaid into pension funds dating back many decades. The GAO declared that such payments added up to poor policy by the USPS and that a pseudo government bailout would not fix the systematic failures—or the immense debt—of the organization.
Plans to revamp the USPS are still very much up in the air. House Republicans, in a bill co-sponsored by congressman Darrell Issa (R-CA), are calling for a “super-board” capable of making all fiscal decisions, including the ability to terminate employees regardless of collective bargaining agreements.
House Democrats, however, are wary of a massive set of lay-offs in the middle of a possible double dip recession.
Donahoe has been trying to break free from the government-mandated Federal Employees Health Benefits Program, arguing that an independent health care system would be more affordable for the USPS. He estimates they would save up to 10 percent in annual costs with a separate system.