The future isn’t looking so bright for the United States Postal Service, which continues to suffer severe financial losses. During the first half of this year the USPS declared a net loss of $2.6 billion compared to $1.9 billion in losses last year. Closing locations and cutting jobs are some of the agency’s aggressive moves to cut costs. However, USPS expects to lose another $8.3 billion in fiscal 2011. With nearly 80 percent of the agency’s costs accounting for personnel the Postal Service could very likely be unable to cover payroll for the upcoming term, unless Congress takes a stand.
Addressing the Mailers’ Technical Advisory Committee last month, USPS chief financial officer Corbett said: “The Postal Service can’t achieve a profitable situation without legislative change.” He continued to say that in the event that cash reserves are depleted, the Postal Service would prioritize payment of its employees, followed by suppliers, but that other contractors might not be paid.
The Senate’s leaders on postal issues propose to let the Postal Service dip into the federal civil service retiree fund for the next several years. This would help the USPS afford future payments for retiree health and worker compensation. The Senate’s authority on postal issues, Sen. Thomas R. Carper, consider this appropriate action because the Postal Service had overpaid the federal civil-service pension fund by nearly $50 billion in recent years. Senator Carper’s bill also specifies a five-day delivery plan that would eliminate Saturday delivery.
With the Postal Service now leaning on Congress to resolve the financial crisis through pension and healthcare financing reforms as well as ridding of Saturday deliveries, what possible outcome can be expected? According to Post and Parcel reports: “Mail industry experts have warned that Congress may have too many distractions from the overall federal deficit to worry about the situation at the Postal Service.” What do you think about the worsening situation and potential shutdown of post offices? Would you support the elimination of Saturday delivery if it saved the United States Postal Service? Please share your opinions in the comments field below.