The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified."
– President Barack Obama, Inauguration, 1/20/09
So, what could go wrong? After all, we have this fine ongoing governmental sponsored enterprise that is but a smidgeon compared to healthcare, right (emphasis mine)?
The U.S. Postal Service lost $8.5 billion in fiscal 2010 despite significant work hour reductions, and the agency could find itself out of cash in 2011, officials said on Friday.
During a board meeting, Postal Service leaders reported losses of $6 billion last year, plus $2.5 billion in workers’ compensation liabilities, despite lower operating expenses and workforce cuts. USPS lost less than half that total — $3.8 billion — in fiscal 2009.
Chief Financial Officer Joseph Corbett said the Postal Service was able to fulfill its financial obligations in 2010 thanks to higher revenue and reduced costs, but noted workers’ compensation and requirements to prefund retiree health benefits at more than $5 billion annually were out of the agency’s control.
It has been said that the USPS is in the same position as what GM was: a company whose main business was about health and human services that dabbled in selling plastic and steel. In the case of the USPS, substitute in paper. Both have been saddled with high union costs, burdensome work rules, and the dead weight of governmental oversight. And we wonder about the results?
Amtrak continues to exist ONLY because of infusions of taxpayer subsidies. GM was rescued only with taxpayer money. USPS will…
…require, like Amtrak, massive taxpayer bailouts in order to survive.
"We expect to go through the year with significant cash to continue operations, but we don’t plan to have sufficient cash to pay all our obligations, including the $5.5 billion retiree health payment at the end of the year," Corbett said. He noted USPS will do everything possible to meet its financial obligations but still will require fundamental organizational change.
The Postal Service in 2010 cut 75 million work hours, including a 10.6 percent decline in mail processing and a 10.1 percent drop in customer service hours. The agency has eliminated the equivalent of 105,000 full-time employees since 2009 and plans to take out almost 50 million additional work hours in 2011. Corbett said he expects growth in mail volume for the first time in four years, but noted USPS will have to manage the increase with fewer people. Labor costs account for nearly 80 percent of the agency’s expenses…
…"This latest historic loss by the U.S. Postal Service is disappointing, but not surprising given the serious financial peril in which it currently finds itself," said Sen. Tom Carper, D-Del. "If corrective action is not taken quickly, the Postal Service will likely run out of cash and borrowing authority by this time next year, placing its ability to continue operations in serious jeopardy. This report underscores the urgent need for Congress to move swiftly to consider comprehensive postal reform legislation … in order to avert a catastrophe for the Postal Service."