Post Office

U.S. Postal Service on the Ropes, May Go Down for the Count in 2013

Lost nearly $16 billion in last fiscal year


With driving like this, obviously health care is important.

The United States Postal Service announced today that it lost $15.9 billion last fiscal year (almost a billion more than projections) and will run out of cash in a year if something isn't done.

The post office has, as we all well know, been losing business for years to technological advancement and competition. Mail volume dropped 5 percent this last year. The post office is also notable in that it is required to fund its retiree health benefits in advance, and those costs are becoming an impossibility. Via Bloomberg:

Next year's loss forecast includes a $5.6 billion payment due to the U.S. Treasury for future retiree health benefits, [Postal Service CFO Joe] Corbett told reporters after the meeting. The 2012 loss includes the $5.6 billion payment to the fund that the service defaulted on Sept. 30, and the previous year's $5.5 billion obligation that was due Aug. 1 and also not paid. Because that year's payment was deferred, the 2011 loss doesn't include any pre- funding amount.

The Postal Service is still trying to get Congress to give them permission to stop Saturday deliveries and make it easier to close down post offices and processing plants. The postal service attempted to close around 3,700 post offices in May, but then backed down in the face of complaints. The Postal Service is also trying to convince Congress to let them spread out retiree health payments over several years rather than paying up front. I wrote about the Postal Service's health payments in May:

Prefunding mandates have been among the few successes in USPS management and could reduce unfunded pension liabilities nearly a third by the end of this decade. But the National Association of Letter Carriers is still hoping to "fully lift the onerous burden to fund decades of future retiree health benefits decades in advance," thus leaving future taxpayers to pick up the shortfall.

And it turns out a significant retirement fund shortfall has just been discovered. Bloomberg reports:

The service's outlook worsened this week, when the U.S. Office of Personnel Management said the service's projected surplus in a government-worker retirement account has fallen to $2.6 billion, less than one-quarter of the previous year's estimate, due to lower interest rates. It found another retirement account now has a $17.8 billion shortfall instead of a previously estimated surplus. The service has proposed tapping the surpluses to help cover its losses.

With such a retirement shortfall already, would the Postal Service be any more likely to keep up with those future health payments if the system were changed?

In June, interviewed postal workers on an (obviously unsuccessful) hunger strike to try to convince Congress to change the Postal Service's health funding rules:


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  1. The irony, of course, is that the U.S. Postal service is one of the very few federal government agencies that is actually REQUIRED by the U.S. Constitution and it is facing a money shartage while all of the UNCONSTITUTIONAL agencies are getting fat on the public dole.

    1. It’s not required; merely authorized by the Constitution.

      1. OK, you are right, for some reason I thought it was required and was looking it up and you are right Article I, section 8, Clause 7 authorizes Congress to “To establish post offices and post roads;” but still, it is ironic, they are being shortchanged but HUD, the Department of “Education”, the Department of Homeland Slavery et all are getting plenty of dinero.

        1. They are not being shortchanged — they are being outcompeted by, or replaced by, UPS, FedEx, and email.

          Open up the USPS to competition for all levels of mail, and they’d go out of business and be replaced by profitable competitors.

          1. “Open up the USPS to competition for all levels of mail, and they’d go out of business and be replaced by profitable competitors.”

            If only that would happen…

    2. make that shOrtage.

      1. I’ll bet all those fat agencies are getting plenty of shartage.

      2. One follows the other.

    3. No, I liked “shartage” better. It’s more fitting.

    4. And the USPS is no longer a federal agency. It used to be a regular federal agency, but then got spun off into a government-owned corporation with all the powers of federal govt (Postal Inspectors are the equivalent of FBI, etc) but none of the even limited accountability of a federal agency.

  2. It’s funny that the postal driver can’t drive, but what kind of idiot parks his garbage can in the way of the mailman?

  3. Sounds like a solid plan to me dude. Wow.

    1. “Sounds like a solid plan to me dude. Wow.”

      Interesting thought Annonbot, what aspect of the plan to you find to be the most solid? Are there any aspects of the plan that you do not find solid? I am interesting in input from other members of the group as well. Does anyone have any input on Annonbots observation?


  5. With such a retirement shortfall already, would the Postal Service be any more likely to keep up with those future health payments if the system were changed?

    Of course not. The plan is to beg for bailouts like everyone else. The obvious solution is to allow private companies to deliver mail and use mailboxes. Watch how fast that fixes the problem. I bet it would be a boon to the economy as well.

    1. I’m sure private agencies will be jumping to deliver letters to East Podunk, Montana for 45 cents.

      The purpose of the postal service is to make the mail cheap and universally available. The market won’t do that because it’s not profitable.

      1. The market won’t do that because it’s not profitable.

        Apparently, the government won’t be doing it much longer either for the very same reason.

        1. Doh! Beat me to it.

        2. The govt does a lot of things that aren’t profitable.

      2. The purpose of the postal service is to make the mail cheap and universally available. The market won’t do that because it’s not profitable.

        Lysander Spooner begs to differ. Someone will make it profitable.

        1. I’m partial to this proposal:


        2. Well, Tulpa has a point. Spooner’s mail company wasn’t going to deliver a letter to Montana for the same price as it would to New York. But the question remains whether we still need to subsidize that. There may have been an argument for it before telephones and the internet, but I don’t see much of one now.

          1. They still might get it for the same price, just not six days a week.

        3. Spooner was a question beggar.

          1. “The market won’t do that because it’s not profitable” is begging the question. How do you know it’s not profitable? Back when it was legal to compete, Spooner proved that it can be profitable.

            1. It was never legal to compete. Spooner was illegally, disobediently (heroically) running his mail service.

      3. It’s not profitable the way the post office is doing it. Who are you to know there aren’t alternative solutions that would work better?

        1. If only there was some way to send mail electronically.

          1. Do you have a newsletter to which I could subscribe?

          2. It’s not mail if it’s electronic.

      4. The market won’t do that because it’s not profitable.

        So privaitze the parts that are profitable and limit the government funded postal service to the remainder, funded by a universal service charge, like we do for phones and electricity.

      5. The market won’t do that because it’s not profitable.

        I would be willing to bet that someone could make a profit delivering mail pretty much anywhere. The price in some areas would be below 45 cents, in some places above 45 cents.

        Are you against private food stores because in places like Hawaii, they result in much higher prices than on the Mainland? Should we nationalize food growing and retailing because some places are expensive to do business?

      6. They may not deliver to every house in East Podunk, but they would deliver to a central location in the town where residents can come pick up their mail like every rural customer had to do at one time.

  6. They’re unionized, right?

    The Post Office is part of the 47%, and the president is pretending that raising taxes will mean another $1.6 trillion in government tax receipts over the next ten years.

    What do you think is gonna happen?

  7. Just watch, some kind of deal will be struck.
    IIRC, the post office only loses money on first class mail because those fees heavily subsidize all the advertising mail (all that stuff the PO gets sniffy about being called ‘junk mail’).
    How many big advertisers are going to want to fill mailboxes at a full rate?
    How many of them are well enough connected to insure that any proposed ‘opening up’ of postal delivery rules includes all the current subsidies and more besides?

    1. Mailbox rent seeking!!!

    2. Junk mail is not the part being subsidized. It is the one part of the operation that makes money.

    3. the post office only loses money on first class mail because those fees heavily subsidize all the advertising mail

      You’ve got it exactly backwards.

      1. First class mail is the only part of the USPS that they have a forcible government monopoly on. Everywhere else they are open to competition.

        ECON 101 should tell you which part of their business is subsidizing which in that situation.

        1. That was a response to K S, not onco. Onco got it right.

    4. First-class mail goes at higher rates because it is more expensive to process a bunch of Christmas cards thrown into the mailbox than it is to process the same number of presorted and palletted items.

  8. Fuck you, cut spending first

    1. No, fuck you! They need to cut spending first!

  9. If urban and suburban dwellers want to keep subsidizing rural hayseeds, redneck militia members, and other fly-over country free-riders, then we need to mandate using the mail or pay a penalty…I mean, tax… for every electronic communication we send. Or we could
    just charge them proportionally for the cost of delivery but, nah, that would be bad for the childrunz not to mention setting a bad precedent.

    1. Put a one cent tax per text on text messages and the USPS will be in the black in no time.

  10. Greens, at least, should be solidly in the “let it die” camp: how many tons of junk mail are produced, and delivered by the USPS, each year?

    1. Should be if they were consistent, but since they are part of the progressive coalition they have to buy into the whole government jobs program thing.

  11. Easy, make stamps $1 each and ban interstate e-mail. Problem solved.

    1. Also, mandate that everyone mail at least x number of letters/packages per year or else pay a penaltax.

      1. STFU, guys. They will take your suggestions seriously.

  12. Saturday seems like a bad day to cut. Why not, say, Wednesday? That way you’re never going more than a day (bar federal holidays) without mail delivery. Plus, Netflix is one of the main things keeping the Post Office anywhere near afloat, yes? Seems to me that most people would rather have their new movie come on Saturday than on Monday.

    1. Yuri, it’s been months since I’ve actually gotten a shiny disc from Netflix. Your viewing tastes may vary, but all my Netflix content is delivered over the wire these days. Redbox for those times when you absolutely, positively gotta have it now and it’s not available for streaming.

    2. Saturday seems like a bad day to cut. Why not, say, Wednesday?

      Because we’re talking about a government labor union. Guess which day is prolly time and a half pay, and thus cheaper to eliminate?

    3. Incidentally, the only reason UPS and FedEx do Saturday delivery is they have the USPS do the deliveries, hence why it costs more.

  13. Faster please. I’ve done everything I can to opt out of junk mail so these bastards die a quicker death. As it is, I only check my mail once a week because it is 95% junk, at least. One time, my mail goon left a note in my mailbox bitching me out for not picking my mail up in a “timely” manner or some such shit. I called the post office to confirm that mail delivery hadn’t been halted, and it turned out the fucker had illegally (according to postal rules) returned some of my mail to the sender without even fucking telling me! Fuck ’em.

    1. Same thing happened to me, except I didn’t get a note. They just stopped delivering my mail and I didn’t even notice for a couple of weeks.

    2. Dude, letting mail collect in your box makes your house look uninhabited and is an invite to thieves.

      1. I live in an apartment.

  14. The USPS is basically just a union based jobs program, so they’re not going anywhere under The One.

  15. I haven’t gotten mail for a week.

  16. WTF. Didn’t Kevin Costner solve this problem?

    1. Jack Nicholson, too.

  17. Just set the USPS free entirely. End the pension mandates and let other companies compete in first class mail.

  18. So is this because of a failing business model, or is the government at large still pilfering the growing surplus fund that they had a decade and a half ago?

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