US Postal Service warns it could default

[PoliticAverse]

Source: AFP

The US Postal Service warned on Friday that it could default on payments it owes the federal government, just days after the US government itself narrowly averted a default.

The government's mail service said it lost $3.1 billion in the period from April to June, blaming "the anemic state of the economy" and the growing popularity of electronic communications over old-fashioned letters.

As a result of its mounting losses, the US Postal Service said it would not be able to make a legally required $5.5 billion payment in September to a health-benefits trust fund.



Read more: http://news.yahoo.com/us-postal-warns-could-default-222059604.html

[goforit]

1. unfuckingbelievable

[roguevalley]

13. Its okay. Paris Hilton and Donald Trump get their tax cuts direct

deposit.

[ejpoeta]

2. dominoes anyone?

[defendandprotect]

3. Why isn't Post Office competing with FED EX ...?

[russspeakeasy]

16. They don't know how. .

They sold their future with the "forever" stamp
Kind of like Borders selling their e books to amazon. :wtf:

[defendandprotect]

19. Sounds like someone is keeping them stupid? Who has been running PO except foxes ... ???

It was the RW intention to destroy the PO and they've been doing it back 20 or more

years now --

Lots of PO property that would be very attractive in a government fire sale!

Isn't Borders in bankruptcy or sold?

Imagine Barnes & Noble will be next -- not because people don't want books -- but because

books -- like art -- are a threat to the RW --

[IthinkThereforeIAM]

25. Yes, longer than 20 years though...

... ever since Reagan they have been trying to get/abuse the USPS mandated accounting system, that of breaking even over time, as in 3 year plan, or 5 year plan. Whatever the Postal Board of Governors decided upon. And since that time, more and more mega corp executives were put on the board, they started finding ways to finangle, one way or another, the "profits" which are meant to be saved to cover for later years (and keep postage rates stable) in the respective plan. Forcing to prepay retirement funds shows how emboldened they have become in their quest to privatize more of our services.


Former USPS employee (1985-97)

[defendandprotect]

26. The stress on postal workers has been extreme over this time --

And increasing postal rates, of course, causes annoyance among citizens --

and leads them to think that the PO is wasting money --

Of course, Congress knows all of this -- and its time that DU wakes up to the

fact that the Repugs haven't done this all alone!!


If we want to turn this government right side up again, they have to understand

that and overturn this entire Congress --


And thank you for the info -- more DU'ers need to understand this -!!


:)

[christx30]

35. That...

and the OP was right. Why should I send someone snail mail over 4 days when I can send an email instantly? And why should I spend money on a stamp when I can pay my bills online? And why should I get junk mail in my mailbox and have to throw it away or recycle it when I can just hit delete?
I don't use the USPS. Haven't mailed anything out in years. It's not effecient. I know a lot of people have to use it because they don't have Internet. But I'm not buying stamps. And I'm not the only one. It's a big part of what's going on with the USPS.

[defendandprotect]

36. Evidently you didn't read the post I was replying to ....

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4949703&mesg_id=4949941

No one is recommending a return to snail mail --

though remember that the convenience of paying your bills on line also comes with

a hackable computer network!

I don't know anyone who doesn't get junk mail -- whether or not you also get e-mail.

The PO is also about packages -- and people still mail gifts and companies still mail

products to customers -- and companies rely these days on express mail services.

THOSE are the areas where the PO is being prevented from competing -- and if look at

the link, you'll see how they have been prevented from competing.

And for whose benefit? Only elites who want to privatize mail services and get the PO

out of the way of their profits.

[nadinbrzezinski]

24. They are... it gets better

Fedex also uses the PO.

But they are.

No this was deigned by a bill passed in 2006 by that CONGRESS and signed by baby bush.

Trap is working.

[defendandprotect]

27. Corporate control of the PO/Foxes aren't going to make things better ....

and Congress knows now and has known for more than 20 years the corporate

attack on the PO -- without stepping in to rid the PO of this corruption!


What trap?


:hi:

[proverbialwisdom]

30. Kidding, right? Have you compared the shipping rates?

USPS is the way to go! The rates for private carriers are exorbitant in my experience.

[Purveyor]

4. It just keeps coming. All I can say is "better the summer of 2011 than 2012". eom

[former9thward]

5. The post office should immediately go to a three day delivery.

The pony express went out of business in the 1800s and the post office is being put out of business by the internet. They need to adjust now.

[sarcasmo]

14. +1

[msongs]

6. they could always raise the rates on all that unwanted trash they put in my mailbox nt

[UpInArms]

12. but... junkmail is their "bread and butter"!

or, so I've been told

:sigh:

[pa28]

7. This is another GOP created artificial crisis.

In 2006 the USPS was suddenly required to pre-pay future health benefits into a government trust fund and now they need to access some of the 60 Billion in audited overpays they've made. They need a change in the law as well as their own money back and the GOP, of course, refuses to cooperate.

Just another page in their playbook. Fabricate a financial crisis and then use it as a variation in their "america is broke" story line which, of course, will lead to a discussion on privatization.

Here is some additional backround.

http://federaldaily.com/articles/2011/05/17/usps-billions-in-benefits-overpayments.aspx

[PoliticAverse]

9. And here is some additional discussion of the prepayment issue...

http://www.postalnewsblog.com/2009/03/26/the-postal-ponzi-scheme/

[arcane1]

11. It's the same old fucking story...

How many countries have dealt with this shit, to our perceived benefit, while we were semi-blissfully unaware?? We're rapidly approaching Peak Globalization: the point where the beast has no choice but to feed on itself. :evilfrown:

[CleanGreenFuture]

28. Well, that's a given considering oil production has been stagnant for seven years. No

oil production growth, no economic growth, no globalization (eventually).

[bluesmail]

15. I pretty much agree with you. n/t

[marions ghost]

18. thanks for the info

:grr:

60 billion in "overpays" !?

[customerserviceguy]

8. Double the price of sending junk mail

That might even reduce the amount of that highly-travelled litter.

If my lady would only get on board like I do, and have all of her bills sent to her through the Internet, junk mail would make up 99% of what we receive. Yep, she still pays her bills with mailed checks, too.

[Frustratedlady]

10. The majority of my junk mail centers around requests for political donations.

When I donate, the requests grow in leaps and bounds.

[bluesmail]

17. Get congress to OK a raise on that 'effin' junk mail. It's all I get. n/t

[pinto]

20. OPM Response to USPS Decision to Suspend FERS Annuity Contributions

The US Postal Service is facing serious challenges. OPM (Office of Personell Management) is sympathetic to the situation in which the Postal Service finds itself, and we stand ready to help the Postal Service in whatever way we can, consistent with our legal obligations and role as the fiduciary for the Retirement and Disability Trust Fund (the Fund).

There is currently a surplus in the portion of the Fund covering Postal Service employees. The Postal Service’s position is that, in light of this surplus, it should be permitted to suspend making Federal Employees’ Retirement System (FERS) annuity contributions. We understand that, based on this position, the Postal Service intends to cease making further FERS annuity contributions effective June 24, 2011.

Both the Postal Service and OPM have agreed to seek a resolution of the important legal issues surrounding the Postal Services’ decisions by submitting a request for a legal opinion to the Office of Legal Counsel (OLC) at the Department of Justice.

Our aim is to protect the Postal Service employees to the greatest extent possible under the law. We have thus determined that while these issues are pending with OLC, we will be able to continue to give employees who retire credit for service rendered after the Postal Service ceases making FERS annuity contributions on June 24.

http://www.postalnewsblog.com/2011/06/22/opm-response-to-usps-decision-to-suspend-fers-annuity-contributions/

[pinto]

21. CNN gets USPS pension funding story backwards

CNN manages to confuse two major financial issues in its story on today’s USPS announcement on retirement funding. A story on the network’s web site reports incorrectly that the USPS announced it was cutting off payments to the future retiree health benefit trust fund:

For the first time, the U.S. Postal Service will ignore a federal requirement and stop making prepayments to its health care retirement fund in a bid to ward off insolvency.

The Postmaster General did announce several months ago that the USPS would not make its required annual $5.5 billion payment into the trust fund- but that payment isn’t due until September 30. What the USPS announced today was that it would stop making regular biweekly payments into the Federal Employee Retirement System (FERS). The agency’s FERS account already has a surplus of $6.9 billion, so the cutoff has no impact on actual payments to retirees.

via Postal Service to skip mandated retiree fund prepayments – Jun. 22, 2011.

http://www.postalnewsblog.com/2011/06/22/cnn-gets-usps-pension-funding-story-backwards/

[Hestia]

22. All to dismantle the unions that work at the USPS. ALEC's plan has worked remarkably well

hasn't it?

[CleanGreenFuture]

29. How will we ever fix the damage that is being done to our society?

[Occulus]

31. When there's a national strike. n/t

[Skittles]

55. elect a real Democratic prez?

[nadinbrzezinski]

23. Ah yes working as planned, thank Mr Bush

and that congress in 2006

[AsahinaKimi]

32. I wonder what would happen if

The US Postal service went belly up. I know, for my land lady expects her rent check by mail. Asking her to get pay pal would be as bad as asking for to donate a front tooth. I know you can pay most bills on line these days, and as for holiday and birthday cards there are always e-card services.

The thought of all those postal workers, out of work, and the billions of mailboxes rusting on the streets..Stamps might be worth more as collectable items, but useless other wise. Packages would be picked up by others like UPS and Fed Ex. Companies that mailed out their paychecks would have to go direct deposit. Bills would have to come by email, as would such things as
Jury Duty summons, and other official documents. No more birth certificates or passports mailed. You would have to go wait in long lines to get them, or be summoned to pick them up via email.


I just can't imagine the mess it would cause if this happened. One thing for sure would happen. The Republicans would probably dance in the street, for finding another way to destroy another segment of the American way of life.

[mainer]

33. The blow would fall hardest on older, rural, and retirees.

Like people who depend on rural mail delivery for their social security checks. Or people whose only interaction with the outside world may be through their mail carrier. Anyone who falls ill may be discovered only after a mail carrier notices someone hasn't picked up the mail in three days.

The mail service ties us together as a country and as a community. To lose it would be just tragic.

[susu369]

57. Paper Social Security checks will soon be a thing of the past

http://usgovinfo.about.com/od/federalbenefitprograms/a/No-More-Paper-Social-Security-Checks.htm

[andym]

34. Remember Reagan "The government is the problem, not the solution"

Well the GOP has set up the current debt situation by the unpaid for Bush tax cuts and Medicare Part D. (Thank you Grover Norquist for that great strategy to destroy the USA).

They also set up the USPS default by passing a 2006 law to prepay pensions, but on the other hand they can't access their 50-75 billion in overpayments in order to do the prepay. http://federaldaily.com/articles/2011/05/17/usps-billions-in-benefits-overpayments.aspx

GOP wants the government to look bad, and will cheerfully pass laws to help their goal along.

[villager]

37. USPS posts $3.1 billion loss in Q3, warns of default

Source: Reuters

USPS posts $3.1 billion loss in Q3, warns of default

WASHINGTON (Reuters) - The U.S. Postal Service posted a net loss of $3.1 billion in its third quarter and warned again it would default on payments to the federal government if Congress did not step in.

Total mail volume for the quarter that ended June 30 fell to 39.8 billion pieces, a 2.6 percent drop from the same period a year earlier, as consumers turn to email and pay bills online.

The mail carrier, which does not get taxpayer funds, has struggled to overhaul its business as mail volumes fall. It has said personnel costs weigh heavily and is facing a massive retiree health benefit prepayment next month.

"We are experiencing a severe cash crisis and are unable to continue to maintain the aggressive prepayment schedule," Joseph Corbett, the agency's chief financial officer, said in a statement.
"Without changes in the law, the Postal Service will be unable to make the $5.5 billion mandated prepayment due in September."

<snip>



Read more: http://news.yahoo.com/usps-posts-3-1-billion-loss-q3-warns-145707721.html

[udbcrzy2]

38. Could this be why they are in this situation?

The U.S. Postal Service will reduce the amount it pays for homes of employees who are relocating in the wake of a CNN investigation that found it was buying large homes for more than $1 million.

The new policy, which is expected to take effect June 14, will set a limit of $800,000 for a home. The limit is now $1 million, but before February there was no maximum.

http://articles.cnn.com/2009-03-05/us/postal.service.relocation_1_postal-service-relocation-policy-cnn?_s=PM:US

[emilyg]

39. Thanks - didn't know that.

[matmar]

40. No, that isn't why they are in this situation..

The problem is that the Republican Congress of 2006 passed legislation requiring the USPS start every year in a $5.5 billion dollar hole that is required of no other agency or business in the US. This mandated $5.5 billion dollar requirement is money that has to go to a fund that prepays FUTURE RETIREE health benefits. This group of future retirees include people who don't even work for the USPS yet. How do I know this? I work for the USPS.

[Dave From Canada]

41. That's complete nonsense. The USPS has been becoming a larger and larger money pit for decades.

[matmar]

42. oh, okay dave from CANADA

Tell me about the financial problems of the agency I work for...

[Dave From Canada]

50. I will. You have a monopoly, yet you continue to lose billions every year. Only the government

could manage that type of success. Total volume of mail has dropped by over 20%. But you're still retaining the same number of employees. Again, that's only something government can manage to get away with. Less demand for your service, but you keep increasing your payroll. Good luck with that.

People use email, and couriers now. Snail mail is a thing of the past. 10 or 15 years from now, it will barely be needed at all.

[BooScout]

54. Oh BS.....

How are you going to snail mail your latest purchase from Amazon or Ebay.

What's screwed the USPS up as well as other countries mails systems is politicians meddling with the systems and total crap managment in some areas of the systems.

[AlabamaLibrul]

56. Canada Post, obviously

I love how Canadians keep coming on this board to tell American Democrats how to run their functions of government and politics, and usually from a right-wing perspective...

[truedelphi]

43. Well that is an interesting wrinkle as well. A 5.5 billion

Dollar hole is a pretty amazing stunt for the GOP to pull off. Thanks for letting us know about it.

[Maineman]

46. If Republicans did it, it was intended to undermine the USPS so mail service could be privatized.

[pinto]

47. Thanks for the clarification. iirc, USPS has a trust account that'll pay current retirees.

They're buying time while they restructure by with holding the monthly *prepayments* to the fund. I think "default" was a poor choice of words on the media's part. But obviously a headline grabber...:eyes:

[Mojorabbit]

44. I think I read somewhere where they were the only

oraganization that had to prepay their retirement benefits into a fund.

[Imajika]

45. Hmmm....

Maybe as a result they are the only place the workers retirement benefits are actually safe?

Just guessing.

[cstanleytech]

48. The cynic in me would not place a wager on it being safe

after seeing how many companies have stolen the retirement funds from their employees in the past when times were bad for those companies.

[Strelnikov_]

52. Not only that . . .

http://federaldaily.com/articles/2011/05/17/usps-billions-in-benefits-overpayments.aspx

Donahoe also repeated a request for Congress to give USPS access to billions in overpayments to federal retirement systems: A number of audits that have indicated that the Postal Service has made $50 billion to $75 billion in overpayments to the Civil Service Retirement System, and $6.9 billion in overpayments to the Federal Employees Retirement System.

[boppers]

49. "which does not get taxpayer funds"? FALSE

It's supposed to be self-sustaining.

It's not always the case, however.

Time to stop funding 18th century technology that can't fund itself.

[Strelnikov_]

51. GOP created artificial crisis

pa28 presents the case in the following post:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4949703&mesg_id=4949746

++++

In 2006 the USPS was suddenly required to pre-pay future health benefits into a government trust fund and now they need to access some of the 60 Billion in audited overpays they've made. They need a change in the law as well as their own money back and the GOP, of course, refuses to cooperate.

Just another page in their playbook. Fabricate a financial crisis and then use it as a variation in their "america is broke" story line which, of course, will lead to a discussion on privatization.

Here is some additional backround.

http://federaldaily.com/articles/2011/05/17/usps-billions-in-benefits-overpayments.aspx

++++

And a follow up link by PoliticAverse:

http://www.postalnewsblog.com/2009/03/26/the-postal-ponzi-scheme

++++

[sarcasmo]

53. Make no mistake, this is about the Pensions.