Post Offices loses $15.9 billion, and it’s only getting worse
The U.S. Postal Service will post a $15.9 billion net loss for the 2012 fiscal year, more than the $15 billion they had predicted.
“If Congress fails to act, there could be postal slowdowns or shutdowns that would have catastrophic consequences for the 8 million private sector workers whose jobs depend on the mail,” Art Sackler, co-coordinator of the Coalition for a 21st Century Postal Service, told Bloomberg News.
The Postal Service’s financial losses stand to grow even worse. Revenue is shrinking as mail volume continues to drop, but employee costs are growing. The USPS retirement account, previously estimated to hold a surplus that could cover losses, has come up $17.8 billion short. The USPS has been defaulting on annual payments into the fund of around $5 billion.
USPS proposals to grow revenue and cut losses consist mainly of ending Saturday delivery and eliminating offices and branches, which will not stop the bleeding and could have a detrimental effect on the economy.
But not everyone in the USPS is seeing a loss. “(A)ll but one of the top five executives for the nation’s mail service had an overall compensation increase this year,” The Washington Times reports.
Postmaster General Patrick Donahoe saw his overall compensation grow from $384,229 in 2011 to $512,093 in 2012. Chief Information Office Ellis Burgoyne’s total compensation exploded more than $270,000 last year to $510,505 in 2012.
Making matters worse is the fact you stop the wasteful spending by getting rid of mail delivery. The economy depends on it.
Libertarians have a better idea: Repeal federal laws granting the Postal Service a monopoly on first class, or “non-urgent” mail delivery.
Force the USPS to compete with FedEx, UPS and other parcel delivery companies. Not only will it make the USPS undergo needed employee compensation reforms, it gives Americans an “escape hatch” should the Postal Service harshly cut back on service and/or increase rates.
