Franken, other lawmakers scramble to keep post offices open

REUTERS/Lucy Nicholson

Comments (6)

  1. Submitted by Bill Coleman on 04/27/2012 - 10:29 am.

    Better broadband option

    It seems to me that people in these small communities might rather have better broadband. $11 billion as subsidies to a dying service as opposed to investment in infrastructure. You could bury a lot of fiber optics connecting these places and positioning them for a better future.

    • Submitted by Mark Stromseth on 04/27/2012 - 04:13 pm.

      Digital doesn’t replace the physical

      Expanding broadband access for rural areas is covered by a tax you pay on your phone service already, so money that belongs to the USPS can’t be used to pay for that anyway.

      Still, I don’t see a day where you can get cards, letters, and packages delivered via the Internet.

  2. Submitted by John Eidel on 04/27/2012 - 03:20 pm.

    For the life of me…

    I cannot understand why Congress will not allow the postal service to raise rates. The price of a stamp is 75 cents in Germany, 72 cents in England, 98 cents in Switzerland and 82 cents in France. Us? 45 cents. Raising rates would completely stabilize the postal service, yet it is apparently even more taboo than closing post offices. Is it any wonder that the only two groups that use the mail with any frequency, the elderly and direct marketers, happen to have two of the biggest lobbying operations in Washington?

  3. Submitted by Richard Schulze on 04/28/2012 - 07:18 am.

    USPS made $9.5 Billion profit from 2003-2006! There was an internet then. I googled it.

    The PAEA (Postal Accountability and Enforcement Act) law passed in 2006 requires prepayment to fund for health benefits for future retirees. This is a 10 year plan (2007-2016) which $5.5 Billion is required to be paid by the USPS each year. This is a manufactured crisis via a poison pill. The current $44 Billion in the fund has enough to pay benefits for at least 20 years. A well designed attempt to privatize, sorry, I mean profitize, the mail. First kill it, then take all the lucrative parts away.

    Bottom line, the losses from 2007-2010 are around $20B, but the prepayments were around $21B, so the USPS is operationally profitable. The artificial handicap is the USPS. There is no reason to fully fund that account by 2016. That is akin to starving your family to pay off a 30 year mortgage in just 10 years. This onerous prepayment penalty is literally paying for future new-hire that have yet to be born.
    In addition, there is not one industry or corporation, public or private that is mandated by law, to prefund at the level the USPS is mandated to do.

    Pensions. This is a separate issue. USPS has two types, defined benefit and defined contribution. People hired before 1984 are CSRS, and newer hires are under the FERS system. CSRS is pension, with no social security. FERS is smaller pension, social security contributions taken out, and benefits eligible, plus a 401k type instrument called TSP (Thrift Saving Plan).

    The CSRS (Civil Service Retirement System) fund is over funded by about $50-75 Billion, with a balance of $200 Billion. Depending on if you believe the OIG (Office of Inspector General) or PRC (Postal Regulatory Commission). The OPM (Office of Personnel Management) miscalculated, but won’t fully admit it.

    The FERS (Federal Employees Retirement System) fund is over funded by about $11.5 Billion, with a balance of $75 Billion.

    So you can see the USPS has been bailing out the Federal government for some time now. Any credit for these over payments would not be a tax payer bailout, and the funds could go directly to the prefunding of retiree health benefits, raising that fund from the current estimated balance of $44 Billion mentioned earlier to the 2016 goal of over $70 Billion, also eliminating the remaining 5 annual payments of $5.5 Billion I wrote about earlier.

    The USPS has reduced employee totals from 820,000 in 2000 to around 550,000 through attrition. I predict that in 2020, the USPS will have 425,000 employees. So employee totals have been drawn down through attrition faster than mail volume declines, but that is rarely mentioned.

    The fact that 80% of the USPS $70 Billion in annual revenues goes to salary and benefits is NOT out of line. We are a service industry. We make nothing. What should that percentage be?? I think it is too low. It is also misleading as only 54% of revenue goes towards pay and benefits of employees who actually touch the mail. Maybe if we owned an airline like FedEx, we could get that number down to 37%.

    USPS forecasts they will lose $238 Billion by 2020? Really?? The USPS has never lost more than $9 Billion in a single year, and have a $15 Billion debt ceiling. Pray tell, how will they be able to lose $30 Billion per year the next eight years. Seriously.

    Finally (for now), the USPS says 80% of post offices are losing money. That is low. It’s more like 92%. The reason is that revenue is credited at the point of entry, so large plants get all the credit, and small offices that actually deliver it DO NOT get the credit for delivering it. The smallest most rural 10,000 post offices cost the $70 Billion dollar organization less than $1 Billion per year. If you shut them all down, rural America will suffer unduly. Closing Post Offices because they lose money is illegal. The United States Postal Service is obligated (and proud) to provide universal service nationwide.

  4. Submitted by Paul Udstrand on 04/28/2012 - 08:07 am.

    History reveals a huge mistake

    Way back when there was a time when congress prohibited the Post Office from getting into the package delivery business and tried to restrict the USPS to letters. This reserved that market UPS and Fed-Ex etc. USPS is now getting into the game with it’s fits-it ships packages (and has been delivering packages for years) but it has been late in the game, and congress has been stingy with capital investments to expand and enhance service. For instance the USPS doesn’t offer any real tracking ability, and it’s website can be incredibly clunky. It took me a half hour to reset my password and print out a shipping label the other day because I had accidentally deleted my stored password. There are other glitches as well, it would accept my business debit card as payment etc. There’s no reason for this clunkiness beyond lack of investment in upgrades.

    The USPS is an asset worth trillions of dollars for the American people. As long as you don’t lose your password, and have a credit card they accept, the post office is the most cost effective, and reliable way to ship packages we have, I love it. But you have to invest in upgrades once and a while, and remember they didn’t fall behind on package delivery simply because of “market” forces.

  5. Submitted by David Anger on 04/28/2012 - 05:35 pm.

    Make it a design driven experience

    We need the post office, but we need a smart, forward-thinking one. Design is the answer. From postage stamps to uniforms to lobbies, the USPS needs a makeover. Create desire by issuing postage stamps that people want to buy. Then, ask Zac Posen to design new uniforms that are functional yet modern. Finally, give the lobbies the heave-ho. Have you ever wondered why many post offices smell funny? I have. Give them a good scrub, introduce good seating and signage. In other words, rebrand the post office a la the Apple Store and customers will follow. Going to the post office won’t be a Debbie Downer any more but a joyful, spot on experience you want to blog about, Pinterest about and even talk about.

Leave a Reply