Monday, September 5, 2011
Like so many other time-honored institutions in America, the United States Postal Service is facing a massive debt which will reach $9.2 billion, and the agency could shut down later this year if congress fails to act.
As any computer user can tell you, internet usage with online bill pay has led to people and businesses sending far less traditional mail.
At the same time, contractual obligations to unionized workers, including a no-layoff clauses, have increased the USPS’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health and retirement benefits than other federal employees.
Missing the $5.5 billion payment is due on Sept. 30 to finance retirees’ future health care, won’t cause immediate disaster but sometime early next year, the agency will run out of money to pay its employees and gas up its trucks, officials warn, forcing it to stop delivering the roughly three billion pieces of mail it handles each week.
In some countries, post offices double as banks or sell insurance or cellphones. In the United States, the postal service is barred by law from offering such services. Such old school restrictions must be removed from the USPS or the institution may not survive until the next presidential inauguration.