POLL: USPS Struggles to Pay Bills

The U.S. Postal Service says the check is not in the mail.  Postmaster General Megan Brennan announced last week that the USPS is likely to default on its payments for future retiree health and pension benefits for the fifth straight year due to a budget crisis.  With cash flow running low, Brennan says defaulting on the benefit payments is the only way to avoid bankruptcy.  The Postal Service has defaulted on nearly $34 billion in benefit pre-payments already, and this year's would add nearly $7 billion more to that total.

The USPS continues to bleed red ink, reporting a $2.1 billion loss in the second quarter this year due to a continued decline in standard letter mail.   Longtime Postal Service reform advocate Dr. Rick Geddes from Cornell University and the American Enterprise Institute isn't surprised at the continuing struggles.  "More people are comfortable using electronic communications, more comfortable paying bills and purchasing things online, and all of that is really adversely affecting the postal service's mail volume and also its revenues," says Geddes.

The debate over how to solve the problems with the Post Office has gone on for years.  Dr. Geddes believes it's time for drastic changes in the operation of the USPS, which has been largely unchanged since 1970.  "Some people say well, just privatize the postal service, and I think that probably is the correct endgame," he says.  Geddes believes Congress can take steps to move in that direction.  "Give the managers of the Postal Service the flexibility to make the same decisions that the managers in a private company like UPS or Federal Express or DHL typically make...making it more like a typical business," he says.

In the meantime, the USPS is asking Congress for more freedom to raise the price of a stamp---currently at 49 cents.

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