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What do the post office and Amtrak have in common.. Both suffer with the bloat of Public Sector Unions and we the tax payer get to pay for them to loose money

iamnothere 2011/02/11 15:59:21
By Ben Rooney, staff reporterFebruary 9, 2011: 3:47 PM ET

NEW YORK (CNNMoney) -- The U.S. Postal Service warned Wednesday that it may default on some of its financial obligations later this year after reporting yet another quarterly loss.

The USPS, a self-supporting government agency that receives no tax dollars, said it suffered a loss of $329 million in the first quarter of federal fiscal year 2011. That compared with a loss of $297 million a year earlier.

The agency has been suffering from an ongoing decline in mail volume, which has undercut revenues, while retiree health care costs have been straining its reserves.

Excluding costs related to retiree benefits and adjustments to workers' compensation liability, the Postal Service said it had net income was $226 million in the first quarter, which ended Dec. 31.

Despite ongoing cost-cutting efforts, the USPS said it expects to have a cash shortfall this year and to hit its federally mandated borrowing limit by September, when the government's fiscal year ends.
All first-class stamps to be 'Forever' stamps

The agency said it will be forced to default on some of its financial obligations this year unless Congress changes a 2006 law requiring it to pay between $5.4 and $5.8 billion into its prepaid retiree health benefits each year.

"The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model," Patrick Donahoe, the Postmaster General, said in a statement. "We are eager to work with Congress and the administration to resolve these issues prior to the end of the fiscal year."

The Postal Service has taken a number of steps to increase revenue, including marketing initiatives and price increases. The agency raised rates an average of 3.6% in January.

It is also perusing more dramatic changes. Last year, the USPS submitted a request to the Postal Regulatory Commission, which oversees the agency, to eliminate Saturday mail service. The commission has yet to respond to the request, but a spokesman said it is in the "final phase" of making its decision.

The USPS has also cut back on hours to save money. The agency expects to eliminate 40 million work hours this fiscal year as part of a plan to save $2 billion.

However, the service is currently negotiating new contracts with the American Postal Workers Union and the National Rural Letter Carriers Association, which will probably object to cutting hours.

On the bright side, the Postal Service said improving economic conditions suggest the "worst of the precipitous volume decline during the recession is over." But mail volume continues to be anemic, rising only 1.5% in the first quarter as economic growth remains sluggish.
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Top Opinion

  • MisterD 2011/02/11 16:03:36
    MisterD
    +5
    Yeah! We look at these two success stories and think: "Wouldn't nationalized oil be great and cheap" heheheheh

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  • Katherine 2011/02/11 18:59:06
    Katherine
    +2
    And next on the agenda: Socialized medicine.
    We'll do MUCH better with this one. We SWEAR!
  • Bill in Niantic 2011/02/11 16:46:49
    Bill in Niantic
    +2
    Unions and Government Mandates. They have no idea how to run any business that can support itself rather than Government Unions.
  • tommyg - POTL- PWCM-JLA 2011/02/11 16:20:25
    tommyg - POTL- PWCM-JLA
    +3
    One other thing....the article says "reducing hours"....NOTHING about reducing the workforce.
  • tommyg - POTL- PWCM-JLA 2011/02/11 16:19:24
    tommyg - POTL- PWCM-JLA
    +4
    Wait until they get their hands on health care! Why anyone would want the gov to run anything so important is beyond me.
  • Farnsworth 2011/02/11 16:06:27
    Farnsworth
    +2
    What is "run in the red"? Alex
  • HearMe~AFCL 2011/02/11 16:04:39
    HearMe~AFCL
    +2
    Geez, not surprised at all, they are "government".
  • MisterD 2011/02/11 16:03:36
    MisterD
    +5
    Yeah! We look at these two success stories and think: "Wouldn't nationalized oil be great and cheap" heheheheh
  • HearMe~... MisterD 2011/02/11 16:06:41
    HearMe~AFCL
    +2
    hehehe

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