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USPS at risk at not making payroll?

Elections have *consequences*.

By: Moe Lane (Diary)  |  July 19th, 2009 at 09:06 PM  | 

RESIZE: AAA

Back last month, House Minority Leader John Boehner made the following comment about government-run health care options:

“Listen, if you like going to the DMV and you think they do a great job, or you like going to the post office and think it’s the most efficient thing you’ve run into, then you’ll love the government-run health care system that they’re proposing because that’s basically what you’re going to have,”

…to which a variety of people who do, indeed, love the DMV/Post Office as examples of government-run agencies reacted in various levels of reflexively sardonic befuddlement.  The DMV comparison was usually skipped over, in favor of the USPS: after all, what’s wrong with them?  44 cents for a stamp, send it out, gets where it’s going.  Great, right?

Sure.  Until they can’t make payroll.

The presidents of the American Postal Workers Union, National Rural Letter Carriers’ Association, National Association of Letter Carriers and National Postal Mailhandlers Union co-signed the Tuesday letter to White House Deputy Chief of Staff Jim Messina, warning that the U.S. Postal Service is at risk of defaulting on a $5.4 billion payment to prefund retiree health benefits at the end of September.

The letter alleges that USPS “may not be able to make payroll in October and will be forced to issue IOUs instead.”

Yvonne Yoerger, a spokeswoman for USPS, confirmed that the unions wrote the letter but disputed the claim that payroll deadlines will be missed.

“That’s not something that’s been discussed at all,” she said. “We are committed to making payroll.”

Via The Other McCain. This article explains things a bit more clearly: the problem that the USPS is facing is that it’s stuck between dismal revenues (a 2.8 billion dollar loss in 2008) and mandated services, locations, and full pension funding. They’re now telling Congress that something has to give (above and beyond the 100 million work hours that they’re cutting this year); either they get to shut down locations, end Saturday service, amend the law requiring them to fully fund their pensions… or they get a bailout from Congress. Or they could not make payroll in October, and never mind what the PR spokesperson said.  At a guess, expect a bailout: after all, we can’t very well do without a postal service.  Also expect increased prices, worse service, fewer locations, and a permanent government subsidy; but don’t expect reduced pension plans being offered in the future, because the USPS is unionized.

And if the Democrats get their way, expect the same thing to happen with health care down the line.

Moe Lane

PS: I would like to note for the record that the federal government was more or less functional when the GOP handed Congressional oversight over it to the Democrats in 2007.

Um, what happened?

Crossposted to Moe Lane.

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COMMENTS

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  • bk

    “The presidents of the American Postal Workers Union, National Rural Letter Carriers? Association, National Association of Letter Carriers and National Postal Mailhandlers Union ….”

  • jccbin

    Seriously, just how many of you RELY on the post office for getting things places? I think someone in Congress should propose to END the Post Office as obsolete and no longer needed. For those of you who think Certified Mail and other so-called legal notices require a post office, just switch to FedEx or UPS overnight. Much more expensive, but not riding on my back.

  • bs
  • NeoKong

    The USPS wouldn’t be the first organization to be brought down by pension funds. All pension funds will eventually fail as the number of retirees always will grow faster than the number of workers that replace them. How can you give a worker more money and benefits after they retire than before they retire?
    Every time a worker retires and is replaced by someone new you now have a situation where two salaries are now being paid for the same job.
    The best case scenario would be that the pensioner dies early.

  • septembergurl

    ‘The best case scenario would be that the pensioner dies early.’

    I think this is where Obamacare comes in.

  • http://deafconservative.wordpress.com Cheetah772

    I don’t think USPS is the real problem, it’s unions, which is the real issue here.

    Stop permitting unions to have so much power over the management, then the actual cost of running the agency will come down. We have all safety and labor laws in place, so why do we need unions?

    Besides, there is one question I’d like to ask of you all here. Why do we set the retirement age? Wouldn’t it be more prudent just to let employees work until they drop dead? After all, if Supreme Court Justices can have a lifetime appointment, then I don’t see any reason to prevent an ordinary employee from working as long he or she can until no longer fit to perform the duties on the job.

  • Aaron Gardner

    I work for a company that is on contract for the IT needs of USPS. Although I am fairly secure in my position that isn’t true for all. I am certainly not a fan of bailouts, but we all know that is precisely what will happen. If it weren’t to happen there would be layoffs, which would exacerbate an already unstable economy. Oh and Obama doesn’t know how to do anything other than spend other people’s money on crap they don’t want and more importantly don’t need.

  • mbecker908

    just wait.

    Every city and county in the state has seriously underfunded – or unfunded – pensions. The cities and counties have been buying off their employees with fat pension deals and just kicking the can down the road. There’s an unfunded liability there – and I don’t know exactly what the number is – that will make the measly $50B or so that they’re in the hole now look like the good times.

  • bobojake

    How many obama train wrecks can we stand??????????????????????

  • bobojake

    Washington DC, obama, Senators and Congressman smell like the basement of an outhouse in 100 degree heat on the 4th of July.

  • Menlo

    Not all of us are willing to trust or join the crowd on the wonders of online, “electronic,” or automated bill-paying.

  • Darin_H

    They should immediately end Saturday service.

  • http://applescorneroftheorchard.blogspot.com/ Pomme

    do I want this administration to make Kevin Freakin Costner look good!

    Ever!

    Seriously though, if I only received mail once a week, I’d be OK with that.

  • http://www.marklaiminger.org Lammo
  • http://www.RedState.com/ETCartman Kenny Solomon

    I have this bizarre notion that I’d like my “sends” to arrive at their intended destination within a reasonable amount of time and intact…… especially international shipments (which have to go through Customs anyway).

  • techsan

    This is a key point I try to drive home with friends. Congress is doing this…they write the laws…they’ve been “D” since 2007. Blame Bush crap ignores this inconvenient truth.

  • The_Gadfly
  • The_Gadfly

    Don’t get me wrong, I’ve taken some classes with some USPS workers, and some of them are pretty smart and decent workers. But I’m not all that convinced the “union” is separate from “management” in this case, and that’s a bad thing.

    As for the retirement age, the answer is that it’s been government’s attempt to establish social policy, same as most other labor laws. When it was originally set, it wasn’t actually much of a problem. Odds of living to 65 were small, and the costs were spread out amongst lots and lots of people. I think I’ve seen figures of as high as 50 workers to 1 retiree, but even recently it was 20 workers to 1 retiree (Social Security, which uses the retirement age to start dispensing benefits). Properly calculated and managed, a pension isn’t necessarily a bad thing. But both of those need to be true and in the last 20 years or so we seem to have been bad at dealing with both of those necessary parts. To match the same relative point on the lifespan curve, retirement now would need to be well into late 70s-ish, possibly even early 80s. I’m not sure we get out of the current mess without tweaking that.

    Personally, I prefer the self-funded retirement plans (IRA, 401(k), 403(b), etc.). Ideally I’d like to see the required retirement age go away completely, and you are eligible to start drawing on your retirement funds after something in the 68-72 range.

  • kaedryl

    A little background:

    I’m from a USPS family. My grandfather was a postmaster for 30 years, my grandmother a clerk for 20. My mother and her husband also both postmasters, working 20 years for the USPS. 3 years ago at age 54 and 51 my mother and her husband both retired, having put in the require 20 years. This means for the next 30 odd years they’ll be living off their pensions and enjoying the USPS’s insane health plan (when I was in HS, I know the monthly cost was $12, not sure what it is now but its undoubtly inexpensive.)

    This is what’s breaking the USPS as well as most government jobs – the 20 year career. Get a govt job, put in 20 years, retire with a guaranteed pension and health plan. My brother is with Borders and Customs, and he’s already counting down his 20. With rare exceptions, nowhere in the public sector will you find someone putting in 20 years then retiring at 52. Both my mother and her husband are in excellent health and they’re actually busier now than when employed. Both could have easily worked another 10-15 years, which would have allowed them to continue to contribute into the system vs just living off it. Instead their taking advantage of the offered early out and took it.

    This work 20 yrs and then live off pension is one of the reasons govt agencies are bottomless pits. In the past with short lifespans they may have been sustainable, but now that people are living into their 80s or longer, it’s bankrupting the system. Perhaps that’s how obamacare is going to help fix the problem…once you get past 72, you simply won’t receive life sustaining care…

    And to answer the coming question, I broke the generational pattern, became an MD (pediatrics)