It's safe to say the Postal Service is in financial shambles after losing $5.5 billion in fiscal 2014 and already coming out of the first quarter of fiscal 2015 with a $750 million loss. And there are no shortage of ideas from the Congress, the White House and the agency itself.
How we got here
Breaking down the core issues at the heart of the Postal Service's fall, most parties, on both sides of the aisle, are in agreement on what needs to be done.
Healthcare and retirement prefunding
This is the biggest hurdle for the Postal Service. In fiscal 2014 the USPS actually posted a $1.4 million growth in revenue, but that was overshadowed by its inability to make a $5.7 billion future retiree healthcare payment. Unlike any other public or private entity, under a 2006 law, the Postal Service must pre-fund retiree health benefits.
That means USPS must pay today for benefits that will not be paid out until some future date. All other federal agencies use a pay-as-you-go system, where the agency pays premiums as they are billed. USPS says shifting to that kind of system would save the agency an average of $5.65 billion per year, and save it an estimated $50 billion over the next ten years.
Curbside delivery
President Obama and House and Senate lawmakers have all called for moving older door-slot delivery units to curbside delivery mailboxes or neighborhood boxes. Door-slot delivery costs the Postal Service, on average, $353 per unit per year. Delivery to curbside mailboxes cost the Postal Service $224 per unit per year....continued.
By Ryan McDermott
Source: http://www.fiercegovernment.com/offer/gc_postal_service?sourceform=Organic-GC-Postal_Service-FierceGovernment
|