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Postal Service barely hanging on


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By Wes Venteicher, Los Angeles Times

WASHINGTON — With a wide grin and a quick step, letter carrier Kenny Clark brings more than the day’s mail to the people on his route in suburban Maryland.

Clark, 49, greets nearly everyone he sees by name. He puts packages under eaves on overcast days to keep them dry, reminds people to retrieve keys they might have left in keyholes, and shouts a quick “You OK?” at the doors of seniors.

“He’s a neighborhood icon — him and his truck,” said Amy Dick, who lives on Clark’s route.

But his future, and that of the U.S. Postal Service, is in doubt. The Postal Service lost $1.9 billion between January and March, and $15.9 billion last year. The 238-year-old institution loses $25 million each day, and has reached its borrowing limit with the federal Treasury. Daily mail delivery could be threatened within a year, officials say.

Americans increasingly go online to write letters, pay bills and read magazines, and mail volume has fallen by a quarter since 2006, according to the Government Accountability Office. The decline is expected to continue.

Postmaster General Patrick Donahoe has reduced staff, consolidated mail facilities and lowered express delivery standards in an effort to cut spending. But the savings have not been enough to match the drop in revenue.

“We are in real trouble, and we need comprehensive postal reform yesterday,” Mickey Barnett, chairman of the Postal Service Board of Governors, told a congressional committee last month.

The Postal Service is a government corporation, which means it is organized like a business yet subject to congressional oversight. Consequently, reform is difficult, said Mike Schuyler, a fellow at the Washington-based Tax Foundation who has studied postal issues for nearly two decades.

“The Postal Service has far too little flexibility when it needs to adjust, and it’s really in handcuffs because of all the requirements Congress puts on it,” Schuyler said.

Postal officials recently tried to end Saturday letter delivery, which could have saved $2 billion per year, but Congress blocked it. A legislative proposal to replace doorstep delivery with curbside delivery, which would save $4.5 billion, failed last year. A plan to close thousands of rural post offices was abandoned after postal officials deemed the closures would “upset Congress a great deal,” Barnett said.

But one of the Postal Service’s biggest problems has nothing to do with the mail. Its finances sank in fiscal year 2007, shortly after Congress passed the 2006 Postal Accountability and Enhancement Act. The act, among other things, required the Postal Service to start pre-funding the health benefits of future retirees 50 years in advance at a rate of about $5.6 billion a year. The year after the act was passed, Postal Service ledgers showed a loss of $5.1 billion.

The pre-funding payments and other measures in the 2006 law have led some, including political activist and former presidential candidate Ralph Nader, to call the Postal Service’s situation a “manufactured crisis.” Only one other federal agency, the Defense Department, pre-funds future retiree health benefits, the Government Accountability Office said.

The act also limited the Postal Service’s ability to raise rates, forbidding increases larger than the federal consumer price index. America’s stamps, now 46 cents, are among the cheapest in the world’s developed countries.

The Postal Service and postal workers unions agreed to the 2006 legislation because at the time it looked as if the service could afford it, said congressional and union staffers who worked on the legislation. The recession changed that, affecting banks that typically send lots of mail and homeowners who receive it, said Jim Sauber, chief of staff of the National Association of Letter Carriers.

Sen. Bernie Sanders, I-Vt., and Rep. Peter A. Defazio, D-Ore., are sponsoring bills to eliminate the pre-funding requirement and allow the Postal Service to raise rates more freely, among other changes. Unions support the bill, and it has some supporters in the Senate and the House.

But some members of Congress who have been leaders on postal issues in recent years, such as Sen. Thomas R. Carper, D-Del., are calling for a more nuanced approach. Congress needs to correct the service’s fundamental problem — a lack of flexibility and authority over itself, Carper has said.

The Postal Service, which is provided for in the Constitution, has survived new technology before — the telegraph, telephone and TV, for example. Technology has brought positive changes along with the difficult ones: The Postal Service says package delivery has increased by 14 percent in recent years as more people shop online.

Union representatives are quick to point out what the service does well. It has been rated the most efficient postal service in the world at delivering letters to the 152 million homes and businesses it reaches. It is popular with its customers: A recent poll showed Americans trust the service with their privacy more than any other government agency.

On Clark’s route, Ruth Hartmann made her position on postal reform clear. She was concerned about Clark’s ability to pay for his daughter’s college.

“If they reduce service, it seems to me they would have a pay cut, probably his benefits, and that is an absolute ‘no,'” Hartmann said.

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Comments

Comments (10)
  1. tahoeadvocate says - Posted: May 28, 2013

    An example that government does not know how to run a business and shouldn’t be telling industry how to run theirs.

  2. Steve says - Posted: May 28, 2013

    In the past 2 years, I have gone into dozens of post offices to purchase current or recent commemorative stamps, only to leave most times empty handed without making a purchase. They are “all out” or “out of stock”. They inform me that the few they receive to stock are sold out instantly, and no one has the sense to order more. It is no wonder the postal service is going broke.

    Can you imagine Raley’s or Safeway or the corner gas station surviving with such mismanagement?

  3. tahoeadvocate says - Posted: May 28, 2013

    I shipped a package on May 4th with insurance. It reached its destination on May 8th.
    It was noted as undeliverable as Addressed (shame on me).
    It began its return trip to me on May 11th (3 days after they couldn’t deliver it).
    I still don’t have it on May 28th.
    It left its destination city and went to Bell Gardens, CA then to Richmond CA then back to Bell Gardens CA then back to Richmond CA then back to Bell Gardens CA for the last 16 days.
    I’ve gone into the post office twice but they can’t help me since it was sent parcel post (I thought this was a USPS service).
    I go online but can’t contact anyone all I can do is see where they are sending it but can’t ask anyone why it isn’t being returned.

    If asked what I’ve learned from this– I will only use FedEx or UPS and never use USPS again for packages.

  4. thing fish says - Posted: May 28, 2013

    Stamps.com
    Get with the times. You still go to the post office to ship domestically?
    You chose parcel post, cant track it on the internet, and you messed up the address. And that is their fault?
    I’ve had far more problems with FedEx.

  5. TeaTotal says - Posted: May 28, 2013

    This is the story of what happened to the USPS during the last administration. Of course if you’re stupid enough to believe only foxnooze and moron radio you wouldn’t know of this sabotage by the privateers, you would probably only have some whiny anecdote.- http://www.creators.com/opinion/jim-hightower/the-truth-about-the-u-s-postal-service.html -there is plenty more corroboration to be easily googled for anyone interested in reality.

  6. MTT says - Posted: May 29, 2013

    My Mail comes to me from almost anywhere in the country in 2 days.

    But I have to pay for my mail box. And there is no Home delivery here.

    Those days seem to be long gone.
    Any anything out of the ordinary, Forget it.

    I guess (It is what it is)

  7. local says - Posted: May 29, 2013

    Congress requires the USPS to prefund benefits for 50 years – really? And then they sabotage every cost savings effort they propose. In the past few years I’ve gotten better package service at less cost than with UPS. And if for some reason they can’t deliver a package (they usually leave them at the door, same as UPS, they bring them back – UPS makes me come to them after one try. I don’t like online greeting cards and send them by mail – geez $1+ to send to Europe and .46 anywhere in the US – what a bargain. I don’t like getting all the advertising junk, but that is what pays the USPS bills.

  8. Dogula says - Posted: May 29, 2013

    Wanna help the post office stay afloat?
    You know all those free postage paid envelopes that come with sales pitches for insurance, credit cards, magazines, etc? Well, put some heavy stuff inside them and send each one back through the mail. The company that sends them out has to pay that postage! However much it costs them!
    And as a side benefit, maybe they’ll stop filling your mailbox with so much junk, eventually.

  9. 4-mer-usmc says - Posted: May 29, 2013

    Dogula — I like it!

  10. 'HangUpsFromWayBack" says - Posted: May 29, 2013

    What happens to people who don’t have computers to get bills ,pay,ship boxes,does the private companies take over our system.Then they can up the prices to whatever they think necessary.
    MAIL STILL CHEAP COMPARED TO UPS,FED-X.