Postal Service financials improve, but big losses continue

[alp227]

Source: Washington Post

The U.S. Postal Service will announce its third straight quarter of losses for fiscal 2013 on Monday, but those losses are declining, and that has agency and postal labor officials cautiously optimistic.

The $740 million loss in the agency’s financial report is better than the $1.3 billion and $1.9 billion drops for the first two quarters and means the Postal Service’s troubled finances are trending in the right direction. The development might help push a divided Congress to reach a deal on overhauling the Postal Service, some say.

Losses for the agency this year have reached nearly $4 billion, a dramatic improvement after a loss of nearly $16 billion in 2012.

In a statement Friday, the agency credited the better numbers to increased efficiency, a decrease in workers’ compensation, and growth in shipping and package services.

Labor groups have said the Postal Service could virtually break even if not for a 2006 congressional mandate that requires the agency to pre-fund employee retirement benefits — a common practice in the private sector but unique to the USPS among federal agencies. That obligation eats up about $5.5 billion a year, which is roughly the amount the Postal Service is on track to lose this year. The agency defaulted on its scheduled payment in 2012 and got a reprieve from Congress for 2011.

Read more: http://www.washingtonpost.com/politics/federal_government/postal-service-financials-improve-but-big-losses-continue/2013/08/11/20984ada-012d-11e3-9a3e-916de805f65d_story.html

[mbperrin]

1. BULLSHIT on the claim that private companies pre-fund 75 years of

retirement benefits.

In fact, quite the opposite.





Finally, corporate pension plans are in the red as well. More than two-thirds of the companies that make up the S&P 500 have defined-benefit plans, and as of last quarter only 18 of them were fully funded. Seven had shortfalls of more than $10 billion apiece, according to the New York Times. All told, the unfunded liabilities add up to around $355 billion, or about 22% of the funds’ promised benefits. Moreover, recent legislation has allowed companies to use higher (and more optimistic) return assumptions. In the very short run such changes take financial pressure off troubled companies and also boost corporate income tax revenue for the government by reducing deductions. But in the long run the deficit is increased and eventually has to be paid.

Read more: http://business.time.com/2012/09/26/how-bad-is-americas-pension-funding-problem/#ixzz2bjJcl9l8

This unheard-of requirement is the Republican plan to kill the post office and get the business for FedEx and UPS. Trouble is, their tiny operations would be swept away by the volume of mail that USPS handles.


Guess I can quit looking at the WashPo now, they are definitely Fox-ey.

[tofuandbeer]

2. +10000

[Scuba]

6. + another

[fasttense]

7. WaPo Rigging the facts for political friends and allies

An influence from AOL buying them?

[alp227]

12. The amazon.com founder, not AOL N/t

[hack89]

13. Companies are required by law to pre-fund defined benefit pensions plans

under the Employee Retirement Income Security Act of 1974 (ERISA).

The issue with pensions plans is not that that companies are not meeting the minimum funding requirements, it is that they are using overly optimistic estimates on investment returns to avoid paying more than the minimum. Completely separate issue.

That being said, it is clear the requirement does not work with the Post Office and should be rescinded or modified.

[mbperrin]

16. ERISA does not require companies to fund a retirement plan for employees who have not

yet been born, who certainly have not yet been hired, and who may never exist.

This provision was put on the Postal Service specifically and only.

The fact that other companies aren't even funding their actual employees' plans, except for a bare handful, is very illuminating about the lack of teeth in ERISA, anyway. We wouldn't need the government to take over pension plans if they were actually funded.

As usual, what they really want is for a big stack of money to be piled up so that the right people can steal it.

[davidpdx]

3. They need to change the numbe of years on the prepaid heathcare

from 75 down to 20 and pay off any debt then reinvest the rest. 20 years would fund those who are just starting on the job and will retire, 75 is almost 4 generations of workers.

[silvershadow]

4. This is a totally bogus and unnecessary event unfolding. And somebody needs to drive a stake in the

heart of it all. There is absolutely no reason to pre-fund for that many years out. With the reduction in the numbers of workers these last few years, they are in plenty good shape. They actually turned a profit last year of 2/3 of a $Billion dollars, were it not for the pre-funding crap that the Republicans foisted on them during the Bush years.

[former9thward]

10. It was not just Republicans.

The bill that included the pre-funding requirement was introduced by Henry Waxman and Danny Davis. Both progressive Democrats. It was supported by the postal workers union at the time. It received an unanimous vote in the Senate and most Democrats in the House. I am sure they would vote differently if they had it to to over again but it is doubtful that will happen.

[madville]

18. It was a bipartisan bill

The House vote was 410-20 if I remember right, before there was a final voice vote. No one dissented in the Senate and it passed unanimously.

[silvershadow]

19. Then we are either electing faux Democrats or else the party has moved so far in my lifetime it is

steadily leaving me behind. Somebody fell for a load of bunk somewhere. I do remember it now, in the recesses of my mind. I thought it was a load of bunk then, too. Guess I forgot, or maybe I assumed that it wouldn't get even worse, in which case I misjudged.

[Omaha Steve]

5. Without Pre-Funding Obligations The USPS Would Profit How Much? (posted in GD yesterday)

http://www.democraticunderground.com/?com=forum&id=1002

By Bill Brickley | August 11, 2013

The new USPS Financial Report issued Friday further validates the claim that the Postal Service is neither broken nor in crisis. Excluding the pre-funding expense the USPS has turned a $660 million profit delivering mail in fiscal year 2013. Showing again that Senator Carper, Senator Coburn and Congressman Issa are manufacturing a postal financial crisis as an excuse to dismantle it. Standing in their shadows are vultures named FedEx and UPS.

Senator Carper on Friday in an interview with NPR spoke of the need to “right size” the Postal Service. Apparently Mr Carper has not noticed that the Postal Service has eliminated 31% of its jobs in the last 10 years. Going from a career workforce of 729,000 in 2003 to slightly over 500,000 at the present time. While letter mail volume has dropped, it has been made up by a spike in highly profitable parcel delivery that as of this moment is at all time highs. Adding to that the Postal Service now delivers to 10.8 million more delivery points than in 2003. Yet Carper makes the outrageous claim that the Postal Service needs to be “right sized” and has too many workers. Mr Carper just insulted 500,000 postal workers and the intelligence of any informed observers.

NALC President Fred Rolando attempted to enlighten congressional leaders on Friday:

“The congressional priority should be to address the actual source of red ink: the $5.5 billion annual pre-funding albatross that is hampering the Postal Service. This mandate is not only onerous, it is unnecessary, because the Postal Service already has put aside sufficient money to meet the needs of future retirees for decades to come. Few, if any, companies can say the same.”

“The path to profitability is clear: Address the pre-funding fiasco and give the Postal Service the freedom to innovate and grow in the digital era. Do not eliminate Saturday delivery, which would raise costs for small businesses open weekends, and do not force people to traipse around their neighborhood looking for cluster boxes. Such steps would inconvenience the public and would destroy the Postal Service by driving mail—and revenue—out of the system.”

FULL story at THIS link: http://nhlabornews.com/2013/08/without-pre-funding-obligations-the-usps-would-profit-how-much/

About Bill Brickley

Bill is a member of the National Association of Letter Carriers, serving on the NH Letter Carrier Executive Board as CD1 Legislative Liaison. Also serves on the NH AFL-CIO Executive Board. Former NH Area Coordinator Amnesty International and NH Labor News Blogger
Follow him on twitter @BillBrickley

[former9thward]

11. The pre-funding mandate should be eliminated but so should Saturday delivery.

Not necessary for anyone. No small businesses would be hurt. That is just nonsense. Almost all apartment completes have cluster boxes. They don't have a problem with it. Neither would anyone else.

[Omaha Steve]

14. The USPS tried to end Saturday delivery, US Congress wouldn't allow it

http://www.csmonitor.com/Environment/Energy-Voices/2013/0206/USPS-ends-Saturday-letter-delivery.-How-much-fuel-will-it-save

So how much money can it expect to save by scrapping Saturday delivery? Overall, the Postal Service expects to save $2 billion a year out of an annual operating budget of more than $70 billion. A big part of that saving presumably is labor costs. Another savings is fuel.

The Postal Service owns and operates the world's largest civilian vehicle fleet with more than 213,000 cars, trucks, and vans that travel 1.2 billion miles each year. In fiscal year 2010, USPS vehicles consumed about 146 million gasoline gallon equivalents (GGE), or about 700 GGE if you include contract vehicles. The cost of fueling and maintaining USPS vehicles runs about $1 billion a year.

[former9thward]

15. I believe Congress should let the Post Office be what it wants.

No special funding requirements and let the Post Office decide what it wants to do in terms of delivery options and other business sectors it may want to get into.

[mbperrin]

17. Seems fair, since the government does not provide one thin dime to the Post Office.

But hey, those small government fans have got their fingers in everything, from the Post Office to women's vaginas.

[Orrex]

8. How much does it cost to photograph every piece of mail?

[Gregorian]

9. Shouldn't "LOSS" bein quotes?

We really need to broadcast the dipshits who got this ball rolling, and embarrass them on national tv.