Post Office Reports Record Loss Of $15.9B For Year

AP, November 15

Washington — The struggling U.S. Postal Service on Thursday reported an annual loss of a record $15.9 billion and forecast more red ink in 2013, capping a tumultuous year in which it was forced to default on billions in payments to avert bankruptcy.

The financial losses for the fiscal year ending Sept. 30 were more than triple the $5.1 billion loss in the previous year. Having reached its borrowing limit, the mail agency is operating with little cash on hand, putting it at risk in the event of an unexpectedly large downturn in the economy.

“It’s critical that Congress do its part and pass comprehensive legislation before they adjourn this year to move the Postal Service further down the path toward financial health,” said Postmaster General Patrick Donahoe, calling the situation “our own postal fiscal cliff.”

Much of the red ink in 2012 was due to mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. Without that and other related labor expenses, the mail agency sustained an operating loss of $2.4 billion, lower than the previous year.

2 comments to Post Office Reports Record Loss Of $15.9B For Year

  • USPS takes in more $$$ than its operating expenses. Problem is that congress ordered them to pre-fund benefits for the next 75 years. And everyone is just guessing at future staffing requirements. This was originally to be accomplished in 5 years – don’t know if they’ve adjusted the timeframe.
    No private company could do that.
    No other governmental or quasi-governmental agency faces such a requirement.

    It looks to me like a deliberate attempt to force the USPS to go belly up so Private Enterprise can take over the mail and run it for-profit. I have been trying to track down the original sponsor(s) of the bill and determine their major corporate donations. UPS? FedEx?

    • Mea Culpa for my paranoia and now I’m just confused. Turns out the offending legislation which is driving the USPS unjustifiably into the red was sponsored by Danny Davis (D-IL), John McHugh (R-NY) and Henry Waxman (D-CA). Davis and McHugh got significant donations from USPS unions.

      All I can think is the postal unions were were worried about the future of their retirement packages, based on what was happening with their contract negotiations at the time – I know there has been some hard bargaining over the years. The PEAE 2006 bill may have been an over-reaction to the USPS threatening to cut future benefits. Waxman was probably brought on board because he had a higher profile in Congress None of them – or the rest of the House & Senate – seem to have asked themselves whether it was financially responsible or even possible.
      The PEAE 2006 bill as it now stands requires USPS to pre-fund 75 years worth of benefits in the next 10 years, in addition to funding current benefits. I don’t know of any business which would consider this reasonable, responsible economic planning.
      The bill should be repealed or significantly modified, but I suspect it’s too useful a political bone for the the small-government crowd to readily give up.

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