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In October we noted that the U.S. Postal Service (USPS) had recently defaulted on a $5.6 billion mandate to pre-fund retiree health benefits, the second time in two months the USPS had failed to deliver. In August it failed to make a $5.5 billion retirement prepayment slated for last September, which Congress conveniently deferred. We concluded that the USPS is a “certified deadbeat and also a big-time loser,” which has now been certified.
The USPS net loss last year was $15.9 billion, more than the $15 billion that had been projected, as Bloomberg News reports. As the USPS racked up losses, the volume of mail it carried dropped 5 percent. It costs some $250 million a day to run the USPS, which by the end of the fiscal year will have less than four days of cash on hand. The USPS is expected to lose $7.6 billion in the year that started October 1. But the massive and ongoing losses did not prevent the government from handing out compensation increases to USPS bosses.
As the Washington Times noted, the overall compensation of Postmaster General Patrick Donahoe rose from $384,229 in 2011 to $512,093 in 2012 on account of a $186,536 increase in his retirement account. All but one of the top five USPS executives received “hefty increases” in their retirement plans.
USPS bosses say they will never stop delivering the mail. Even so, the Coalition for a 21st Century Postal Service, warns that without action from Congress, “there could be postal slowdowns or shutdowns that would have catastrophic consequences for the 8 million private sector workers whose jobs depend on the mail.”
If the federal government is serious about reform, it should stop rewarding USPS executives for massive fiscal irresponsibility. The federal government should lift the USPS monopoly on first-class mail. Let the USPS compete with UPS, FedEx and other companies on that front, just as it now does in shipping. Competition will spur the reforms the USPS needs. Otherwise the federal government will continue to abuse taxpayers, and common sense, by keeping this $15.9 billion deadbeat loser afloat.