Postal Service Defaults on $5.6 Billion Payment. Can We Finally Discuss Postal Reform Now?

For the second time in as many months, the United States Postal Service has defaulted on a multi-billion dollar payment. In August, the fiscally insolvent institution defaulted on a $5.5 billion payment and, as any good loan shark could have predicted, since they were able to skate on that payment, this month they defaulted on a $5.6 billion payment.

The Postal Service has run as a model of inefficiency for decades and we have reached crisis mode as more and more people rely on email and other means of communication. However, the post office is still a vital piece of commerce and it is entirely possible to salvage this institution, but changes are needed.

The Postal Service is a unique amalgamation of private sector and public sector practices. It is supposed to be self-sustaining, but is run with the kind of inefficiency for which the U.S. government is famous. To address these inefficiencies, Congressman Darrell Issa has proposed legislation to overhaul the Postal Service and bring it back to solvency. When Issa proposed the legislation, he stated,

“The Postal Service lost $8.5 billion last year. It is going to lose, at least, $8.3 billion this year. And it is projected to lose $8.5 billion the year after that. Congress can’t keep kicking the can down the road on out of control labor costs and excess infrastructure of USPS and needs to implement reforms that aren’t a multi-billion dollar taxpayer funded bailout.”

Among the changes the Act calls for is allowing flexible delivery schedules, reworking the compensation structure for postal workers to bring it in line with the private sector and assigning a solvency authority to oversee the needed changes to policy. The solvency authority, according to Congressman Issa’s statement,

“…will have a broad mandate to restructure the Postal Service and reduce costs in order to bring the institution back to fiscal solvency when the Postal Service goes into default to the Federal government. The Authority will be disbanded once USPS meets several benchmarks that ensure financial health.”

With such colossal failures in our government, there are plenty of fires to put out, and the Postal Reform Act has not been given the attention it’s due. However, as the Post Office is hemorrhaging money, the addressing of unsustainable practices seems directly at the heart of the kind of reforms needed in Washington. If we are looking to trim our budget (if the Senate could ever pass one), then putting an end to the multi-billion dollar money pit by creating a sustainable business model is exactly the kind of reform that is needed.

We all hope that these problems will simply go away, but they won’t. We have been seeing these defaults coming for quite some time and yet, Congress has failed to act. We have reached crisis mode and the Postal Service needs to become a business once again- not a drag on our economy. It provides a  much-needed service and it’s continued survival is entirely possible if we address the solvency issues by passing the Postal Reform Act.

Please demand competency from your government and ask them to support the Postal Reform Act. A petition has been set up on When you sign the petition, you are doing more than affixing your name; letters are sent out to your senators and to your representative, urging them to support the Act and stand up for fiscal responsibility. Over 327,000 letters have been sent out so far!

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4 Responses to Postal Service Defaults on $5.6 Billion Payment. Can We Finally Discuss Postal Reform Now?

  1. Mad Mac says:

    I don’t often find myself agreeing with John McCain, but he got it right recently when addressing this topic and saying something along the lines that what is needed is not reform, but an exit strategy. It costs around $8 bn a year to run USPS: ask UPS and/or FedEx what they’d charge to do so. Surely not that amount.

    • Me says:

      You don’t know nothing! This article needs to get it’s “facts” straight. He talks like he knows something. I’m an employee and I got the inside scoop. This payment is on a mandate congress passed in 2006 for pre-payment for future retiree health benefits that no other government agency or private business is required to make such over-payment! I contacted my rep asking why on earth is this requirement made. No response as yet of course. But I know why, where ever there is a surpluss government dips into it, ie Socical Security! We are a self sufficient industry that does well and supports it’s self without the governments help or interference (or was, up ’till 2006!) and that just bits them in the butt! We already have 45 billion dollars set aside for future retirees, the government wants to drain it, period! It’s a serious ongoing battle for us. Contact your rep and fight for the postal workers please because it is Congress that has put us in arrears!

  2. Lynda Ulmer says:

    The crisis that the Postal Service is in was created by Congress as a means to justify privatizing the Postal Service. The Postal Service is a service based organization to the nation. Privatizing it will not be in the best interest of the nation. If it were not a profitable business, private industries would not be interested in becoming involved with it. The fact is, if the Postal Service goes private our nation will not continue to enjoy the many benefits it takes for granted that the Postal Service offers. 44 cents is the least expensive stamp in the world. Private businesses will charge dollars for 1 letter. Don’t let Issa deceive you. Too many managers per employee is the main drain on the Postal Services budget. Also, too many nonsensical rules are forced upon the employee cause which cause employees to lose time that could be better spent working. Casing one’s DPS letters can get a carrier suspended yet management would rather that a carrier stand around waiting for clerks to finish sorting mail than to allow them to case any of that DPS mail which would save them hours on the street. I know because I was letter carrier. I retired yesterday.

  3. Robert Finkbiner says:

    Seems to me the USPS missed out on a lot of revenue. They should have been one of the first, and largest internet service providers in the nation. This was more than likely due to a lack of foresight and imagination, as well as an abundance of resistance to change.

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