The US Postal Service's forced financial crisis
By louisehartmann
Congress went on recess this week leaving the United States Postal Service financial crisis, unresolved. At midnight tonight, the Postal Service will default on a $5.5 billion payment it owes to the Treasury Department. This default will not have any immediate effects on day-to-day operations at the Postal Service, but it highlights the financial troubles that the institution, which was created more than 200 years ago by Ben franklin, is facing today. And those problems are almost entirely thanks to Republicans.
In 2006 – Republicans in Congress passed a poison pill piece of legislation forcing the Post Office to pre-fund retiree health benefits 75 years out into the future – basically funding benefits for future employees who aren’t even born yet. The Postal Service has to do this by giving the Treasury $5.5 billion every single year. That’s a requirement that no business, or any government agency has ever had to comply with. And it’s the reason why the Post Office is going bankrupt today and looking into closing down post offices, laying off workers, and cutting down delivery service.
So why is all this happening? Because the Postal Service employs hundreds of thousands of unionized workers – where as private mail carriers like UPS and Fed Ex do not. Republicans – in their non-stop war on labor – realized that they could hurt unions by bankrupting the Postal Service. That’s what they did in 2006, and their plan is working today.
Don’t buy into the scam that the Postal Service is going broke because of the internet and the rise of e-mail. It’s going broke because it’s the latest casualty in the GOP's war on organized labor.
Comments
#2
I've posted before....private mail delivery bypasses federal package and letter inspections. This opens the door to illegal drug deliveries which I personally wittnessed and was the unwitting carrier participant at the Microsoft campus in Redmond while a contractor for Pitney Bowes. This is a drug cartel priority. Letters and packages can be delivered to fictitious names attached to addresses that are legitimate, and this was a huge problem at MSoft. If you don't like my comments then find some other 'expert' on private delivery services and how this subverts our security.
#3
This is another victory for the country of Brown Brothers & Harriman. See what Brown can do for you.
They are not only dismantling a once secure and cherished U.S. tradition, your mail person, but casting their 75 year old private unpaid pipeline and railroad mortgage debts onto the backs of the public.
2006-75 years= 1931.
In 1931 the Florida East Railroad commenced the longest railroad bankruptcy in U.S. history which was settled $.40 on the dollar in 1970 just in time for the Penn-Central bankruptcy (lost governement bail-outs) and the "creation" of Freddie Mac.
In 1931 The Wabash was in receivership.
1931 Aetna bonded Bechtel for the Hoover Dam, Bechtel being the only bidder who could afford the bond. Revenue Bonds were issued for the dam. ("Aetna formally crafted a pension product in 1930")
1931 Pipeline mortgage of the North American Pipeline (these are usually 50-75 years)
2/8/2006 Effective repeal by Congress of the Public Utility Holding Company Act
Bif and Dif
March 31, 2006, the FDIC merged the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF) into a new fund, the Deposit Insurance Fund (DIF). 3/31/2006
3/31/2006 (WAWA- Carlyle National Office Partners) NOP 1001 Fourth LLC assigned Safeco mortgages to Massachusetts Mutual Life Insurance Company
(aka ABN AMRO) SAFECO MANAGED BOND TRUST Expiration Date 03/31/2006
More of what Brown did for you in 2006, they fixed your freight costs for the future:
6/30/2006 : NEW ENGLAND MOTOR FREIGHT, INC. Origin: NEW JERSEY (Shevell)
6/30/2006 ( North American Van Lines) SIRVA SETTLEMENT, INC. : 6070 PARKLAND BLVD, MAYFIELD HEIGHTS, OH 44124: 2006070300074 Status: Active Creation : 6/30/2006 Original Creation : 1/31/2000 Original Creation State: OH
EASTERN FREIGHT WAYS, INC. 09/13/2006 State NEW JERSEY Agent MYRON P SHEVELL Name & Address NANCY SHEVELL SAME Agent Zip 62703
"In November 2006, Prince Bandar, the former Saudi Ambassador to the United States, now back in Riyadh as the national security advisor to King Abdullah, orchestrated a secret visit to the Kingdom by Vice President Dick Cheney. The primary topic was Cheney's promotion of an American military strike against Iran,"
12/8/2006 12/08/2006 Entity Name: BAIN CAPITAL (CC) IX OFFSHORE, L.P.
In 2006, Scott Rothstein was busily engaged with North American Van Lines Beltmann Group. 22 To ROTHSTEIN,SCOTT BELTMANN GROUP INC 12/18/2006 Release/ Revoke/Satisfy or Terminate O 43285 641 106679157
#4
I think we are going to see a lot more catch up with health and pension benifits. They are all under funded. How can you pay a few hundred dollars including your employers share a month for 25 years and get thousands a month for 20 or 30 years. Do the math. Most pension and heathcare funds are going to dry up soon. At least posties will still have benifits.
#5
i like that idea., raise the junk mail rates. wonder if each piece @ .40 cts ea would thwart the pile i have to shred each week!
#6
why is this not all over the papers and the news and why is nothing being done about it? i have no desire in doing on line bill pay!
#7
Rural folks (and voters) will be hurt, as well. There are millions that don't live near cities or towns (i.e, where a Post Office would be) and millions more with no access (or desire to be tied) to computers. The only answer is to turn the House and the Senate DARK BLUE in Novemeber.
#8
Did I miss something? I though they where making them pay more into there retiree health benifits not stopping rural mail delivery. What are the republicans doing to working families I thought the Dems where running things.
#9
Mail isn't "cool" anymore. I think another factor is the idea that messages have to be sent quickly and with importance. If it's not texted or tweeted or whatever somehow that means its antique and useless. At least that's my take on a lot of what passes for "information flow" today. I sit down and occasionally send letters, I mail my amateur radio contact (QSL) cards, I send post cards from foreign places. And my 20-something students think I'm crazy to actually use postage stamps.
More seriously, there's a high end Eastern attorney whom I've been working with. Every single document the firm has sent had to go out by FedEx--got to be there quick, got to be sure, mail isn't good enough. Move, move, move, and use messengers. (Unless they've included a FedEx SASE I send them back by USPS. The mail works fine.) But if this is indeed a common mindset in business today then it's no wonder that the Postal Service has problems.
#10
Its the perfect example of what is so tragically wrong in America. remove the poisen and there would be no issue, right? so then who in fact should be held accountable? for 20 + years i don't think i've ever, for personal use, felt compelled to use fed-ex or ups over the postal service. the post office will get it there tomorrow if i need it to and its price is relative. it might just be that i'm opposed to , say , fed ex because they are just another monster corporation that could care less about much of anything other then making mountains of money. and probably don't pay muc in taxes either. its like when i go to the market now, they have those self check systems that my wife just loves but i see the cashier and think, "what if? what will it be like when the corporate machine has managed to consume and devour every half way decent paying job to automation and cheap labor? if you think its bad now?" As a society we should be ralying for the postal system. it is iconic! i once even aspired to be a postal dude!lolol and what will my dog do? its like excecise to her when the post man brings the mail. chases him half way down the street...
#11
I have to correct thom.I am a UPS driver and we are all union teamsters.
#12
Postmaster Gerneral..."Patrick R. Donahoe....earned a salary of $276,840 in 2011"
"The Postal Service's president and chief marketing and sales officer in 2011, Paul Vogel, earned $113,048 that year.."
"The Postal Service's chief operating officer and executive vice president, Megan J. Brennan, earned a salary of $235,000 in 2011."
"The Postal Service's chief financial officer and executive vice president, Joseph Corbett, earned a salary of $239,000 in 2011"
"The Postal Service's chief human resources officer and executive vice president, Anthony J. Vegliante, earned a salary of $240,000 in 2011."
..and this web site goes on listing other top US Postal Service government postitions.
http://usgovinfo.about.com/od/moneymatters/tp/Highest-Paying-Postal-Serv...
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Now, compare this with the private sector:
"UPS CEO Scott Davis was paid $9.5 million last year, a 73 percent jump from 2009"
http://www.cleveland.com/business/index.ssf/2011/03/ups_ceo_scott_davis_...
"..CEO of FedEx in 2008, Frederick W. Smith earned a total compensation of $10,434,589.."
http://en.wikipedia.org/wiki/Frederick_W._Smith
"CEO Frederick Smith was ranked No. 365 on Forbes' 2006 list of the world's richest people, with a net worth of $2.1 billion. "
http://www.bizjournals.com/memphis/stories/2006/03/06/daily36.html
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UPS 2009 Top Executive Salaries, bonuses, etc:
D. Scott Davis CEO and Chairman $5,489,816
David P. Abney COO and Senior Vice President $2,201,301
Myron A. Gray Senior Vice President- US Operations $1,906,674
Kurt P. Kuehn CFO and Senior Vice President $1,565,927
John J. McDevitt Senior Vice President- Global Transportation Services $1,559,918
http://projects.ajc.com/executive-pay/2009/company/united-parcel-service...
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FedEx 2010 Top Executive Salaries, bonuses, etc:
Frederick W. Smith CEO and Chairman $7,419,362
Alan B. Graf, Jr. Executive Vice President and CFO $4,359,993
David J. Bronczek Pres and CEO FedEx Express $5,328,017
T.Michael Glenn Executive Vice President, Marketing $4,238,794
Robert B. Carter Executive Vice President, Info Services and CIO $3,583,546
http://www.companypay.com/executive/compensation/fedex-corp.asp?yr=2010
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#13
"More than half of the 415,000-member UPS workforce is unionized, primarily with the Teamsters. FedEx has 280,000 workers, and only 5,000, all airplane pilots, are unionized."
http://www.usnews.com/news/articles/2009/12/08/fedex-and-ups-feud-over-u...
#14
I smell something fishy or a rat somewhere.
Congress requires USPS to prefund their Pension Plan 70-years ahead. Struggling under that load USPS founders. Next, there are calls for USPS to be fully "privatized," Here come the Vulture-Capitalists, following their classic (Bain/Romney, et-al) model.
They gut the pension-plan, paying their Stock-holders dividends and Management consultants big-bonuses. Then they run up as much debt as possible, lay-off workers, claim government bail-out monies (too important-to-fail -- you-know) -- and split with the loot from their new cash-cow before it dies -- -- the public- and employees all be-damned.
Hang on, here we go.
#15
My father worked for the post office and he was able to send his two children to college, take a two week vacation on Cape Cod every summer and buy a very nice house. My mother didn't work when I was young, yet we had enough to eat and very happy holidays. If it weren't for the union benefits, I would have died as a young child from an ear infection. Thank God we had health insurance. My father got a decent pension and his widow is helped by that. This is the kind of life that has slipped away from most of Americans. Too bad. I do blame the Reagon/Bush years for opening the door a crack to the Right wing vultures who don't care about America, they only care about money. These CEOs are unpatriotic and I can't understand why ordinary Americans keep voting for them. All these union jobs have been shipped overseas to countries without protections for their workers, these companies are free to use child labor and poison not only the environment but their workers. Shameful. Then the Right wing voted twice in recent years to stop the tax breaks for companies shipping jobs overseas. We have lost our tax base to move this country forward, we continue to watch our jobs go overseas and watch as the rich hide their money in overseas accounts which is amounting to trillions of dollars. The right wing doesn't want to close the loop holes in the tax system, nor do they want to raise taxes on the rich. It is not fair that people who work pay check to pay check pay 30% in taxes whereas the wealthy live off their riches from family money or investments and they pay either no taxes or very little. Romney only paid 14%. How is that fair and how is that patriotic? The rich only use the rest of us as fodder in their "games", Their goal is to get rid of the middle class, get rid of the uinions, college students so burdened by student loans they dare not speak out, because they owe their sould to the company store. The rich have bundled and manipulated morgage securities, was bailed out by the tax payers and then they turned around and blamed it ob poor people. And instead of lending out money they have stuffed it away to make their books look good and pay out large bonases. They think we are not watching them, but we are and we are not far away from, "Off with their heads".
#16
One last comment. With all this internet shopping going on, the post office is getting more and more business as they deliver those packages to people's homes. We need them more than ever. (The internet can't deliver packages yet.) What will we be left with without the post office? Hire prices for private delivery companies. "What is wrong with Kansas?" That is exactly what the right wants. Privatize everything so they can bilk the people of their last remaining savings and thereby destroy the middle class by destroying union jobs. Funny thing is, if you destroy good paying jobs, no one has any money to spend on goods. Hence, who will deliver what, when no one can afford anything. Stupid elites. A strong middle class, with healthy educated people is what moves a country forward. The elites don't see it. They only want us for their wars and to perform menial jobs for them. Service jobs mean servicing the wealthy. Why would we take those jobs if we had good paying union jobs.
I am also disappointed at the way the news media is handling this subject. Just last night, I was listening to PBS news and they reported on the post office and made it sound like mismanagement. Now, I know they are smart over there, why would they repport it like that? Shameful.
#17
Good points. I pay my bills online and use the postal service for personal mail and packages.
#18
This Law about the Post Office is Just Insane!
The most Proficient System in Probably the World started by Our One and Only Benjamin Franklin.
I think The President should declare a one day Martial Law.
He should Declare that ANY Elected Public Servant undermining the American citizen instead of the American Business should be DisMissed and fined.
All Contribution Campaign Funds should be made Illegal.
Revoke Immediately is All of Congress's Retirement,due to that is what the majority of American Citizens get!
This country will fall in a matter of a short time if We The People dont Take It Back from the internatinal Businesses that BUY our laws (through Unlimited Campaign Funds) to fit there agenda which is cheap compared to obeying our laws that make sense. We hunt Terriorist all over the World and anything that undermines our economy, yet shouldnt we start with whatever is wrong here first??? I love this country. I Fear For Our Childrens Future!!!
Tea Party NO Common Sense YES!!!
#19
Back in the 90's, I was doing some temp. work and ended up at Pitney Bowes for one entire day at MSoft. I did not return due to transportation issues, but I was amazed at the culture there at MSoft. The feeling I had was very weird while there.
#20
Very good post. Informative. Thank you.
#21
Gordon Lightfoot Wreck Of The Edmund Fitzgerald
Wreck Of The U.S. Postal Service
Our Postal Service was founded in 1775 with Benjamin Franklin being our first Post Master.
The Postal Service is in trouble because of a 2006- law that requires the Postal Service to pre-fund the cost of retiree’s benefits for the next 75 years in 10 years time.
o other company or agency in America is required to do this.
n June 2011 legislation was introduced which will be the Wisconsin of the Postal Service if it becomes law. It will dismantle collective bargaining and forbid payment of severance pay to retirement-eligible employees. And reduce delivery services and close plants and post offices.
Another bill which would prevent the financial collapse of the USPS – without closing thousands of post offices, eliminating hundreds of mail processing facilities, delaying mail delivery, laying off 120,000 workers, cutting postal workers’ pay, or ending collective bargaining rights.
We are in the fight of our lives but people have voted wrong for too long and done nothing to help preserve their jobs over the years. People tell me it doesn’t matter what we do as we are doomed anyway.
Their mind is made up even before the studies are done.
All we can do is say we went down trying to keep our Eagle from drowning to keep service for the American people and jobs and benefits for the workers.
Many people will never give up until all services that help us including the Postal Service are bled and dead. Common sense is not in the makeup to improve the economy, only the rich get richer and the poor poorer.
Private companies will not deliver to the rural areas or inner cities and the elderly will not get their medications.
We will have a museum of our defunct Postal Service.
#22
One arrow in the quiver might be the churches. The USPS has standards against pornography, Fedex and UPS do not. The churches ought to be informed that with the privatization their republican friends want comes pornography. Pornography is republican's best friend, note who just endorsed romney. Ask your church leaders if they are happy with pornography coming to teenagers. The USPS does not deliver abortion pills either, Fedex and UPS do.
Tinton is right about the inspections. Most of the financial services won't use USPS because when they mail fraudulent documents through the mail, it's a felony, not so with Fedex and UPS. Bernie Madoff had a few felony convictions if I'm not mistaken. Issa, the oversight committee chair is behind the postal purge. Talk about a fox guarding the hen house. He's setting up for the biggest robbery in history.
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Strange that about the only thing keeping the Post Office afloat right now is junk mail and bills. And they are trying real hard to get everyone onto paying their bills on-line instead of waiting for the bills in the mail and sending them checks in the mail. As I've said many times in the past....on-line bill paying and banking is just not safe.
Both junk mail and bills are tools that corporations use to get us to spend more of our money. There sure is a lot of hypocrisy by these corporations.
But, for me, they are just wasting their money in sending me junk mail. I have never responded, nor would I ever be tempted to respond to any of these junk mailers. Just have to mentally turn an annoying situation into a laughable one...silly fools think they are going to get any of my money...they are just wasting theirs....and, at least, it keeps the Post Office in business.
The bills, of course, I have to pay and I have no problem with that. But I sure would have a big problem if I had to pay bills on-line. Not safe!!!
Maybe the Post Office should just raise their rates on businesses that send junk mail...those idiot junk mailers will never stop...what are they going to do without a post office...send all their junk mail by UPS?