Postal Service stops Saturday mail delivery

[Greg Bernhardt]

It's about time! Let's go to 3 times a week. Mon, Wed, Fri. However I suppose this would hurt employment.

http://money.cnn.com/2013/02/06/news/economy/postal-service-cuts/index.html?hpt=hp_t1

The U.S. Postal Service plans to stop delivering letters and other first-class mail on Saturdays beginning Aug. 1, although packages will continue to be delivered.
Tired of waiting for Congress to help, the Postal Service later Wednesday is expected to unveil a series of more drastic cuts they plan to pursue that will save them billions of dollars, a spokesperson for the service confirmed.

 

[Evo]

I consider this outrageous.

But the key culprit for the Postal Service's woes has been a 2006 congressional mandate, under which it has to pre-fund healthcare benefits for future retirees. The USPS has been borrowing billions of dollars from taxpayers to make up for the shortfalls.

The taxpayers are paying for retirees to get medical insurance AND the postal retirees ALSO get medicare! They can use both and basically get virtually free medical for life. I say if they get Medicare, then we can save billions of dollars by scraping the retiree medical, it's unnecessary and is just raping the taxpayer, IMO.

Two forms of health insurance

Q: I am 68 and a CSRS retiree. What are the advantages of enrolling in Medicare Part A when I am already covered under the FEHB?

A: You want some advantages? First, it’s free. You already paid for it through payroll deductions while you were working. Second, the combination of Medicare Part A and your FEHB plan will reduce or eliminate most of the deductibles and out-of-pocket charges for hospital care. Third, because the two programs don’t always cover the same things or in the same way, they tend to complement each other, giving you better coverage at lower cost.

http://blogs.federaltimes.com/federal-retirement/category/health-insurance/fehbp-and-medicare/

 

[turbo]

Stopping or curtailing Saturday delivery will cost one young lady much of her part-time job. My niece is the normal delivery person around here, and she'd be OK, though the lady who takes over for Saturdays and my niece's vacation days will have her hours cut.

Still, the USPS seems to want to continue parcel deliveries on Saturday. I'll have to talk to my niece and see what effect the curtailments might have on her replacement. Her rural mail-route is very large, spanning 5 or 6 towns with lots of back-roads and roadside mailboxes, but I have a hard time understanding how cutting regular mail service while keeping parcel-delivery service might save much money. These ladies still have to drive, charging off their fuel costs and mileage to the USPS. We'll see how it goes.

 

[turbo]

Also, there is a town about 15 miles south of here that has at least 4 post-offices. Some of them are very small, and they should have been consolidated years ago. Let the people in the town-proper get to the largest post office to send and pick up their mail, and convert the rest of the town to RFD. That would take ~6 Postmasters and Assistant Postmasters off the rolls. Some or most could transition to RFD driving and save the USPS a whole bunch of money.

 

[russ_watters]

I consider this outrageous.

The taxpayers are paying for retirees to get medical insurance AND the postal retirees ALSO get medicare! They can use both and basically get virtually free medical for life. I say if they get Medicare, then we can save billions of dollars by scraping the retiree medical, it's unnecessary and is just raping the taxpayer, IMO.
http://blogs.federaltimes.com/federal-retirement/category/health-insurance/fehbp-and-medicare/

No Evo, the USPS is about the only service that is fully self funded. Retiree benefits are paid by stamp buyers, not taxpayers.

Of course, when the USPS pension fund collapses, we'll probably bail it out.

 

[G01]

No Evo, the USPS is about the only service that is fully self funded. Retiree benefits are paid by stamp buyers, not taxpayers.

Of course, when the USPS pension fund collapses, we'll probably bail it out. [typo fixed. -Russ]

The use of when, and not if, in the above statement is disconcerting...

 

[Evo]

No Evo, the USPS is about the only service that is fully self funded. Retiree benefits are paid by stamp buyers, not taxpayers.

Of course, when the USPS pension fund collapses, we'll probably bail it out.[unfortunate typo fixed. -Russ]

Yes, you're right, but they're borrowing billions of dollars from taxpayers to fund it and have already been defaulting. They cannot afford it.

But what should we do about the $46 billion in accrued but unfunded benefits? All the plausible options involve taxpayers covering that bill.

For example, we could privatize the Postal Service and make the buyer take on the retiree health-care obligation. But that would simply reduce the sale price of the post office by $46 billion -- meaning that taxpayers pay.

Or, we could keep the Postal Service in public hands, restructure it so it produces profits and use those profits to gradually amortize the liability. Basically, this is what the 2006 law was supposed to do, though Congress didn't actually give USPS enough flexibility to restructure. This option costs taxpayers, too -- postal profits that would otherwise go to the government would instead be diverted to pay off the retiree health care liability.

Or, Congress could directly subsidize the post office to fund its retiree health-care costs. Obviously, that would put the cost on the backs of taxpayers.

The only way to avoid having taxpayers bail out the USPS is to default on the benefits -- tell current and retired workers that they won't get the benefits they thought they had earned.

http://www.bloomberg.com/news/2012-08-02/understanding-the-post-office-s-benefits-mess.html

They've got Medicare, so I don't see ending the private healthcare as a big deal. And I don't see how the taxpayer is going to escape footing the bill unless it is scraped.

 

[Locrian]

I consider this outrageous.

The taxpayers are paying for retirees to get medical insurance AND the postal retirees ALSO get medicare! They can use both and basically get virtually free medical for life. I say if they get Medicare, then we can save billions of dollars by scraping the retiree medical, it's unnecessary and is just raping the taxpayer, IMO.

I think it’s effectively similar to any retiree group that gets supplemental medical retiree insurance, since either their postal health plan or Medicare will be declared primary and the other will only cover the excess. Even if the postal service doesn’t fulfill the requirement to fund they are still better funded than the majority of private retiree medical plans.

I can understand concern over the financial future of the service, but I don’t see how the outrage is warranted.

 

[jtbell]

Postage rates here are lower than in most other developed countries. In Canada, for example, it costs 63c to mail a first-class letter or postcard, compared to 46c for a letter here, and less for a postcard. The Postal Service is forbidden by law from raising rates faster than the overall inflation rate. That worked while mail volume was still increasing, or at least holding steady. But mail volume has been dropping for the last decade. Something has to give.

 

[Greg Bernhardt]

The Postal Service is forbidden by law from raising rates faster than the overall inflation rate.

I for one would have no problem paying 50-60 cents for a stamp.

 

[Jimmy Snyder]

Will PF still be available on Saturdays?

 

[Greg Bernhardt]

Will PF still be available on Saturdays?

Server fees are rising fast! PF will now announce a new operating schedule of 3am-7am M-F and 5am-8am Sat-Sun and close all day every third wed.

 

[jtbell]

Let's go to 3 times a week. Mon, Wed, Fri.

Or put all the residentlai delivery routes in two groups. One group gets deliveries on Monday, Wednesday and Friday; the other gets deliveries on Tuesday, Thursday and Saturday. This would cut the number of residential mail carriers roughly in half. Businesses could still get daily deliveries.

 

[Evo]

I can understand concern over the financial future of the service, but I don’t see how the outrage is warranted.

I guess I am alone in being upset that they have already defaulted on 15 billion in taxpayer loans that seem unlikely to be repaid (according to everything I've read) and all due to a retiree health care plan which isn't necessary.

 

[Locrian]

It isn't clear what you mean by saying their medical plan wasn't necessary. Had medicare been paying primary and the PS been paying less, it just means taxpayers would have had higher Medicare expenses. Since the current health plan was previously (before the prefunding requirement) being funded through postal sales, relying more on medicare would have actually cost taxpayers more.

 

[Locrian]

One question I don't think is asked often enough is why we allow most postriree medical benfits in the US (both public and private) to be unfunded to begin with.

I believe the answer is that they used to be too small to be worth funding, and now are too big to fund.

It's an upsetting answer.

 

[Evo]

It isn't clear what you mean by saying their medical plan wasn't necessary. Had medicare been paying primary and the PS been paying less, it just means taxpayers would have had higher Medicare expenses. Since the current health plan was previously (before the prefunding requirement) being funded through postal sales, relying more on medicare would have actually cost taxpayers more.

It was initially just my confusion due to the issue of the retirement health plan being in the news so much the past 2 years. I was tired and thinking it had gone back to being taxpayer funded as opposed to them "borrowing" the taxpayer money to fund it.

Medicare will still pay the brunt of medical bills for hospitalization and long term care.

I'm not sure if we should start a new thread discussing the USPS situation or leave here since the delivery change is part of trying to save money.

The USPS does receive ~ 96 million dollars of taxpayer money each year that goes into the "Postal Service Fund", but it's purpose is not to fund retiree pensions.

The USPS does get some taxpayer support. Around $96 million is budgeted annually by Congress for the "Postal Service Fund." These funds are used to compensate USPS for postage-free mailing for all legally blind persons and for mail-in election ballots sent from US citizens living overseas. A portion of the funds also pays USPS for providing address information to state and local child support enforcement agencies.

http://usgovinfo.about.com/od/consumerawareness/a/uspsabout.htm

 

[Locrian]

Medicare will still pay the brunt of medical bills for hospitalization and long term care.

Medicare does not cover long term care.

Why is it Medicare will pay the brunt of hospitalization? Anytime a medicare enrollee has other insurance coverage, Medicare always pays secondary. Shouldn't their primary plan pay the majority of hospital related bills?

 

[boomtrain]

I think it’s effectively similar to any retiree group that gets supplemental medical retiree insurance, since either their postal health plan or Medicare will be declared primary and the other will only cover the excess. Even if the postal service doesn’t fulfill the requirement to fund they are still better funded than the majority of private retiree medical plans.

I can understand concern over the financial future of the service, but I don’t see how the outrage is warranted.

I think the outrage is over the suspicion that the postal service's retiree medical plan will be bailed out if it comes up short, while private plans (for anyone other than GM and Chryslter!) won't get that kind of taxpayer support.

 

[turbo]

IMO, the current troubles at USPS can be traced back to PAEA, which requires the postal service to pay over $5B a year to pre-pay the service's retirement accounts for 75 years. The problem is that the 75 years' worth of retirement funding has to be paid for in just 10 years. That's a tough nut to crack. Congress was responsible for causing this problem, and they have shown no inclination to fix it.

The PAEA stipulates that the USPS is to make payments of $5.4 - $5.8 billion into the Postal Service Retiree Health Benefits Fund, each year, from 2007 to 2016 in order to prefund 75 years of estimated costs. This requirement also explicitly stated that the USPS was to stop using its savings to reduce postal debt, which was stipulated in Postal Civil Service Retirement System Funding Reform Act of 2003. This is in addition to deductions from pay for federal contribution to social services. This pre-funding method is unique to the USPS. In June 2011, the USPS had to suspend its weekly payment of 115 million into the fund because it had reached 8 billion dollars in debt and the retirement plan had a surplus of 6.9 billion dollars. The schedule rate of payment has been changed and the USPS is currently expected to make a payment of 5.6 billion no later than September 30, 2012.

http://en.wikipedia.org/wiki/Postal_Regulatory_Commission

 

[Alfi]

It's about time! Let's go to 3 times a week. Mon, Wed, Fri. However I suppose this would hurt employment.

http://money.cnn.com/2013/02/06/news/economy/postal-service-cuts/index.html?hpt=hp_t1

Mon, Wed, Friday sounds ok to me.
I don't really care if it hurts some overpaid delivery people.

Paper mail is so last century. 90% of my paper mail is trash and recycled. Stop the need for the recycle and just stop sending the trash.

Any of the trash mail can wait a day or three, It's not time dependent.

 

[Alfi]

It was initially just my confusion due to the issue of the retirement health plan being in the news so much the past 2 years. I was tired and thinking it had gone back to being taxpayer funded as opposed to them "borrowing" the taxpayer money to fund it.

Medicare will still pay the brunt of medical bills for hospitalization and long term care.

I'm not sure if we should start a new thread discussing the USPS situation or leave here since the delivery change is part of trying to save money.

The USPS does receive ~ 96 million dollars of taxpayer money each year that goes into the "Postal Service Fund", but it's purpose is not to fund retiree pensions.



http://usgovinfo.about.com/od/consumerawareness/a/uspsabout.htm

Does this have anything to do with the topic?
Postal Service stops Saturday mail delivery.

 

[Evo]

Does this have anything to do with the topic?
Postal Service stops Saturday mail delivery.

Yes, did you read the article posted in the OP?

 

[Evo]

I think the outrage is over the suspicion that the postal service's retiree medical plan will be bailed out if it comes up short, while private plans (for anyone other than GM and Chryslter!) won't get that kind of taxpayer support.

Yes, I should have you write my posts for me.

 

[Alfi]

Yes, did you read the article posted in the OP?

Yes I did. Thanks for asking. Should I ask it of you as well?

I am confused how medicare has anything to do with a one day delay in snail mail.

Medicare will still pay the brunt of medical bills for hospitalization and long term care.

I read ...

Tired of waiting for Congress to help, the Postal Service on Wednesday unveiled its plan, which is expected to save $2 billion a year. It's a drop in the bucket, compared to the $16 billion loss the organization reported for 2012.

"It's a responsible decision. It makes common sense," said Patrick Donahoe, postmaster general and CEO of the postal service.

What I did not read was anything to do with medicare.

 

[Evo]

Yes I did. Thanks for asking. Should I ask it of you as well?

I am confused how medicare has anything to do with a one day delay in snail mail.

What I did not read was anything to do with medicare.

Because they have a retirement health plan that could end up being funded by tax payers (if the situation doesn't change) and then also be eligible for taxpayer funded medicare. Since they are eligible for medicare, there is no reason to also have a second health plan if it turns out the taxpayers will need to bail it out. You do realize that it's the problem with funding the healthcare for retirees that is the reason they are cutting back on saturday deliveries? Eliminating their retiree health care plan (which is being proposed as a solution) wouldn't be a problem, IMO, since they will have Medicare.

 

[Alfi]

Because they have a retirement health plan that could end up being funded by tax payers (if the situation doesn't change) and then also be eligible for taxpayer funded medicare. Since they are eligible for medicare, there is no reason to also have a second health plan if it turns out the taxpayers will need to bail it out. You do realize that it's the problem with funding the healthcare for retirees that is the reason they are cutting back on saturday deliveries?

You do realize that it's the problem with funding the healthcare for retirees that is the reason they are cutting back on saturday deliveries?

no, I did not realize that. I never realized that ending a Saturday delivery of snail mail is going to produce these problems.

as I said ... MY opinion is
Mon, Wed, Friday sounds ok to me.
I don't really care if it hurts some overpaid delivery people.

Paper mail is so last century. 90% of my paper mail is trash and recycled. Stop the need for the recycle and just stop sending the trash.

Any of the trash mail can wait a day or three, It's not time dependent.

WOW ... who knew that just a single day drop in delivery of junk mail could have such percussion's.

 

[Evo]

no, I did not realize that. I never realized that ending a Saturday delivery of snail mail is going to produce these problems.

Ending Saturday delivery is simply a way of cutting back expenses, it is not the cause of problems. Please read the articles provided, they will explain why the postal service is in dire financial trouble.

 

[Locrian]

I think the outrage is over the suspicion that the postal service's retiree medical plan will be bailed out if it comes up short, while private plans (for anyone other than GM and Chryslter!) won't get that kind of taxpayer support.

The postal service's retiree med was pay-go before the congressional change, just like most private retiree medical currently is. Under current terms they're better funded than the majority of private retiree med plans you're comparing it to are. Since most private retiree med programs are unfunded, there's no need to bail them out - they cease coverage, one way or another.

I don't think the accounting works the way you think it does.

 

[Locrian]

IMO, the current troubles at USPS can be traced back to PAEA, which requires the postal service to pay over $5B a year to pre-pay the service's retirement accounts for 75 years.

I would agree that this was a weird decision. Note that it came at the same time their pensions turned out to be overfunded, so maybe it made sense at the time, but it wasn’t well executed.

However keep in mind that the hole they’re trying to plug is several times the size of that 5 Billion annual funding increase. There’s a broader issue of declining revenues that can only be dealt with by reducing overhead.

 

[Locrian]

The postmaster general’s press conference was really enlightening – I caught it on CSPAN radio the other day. If you can find it, I would recommend it. Fun fact I learned from it: the average employee age with the Postal Service is 55 and 27,000 employees will leave the service this year, even if no jobs were cut.