USPS Gets Denied Postal Rate Hike They Tried to Blame on the Recession

Thursday, September 30, 2010 , , , 8 Comments

 pic credit: MTTS

Nice try, USPS, but we all know the recession has nothing to do with it. People still have to send letters and if anything your business should be booming given the additional volume of PAST DUE notices and foreclosure warnings. Duh.

The Postal Service (as in mail, not music) is facing a massive pension hole that can't be plugged by bailouts and rate hikes. Thankfully Congress saw right through their excuses and cockblocked a 2 cent rate hike.


"(A) [Postal Regulatory] [C]ommission analysis confirms that the Postal Service's cash flow problem is not a result of the recession and would have occurred whether or not the recession took place," the regulator said in a statement.

"It is the result of other, unrelated structural problems and the proposed ... rate adjustments would neither solve nor delay those problems."

How about instead of trying a 5.6% rate hike on stamps we hardly use anyway (hellllo online bill pay!) and begging for bailouts the USPS try cutting the fat? Like this, for example:

A USPS inspector general report released last week in response to requests from Sen. Susan Collins, R-Maine, found the Postal Service pays the full health insurance premiums for 835 Postal Career Executive Service employees, OIG directors and Senior Executive Service members, a perk not available to other federal workers. Fifteen members of the Postal Regulatory Commission receive this benefit, according to PRC spokesman Norman Scherstrom.

"It is unbelievable to me that the Postal Service -- awash in red ink and asking for huge postal rate hikes, service reductions and relief from its financial obligations -- is paying the full health care premiums for its top executives," said Collins, the ranking member of the Homeland Security and Governmental Affairs Committee, which oversees USPS.

Recommended supplemental reading: What if the Postal Service runs out of money? via WaPo's Federal Eye.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


Anonymous said...

You don't know what your talking about.

The simple fact is that the USPS is unable to run their business like a business. US Postal rates are much cheaper than most other countries and the standard of service is very high.

Our government is pandering to folks like the "Affordable Mail Alliance" who want to keep rates low so there continues to be a business case for junk mail.

USPS is a huge operation, of course they have to pay their executives.

At the end of the day, we have 3 choices, higher postage, reduced service or screwing USPS retirees. Our government has rejected the most sensible of the three solutions.


That should be "You don't know what you're talking about."

That being said, I do. The USPS is unable to run their business like a business because they obviously don't understand the meaning of "pension liability" and assume the money will just magically appear. Sorry to be the bearer of bad news but as many municipalities and other government or semi-government agencies are discovering, pension liabilities are exactly that, liabilities.

No corporation could be run in such a way.

Is the USPS crucial to the day-to-day operations of the US government? If mail service shuts down will the world come to a standstill? Why is it our responsibility to bail out the Postal Service and cover stamp increases because they don't know how to compete with UPS/FedEx and "forgot" to fund retirees pensions year after year after year?

Mismanagement of the USPS is not our problem and it is not fair for them to pass along the cost to us since we already allegedly paid for it.

I never implied that they shouldn't pay their executives.

Anonymous said...

A normal corporation has the option to raise prices and/or cut back on operations in order to balance their revenue and expenditures. The USPS has to ask the government to do these things.

To counterpoint your "will the world come to a standstill" comment, would the US economy collapse if we had to pay a few more cents for a stamp? Will people riot if we don't have the opportunity to throw out most of our mail because it is unwanted crap?

The bottom line is that we simply pay too little as Americans for postal services ( see here for a comparison - ). It's unfair to expect the USPS to balance its book without allowing it to set fair prices for its services.

"It's unfair to expect the USPS to balance its book without allowing it to set fair prices for its services"

Now THAT I absolutely agree with. I think we should let them fully off the government leash so they can A) set their own prices based on FMV for mail services and B) cover their own liabilities if and when cases of cash flow problems occur instead of turning to the government for a handout.

But there is no such thing as a free market anymore.

W.C. Varones said...

Shut 'em down! Shut 'em, shut 'em down!

Seriously, does anyone give a rat's ass if the inefficient USPS goes away? Ever hear of e-mail and online bill pay?

And for those few times when you actually have to have paper garbage delivered to someone, there's UPS and FedEx.

W.C. Varones said...

P.S. cutting them off the government leash also means cutting off their privileged monopoly status, with bullshit laws like it's illegal to compete with them on junk mail and first class letters, and it's illegal for anybody else to put anything in a mailbox.

Anonymous said...

Belated input that nobody will read anyway:

I think we could get a whole lot of votes for a proposal to double the postage rate on 3rd class mail. 80% of the stuff I get in the mail goes directly into the shredder. Fuck those direct mail guys.


YES! That's an awesome idea and I would completely support that!