The U.S. Postal Service’s financial situation is starting to “look like Greece,” the Postmaster General told mailers last week, because of resistance to changing the agency's obviously unsustainable cost structure.
If Congress doesn’t allow USPS to change, Postmaster General Pat Donahoe told the Mailers Technical Advisory Committee (MTAC), by 2016 it will have $60 billion in annual revenue but $90 billion worth of debt.
Donahoe was updating the mailers on his plan to reduce the agency’s cost structure through such measures as eliminating Saturday delivery, closing many post offices and distribution centers, slower deliveries, and ending the accounting games surrounding retiree health benefits and pensions.
“We have to act on this now. Putting a couple of pieces together and holding your breath is not the solution. We will be in an untenable position in 5 to 6 years,” one account of the meeting quoted Donahoe as saying.
“It is hard to get the message across. Everyone can’t have their cake and eat it too. When you look at our outlook and do nothing, we look like Greece,” he said, referring to the country that faces default on its debt and massive upheaval after years of obviously unsustainable budget deficits.
Postal executives told the mailers group that their long-term plan for turning USPS’s finances around has not changed significantly in the past two years, except that mail volume has dropped faster than they expected.
They said they are not seeking “exigent” (greater than inflation rate) price increases but cannot rule them out if some of their proposed cost-saving measures are blocked because otherwise USPS could run out of cash in a matter of months. An especially attractive method of raising an additional $1 billion in annual revenue would be increasing the price of a Forever Stamp from 45 cents to 50 cents, an official said, because price increases have usually had little impact on the demand for such stamps.