Monday, February 13, 2012

Obama Proposes Postage Increase, End to Saturday Delivery

President Obama proposed today a special increase in postage rates and an end to Saturday delivery as part of a plan to right the U.S. Postal Service’s finances.

The Obama Administration’s Fiscal Year 2013 budget plan would also end the “pre-payments” for retiree health insurance and return the overpayments into a retirement fund, which have been the major sources of its recent budget deficits.

“USPS faces long-term, structural operating challenges that have been exacerbated by the precipitous drop in mail volume in the last few years due to the economic crisis and the continuing shift toward electronic communication,” the plan says. “Bold action is needed to ensure that USPS can continue to operate in the short-run and achieve viability in the long-run.”

One part of USPS’s short-run relief would be allowing it “to seek the balance of the modest one-time increase in postage rates it proposed in 2010.” Obama released a deficit-reduction plan in September that contained similar language.

Those 2010 rate increases, which were rejected by the Postal Regulatory Commission, would have instituted average rate hikes of about 5.8% for most classes of mail and even larger increases for the Periodicals class. They would have been on top of the usual inflation-based increases for such mail classes as First Class, Standard, and Periodicals.

The plan refers to giving “USPS the ability to better align the costs of postage with the costs of mail delivery while still operating within the current price cap.” But it does not address such specific cost-control issues as early retirements, layoffs, closing post offices and distribution centers, or relaxing service standards.

By providing relief on the pre-payment and pension issues and allowing for the special price increase, the plan would presumably put the Postal Service in a better position to offer early-retirement incentives to downsize its workforce in light of declining mail volumes.

Here is Obama’s five-point plan:

1) Restructure Retiree Health Benefit pre-funding in order to accelerate moving these Postal payments to an accruing cost basis and reduce near-year Postal payments;

2) Provide USPS with a refund over two years of the $10.9 billion positive credit balance in Postal contributions to the FERS program;

3) Reduce USPS operating costs by giving USPS authority, which it has said it will exercise, to reduce mail delivery from six days to five days starting in 2013;

4) Allow USPS to increase collaboration with State and local governments; and

5) Give USPS the ability to better align the costs of postage with the costs of mail delivery while still operating within the current price cap, and permit USPS to seek the balance of the modest one-time increase in postage rates it proposed in 2010.

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Anonymous said...

All of these are good ideas, except for eliminating a day of delivery, this is akin to the Postmaster General's idea of reducing service standards, prompting a decrease in usage in general. You do not reduce service, in a service industry to increase business.

Anonymous said...

Actually the only effective solution on this list is to end Saturday delivery since it is the only one that attacks the USPS problems at their root cause: an overbuilt work force. Everything else proposed here is typical government dead-end accounting. Rebating pension funding simply postpones the inevitable by by subsidizing current bloated postal operations with cash generated from prior business and previous ratepayers. And as mail volume continues to contract as we all know it will the future ratepayers (or in their absence future taxpayers) will be left holding the bag. Not a good idea but a very familiar one in D.C. these days. Just say no!

Anonymous said...

Call Your Senators:
(Capitol Switchboard)
[Click here for direct #s]
Tell them you Support

S. 1789 with the amendments to preserve 6 day delivery and stop the Closing

of thosands of Post Offices nationwide.

The U.S. Senate soon will likely debate the 21st Century Postal Reform Act (S. 1789), bill offering Early Retirement Incentives.
As president of the National Association of Letter Carriers, I understand that
S. 1789 should be amended, Congress should approve this bill ,S.1789.
Fredric V. Rolando is the president of the National Association of Letter Carriers
incentives to be combined.
1. 25,000 cash.
2. 3 years added on to your FERS retirement.
3. 2 years added on to your CSRS retirement.

GOOGLE……….U.S. SENATE………Choose your “SENATOR HOME” State. Look for the area in which to write and send your comments.
S.1789 is the last hope for anyone wanting the Early Retirement Incentives.

The NALC, APWU , and Obama Support the buyouts.

Anonymous said...

Actually anon eliminating Sat. delivery is the least effective solution on this list, it is not the root cause or even remotely the cause of the USPS problems.

Anonymous said...

Another Obama campaign strategy (tragedy). Can anyone remember the way of the pay phone? Here was the phone companies doomed business strategy... "Hey, use of our pay phones are going down... let's raise prices to cover cost! - Huh? All the PHD's have forgotten one thing... decrease in demand - prices go down... not up! Watch when their rate increases take hold, they will only succeed in further reduction of mail volumn, leading to a reduced revenue on current lower sales volumes. Ah, but who cares as long as the union is "entitled" to their due (no pun intended). Remember that word " Entitled ", so you can explain to your children why they have no hope of prosperity in their financial future due to the entitlement feeling by their parents... sad.

Anonymous said...

I'am all for saving jobs. But 5 day delivery would get rid of the floaters in my office, who steals the regulars Christmas cards. Forget about the ptf's they bang out 2,3,even 4 times a week, forget about holiday weekenda they never show up. Only way to get rid of the STIFFS

Anonymous said...

HOW about all the managers at the stations? What are their job descriptions?We have a small station with two supervisors and a manager who do nothing and are as dumb as hell and make 80 thousand plus yearly.Why not start cutting some of their assignments instead of cutting routes? That's where all the money is going!

Anonymous said...

What about all the managers at the stations we have ?Whats their job description? At my station we have a manager who pops in when she feels like it ,does nothing but order food and hang out with the other 2 supervisors.We also have a small station which doesnt need 2 supervisors and a manager making 80 thousand plus a piece a year.Instead of the post office focusing on this 5 day a week thing and cutting carrier routes they need to concentrate on adjusting management assignments!