How bad is the outlook for the U.S. Postal Service? Ronald Stroman, deputy postmaster general, doesn’t hesitate.
We’re defaulting on our retiree health benefit obligations, he explains during a Wednesday stop in Portland.
We owe the Treasury $15 billion, he says.
First class mail volume is declining about 4 percent a year, he notes.
The Post Office should spend about $10 billion to upgrade its fleet of delivery vehicles and improve its sorting equipment to reflect the growing importance of package delivery, he adds.
The hulking problem that looms over the Postal Service is the Congressionally imposed requirement that it pre-pay its retirees’ pensions and health benefits. On paper, this is why the Postal Service reports quarterly losses in the $2 billion range.