Postmaster General Patrick Donahoe to Discuss Challenges Facing USPS at National Press Club Tuesday

WASHINGTON, Jan. 2, 2015 /PRNewswire-USNewswire/ — On Jan. 5, the United States Postal Service will lower standards for mail delivery across the nation. Mail will take longer to reach its final destination. In contrast, USPS expanded package delivery to seven days a week during the holiday season. Where is USPS headed in an era of growing ecommerce and package delivery, but a drop in the use of mail for bill-paying and personal correspondence?

What about USPS’ finances? The postal service just reported its best quarter financially in seven years. Yet, USPS has been hobbled by a Congressional requirement to pre-pay billions in retiree healthcare costs. Congress also adjourned last year without approving either new members for USPS’ Board of Governors or enacting postal reform legislation that was years in the making.

Postmaster General Patrick Donahoe who has led USPS since 2011, during one of the Service’s most turbulent periods, and is leaving his post on Feb. 1, will offer a frank appraisal on what is working and what needs to be fixed at a Newsmaker news conference 10 a.m., Tues. Jan. 6, in the National Press Club’s Murrow Room. Past National Press Club President Angela Greiling Keane, who previously covered USPS for Bloomberg News, will host the event.

  • MrPolarBear

    Please note…..This article is misleading…..The sentence…

    USPS has been hobbled by a Congressional requirement to pre-pay billions in retiree healthcare costs is confusing…… What retiree health care cost. Again…..understand this question I am asking….. What RETIREES health care cost ???? Makes it seem like the Postal Service pays retirees healthcare. When you’re an active employee for the Postal Service, the Postal Service (Employer) contributes to the Active employee’s Health Care Benefits.

    However, Upon retirement, any extra
    contributions (that are the result of provisions in the collective
    bargaining agreement) cease. So the Postal Service doesn’t pay anything towards retired Postal Employees health care. Nada.. ZERO !

    The Congressional requirement mention above is in reference to a made up TAX (call it what ever you want, but it is a tax) that was passed to place 75 years worth of money into an account for people that the Postal Service MIGHT hire in the future. NOT CURRENT EMPLOYEES. Current Postal Employees benefits are paid for,( like every other company in the world who offers benefits) monthly. If you start a job at a company…..and your employer offers you benefits such as healthcare. Your healthcare premium is paid monthly. Your Employer might pay a portion along with your contribution. The Postal Service offers this type of benefit in its contractual agreement with their employees. Please note, the amount the Postal Service pays has been decreasing with every new contract negotiated. The Employees portion has been increasing with every new contract. So the amount Congress wants the Postal Service to save is in question. However, congress came up with a figure and in 2006, passed a bill forcing the Postal Service to place into a fund 75 years worth of payments to pay the Postal Service portion of the health care benefit ——-for NEW, not current employees. Congress estimated the Postal Service would need 55 Billion dollars to pay 75 years worth of premiums for the New Employees. No one can explain how they came up with the figure 55 billion. Congress has no idea how many employees the Postal Service might hire in the next 75 years. What makes matter worse is Congress expects the Postal Service to fund this 55 million into the savings account in 10 years. That’s a payment of 5.5 billion per year for the ten years. The Postal Service has never made such a profit. EVER. ………..By the way, the Postal Service is a non profit organization. Many people don’t know that the profits made at the end of the year by the Postal Service goes to the government. The USPS doesn’t keep any profits. The government gets it. Last year alone, the Postal Service would have made a profit of 1.2 Billion dollars, that would have gone to us…….the United States Tax payers. however, since Congress passed that bill making the Post Office pay 5.5 billion into a saving account for people they might hire within the next 75 years…..Babies still in diapers or in Utero……The Postal Service had to borrow from a line of credit that it has with the Government. Now try and understand this concept. This line of credit was established for the Years that the Postal Service didn’t make a profit. Which the Postal Service has had to borrow from during years it bought new vehicles, and equipment. However, each time it borrowed from this line of credit, The Postal Service paid the loan back….with interest !!! Mind you, one year the Postal Service made 84 million in profit. The following year it didn;t make a profit and had to borrow 4 million from this line of credit. It didn’t have the previous years 84 million dollar profit in an account that it could dip into That 84 million went into the governments general fund (to us the tax payers). The 4 million was paid back the following year with interest. Also paid to us, the tax payers….but this was before the 2006 Postal accountability tax. Now, with the 5.5 billion tax payment placed by congress has the Postal Service borrowing from the line of credit to pay the tax. Congress keeps extending the line of credit putting the Postal Service further in debt. Wonder why??? Follow this……………..

    First, that account the Postal Service has been placing the 5.5 billion dollars into, Well the money isn’t there anymore….. Congress has spent it….just like it dipped into Social Security, well it dipped into this fund too and took it all. Experts claim there was over thirty billion in this account. Now it’s just a figure on paper. Meanwhile, members in congress want the Postal Service to go belly up. Now why would they want that? The Postal Service was making millions for the tax payers before the 2006 tax bill
    forcing the Postal Service to save 55 billion dollars. Again…why? Well, certain members of congress have family that work for the agency that sells government properties. (Google it) These family members get huge commissions selling government properties. The Postal Service own Billions in properties. Guess whos making a profit??? Yep certain Congressmenand their families. They are now going to use the excuse that the Postal Service isn’t making a profit. The Postal Service has reach their borrowing limit and can’t repay its debt to the American People. So bankrupting the Postal Service is the only way to repay the debt. Making billions in commissions to many congressional families. Not to mention the under price selling of properties to get under the table payments. You can google that as well or copy and paste the link that follows:

    So why should we, the American Tax payer care??
    Well………..I for one believe it’s a right as an American Tax Payer to have the US Postal Service. It’s cheaper and in most cases better that any private delivery company. This is backed by Consumer Reports and other agencies. Even it it wasn’t. Understand this. It keeps other shipping companies costs low….The Postal Service lower costs keeps the competitors cost down. Don’t believe me… some research. Every Country….Thats EVERY country that has privatized their Postal Service has had rates increase and service go down. That’s why if you mail something from the US to another country, it costs more. You have to pay that Countries higher Postal Rate. ……….in Canada for example…it costs a dollar to mail a one ounce letter. The US Postal Service does a two ounce letter for 49 cents. Twice the weight for half the price. So think again about privatizing…and in case you didn’t hear. The Canadian Post passed a law to end home delivery. UPS and FED EX cost more to ship in privatized countries as well. There isn’t a low government postal service to keep shipping costs low. Oh…….and in most countries you have no home delivery. You must rent PO Boxes. Canada just this past year,passed a law ending home delivery. So if you live outside of any of the major cities, you have to drive into the city to get your mail. So do some research if you think Privatizing the US Postal Service is going to save you money. You’ll be surprised.

  • postalnews

    Sorry, but you’re wrong about a number of things. The USPS contributes the same percentage to retiree health insurance coverage as other federal agencies- an average of 72% of the overall cost. What you’re apparently confused about is the fact that the USPS makes a higher contribution to insurance for active employees. That is true. But when you retire, the USPS continues to pay the majority of your health insurance premiums.

    Feel free to verify this for yourself by looking at the FEHB premium tables. Note the difference between the postal employee rate and the postal retiree rate (which is the same as the non-postal employee rate).

    You might also check the USPS annual report for 2014, which records $2.9 billion for “Retiree health benefits premiums” on page 26. Those are the premiums the USPS paid for current retirees.. (The future retiree health benefits trust fund payments are a separate line item, and no payment was made in FY 2014.)

    Your next mistake is the nonsense about “the profits made at the end of the year by the Postal Service goes to the government”. That’s simply not true.

    Also- the USPS borrowing limit is still the $15 billion set in the original legislation creating the USPS. It has not been “extended” by Congress. (The fact that the USPS can’t borrow any more money is one of the reasons that it hasn’t made the trust fund payments.)

    And no, Congress hasn’t “spent the money” in the trust fund. The fund has a current balance of $48.8 billion. Beginning in 2017, that money will be available for the USPS to use to pay retiree health benefits.

    You’re right to be concerned about the USPS and the way politicians have been trashing it, but get your facts straight!

  • john

    The USPS is nonprofit and the earnings above operating expenses goes back to the feds. PERIOD we do not have a savings account.

  • postalnews

    The USPS is a government agency, not a “nonprofit”. If the USPS makes more than it spends, it does indeed keep the money. There is no law that requires it to give any surplus to the Treasury, and never has been. If you disagree with that statement, give us a link to the law that requires it.

  • postalworker1

    Isn’t that why they came up with Pre-Funding? Back in early 2000,s they {we) were making to much Profit!!

  • postalnews

    No. The pre-funding requirement was invented after OPM discovered that the USPS was overpaying its CSRS retirement obligation by about $5 billion a year. OPM recommended in 2003 that the overpayments stop. The problem was that while the USPS is “off-budget”, the CSRS fund is “on-budget”. So transferring money back to the USPS would, under Congressional budget rules, have the effect of increasing the federal budget deficit. So they settled on Susan Collins’ plan to set up an on-budget “trust fund” to finance future retiree health benefits, on the theory that the USPS would start running out of money in another decade or two. The annual payment to the trust fund miraculously turned out to be exactly the same amount as the CSRS overpayments.

    The USPS was doing well enough at first to be able to make the payments, but then the recession hit. The rest is, as they say, history.

  • Thomas M Long Jr (Brian), The question in my mind is how much $$$ is needed for future health benefits for retirees. In 2006, the USPS had around 700,000 employees. The goal is to have less than 400,000 by then end of the decade. The USPS is not a non profit. It is a quasi part of the Federal Government as you stated. It is funded by stamp and services. I probably have at the most 35 good years left on this earth. Somehow or another, I will try to see what the USPS looks like in 2081.