U.S. Postal Service Bailout to Cost Taxpayers $11 Billion!
This past Wednesday, Congress officially voted to go forth with an $11 billion cash bailout plan that would delay the the end of the Postal Service system as we know it.
Recently, postal officials suggested closing as many as 3,700 post offices and over 220 mail processing plants across the nation.
However, many officials say that proposal simply wouldn't work due to the unique nature of the Postal Service operation, as its union contract prohibits layoffs.
According to the Wall Street Journal:
"The Postal Service's proposal to close thousands of post offices and cut back on the number of days that mail is delivered "won't work" and would accelerate the agency's decline, according to the six-page report by Ron Bloom, President Barack Obama's former auto czar, and investment bank Lazard Ltd., LAZ who were hired by the union in October."
Moving on to Plan B, Congress has agreed to undergo another bailout process for what some critics are calling “yet another terminally inefficient and outdated government entity.”
While this is merely a short-term bailout, critics wonder if the money is worth it and if will provide any long-term benefits. The general consensus seems to be that the U.S. Postal Service will be back in just a few years asking for more government assistance in order to survive.
One of the bill's co-sponsors, Senator Joe Lieberman explains why he supports this legislation: "The Postal Service is an iconic American institution that still delivers 500 million pieces of mail a day and sustains 8 million jobs...This legislation will change the USPS so it can stay alive throughout the 21st century."
The personnel costs are more expensive than any other component of the service. In this bill passed by the U.S. Senate, the $11 billion cash infusion will go towards buyouts and early retirement incentives for Postal Service employees. However, the $11 billion figure is a tad misleading...in actuality, following this new bill in its entirety will end up costing a shocking $33.6 billion. The additional money would keep many postal facilities from closing shop and keep the mail flowing six days per week – originally, legislators discussed eliminating one delivery day per week; probably Tuesday or Saturday.
In a technological twist of fate, the United States has become increasingly less reliant on the Postal Service. While many small businesses still use the system regularly for billings and receivables, the digital revolution has eliminated the need for the Postal Service for many individuals and large corporations whom find it easier to save time and money by communicating via the internet and cell phones.
In an agency that's losing $25 million daily and has accumulated a debt of $13 billion, it seems overly optimistic to assume that this new bill will have the power to overturn the dismal fate currently facing the U.S. Postal Service.
According to Desert News, “taxpayers shouldn't be expected to continue bailing out a quasi-governmental service that is in desperate need of radical reforms. Some of the Senate bill's provisions for reducing personnel and pension costs may be wise, but this isn't the time to keep kicking other cutbacks down the road.”
In lieu of the recent measures taken by Congress, USPS workers are still unhappy with the outcome. Many working within the agency say it has fallen short “in stemming financial losses.” Postmaster General Patrick Donahoe himself said he has no doubt that he'll be back asking for more aid to keep the business afloat once this monetary boost runs dry.+24
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