The U.S. Postal Service is in a precarious financial situation, telling Congress it faces the "equivalent of Chapter 11 bankruptcy." Losing billions of dollars a year, it is considering whether to close more than 3,600 post offices and lay off tens of thousands of workers.
The service faces many problems, including a drop in mail volume in recent years. But the service, which employs nearly 572,000 people, says some of its difficulties are inflicted by the federal government – through a law governing how the agency funds workers' retirement health benefits.
In 2006, Congress passed a law requiring the Postal Service to wholly pre-fund its retirement health package – that is, cover the health care costs of future retirees, in advance, at 100%. The Postal Service, which is a corporation owned but not funded by the federal government, is the only government-related agency required to prefund retirees' health benefits.
"No one prefunds at more than 30%," said Anthony Vegliante, the service's executive vice president.
Sally Davidow, spokeswoman for one of the unions that represents postal workers, calls it a "a ridiculous requirement."
"(The requirement is) so ridiculous, Congress doesn't do it. No other government agency does it. No private businesses do it," she said. "It's $5.5 billion a year, every year, for 10 years. That's what is causing the problem.
"The law was passed in 2006 and lo and behold, ever since 2007, the Postal Service has been suffering a tremendous debt."
The Postal Service reported a net loss of $8.5 billion last fiscal year.
The American Postal Workers Union and the National Association of Letter Carriers don't want to lose the benefits. But Davidow says a solution is possible.
Click the audio player to hear the rest of the story from CNN Radio's Jim Roope, and hear what Davidow says should be done, and why some legislators oppose the plan:
You can also listen to the CNN Radio Reports podcast on 
or 
to the podcast here.
© 2012 Cable News Network. Turner Broadcasting System, Inc. All Rights Reserved.
| Advertising practices | Advertise with us | About us | Work for us | Help
Good Ol' government gets involved and it messes everything up! Gee, go figure!
"The American Postal Workers Union and the National Association of Letter Carriers don't want to lose the benefits."
Yeah, the government should stay out of government agencies. You the guy at the Tea Party rallies with that "keep the goverment out of my medicare" sign?
The Government has NEVER managed any program funding and been successful. We have the worst idiots in office. It wouldn't surprise me to find out that many of our elected government officials are in bad financial situations in their personal lives.
Awwww....Poor babies....Does this mean Postal Worker retirees won't get their glamorous retirement packages?? Well, ain't that a shame !! As far as I am concerned, the USPS could DROWN !!!! These morons that call themselves postmasters can't even seem to get the mail delivery right in my condominium community. Fortunately, I have real good, trustworthy neighbors, and we practically sort the mail out ourselves because the postmaster doesn't know how to differentiate between 1st, 2nd & 3rd floor condominium unit numbers.
Where the heck do they hire these invalid's from anyhow?? Oh sure, I know you have to pass an exam, but DANG, this is RIDICULOUS !! Obviously, filing complaints at my local USPS doesn't seem to help either.
This is the main reason I had stopped paying bill via the USPS, and what's more, anytime I need to ship a package, I prefer UPS & FEDEX anyday over the USPS. BYE-BYE AND DON'T CRY USPS !!!!
Yea, but when their pilots go on strike, where is your mail?
You sound like you're the one who's a cry baby.
Perhaps they went to the same "invalid" school you went to. And from the story that the postal workers had anything to do with this particular law. If you have a complaint about your service, I suggest filing it with the Postmaster.
CaringFool. What pilots? Have you ever seen a plane wirh USPS markings? No one has because the USPS contracts with airlines and UPS, FED EX and any other parcel carrier to move the mail.
@Jazzzzzz...The Postal Service is a private company but the treasury pays it's bills.
Its actually the opposite. The US Govt owns the postal service but Treasury does NOT fund it. That's why it can't maintain losses.
Has anyone noticed the price of fuel goes through the roof and Postal Service loses billions .Has anyone thought of electric vehicles . OH the oil companies only owns Obama not the everyone of us yet, Wake UP America!!!
Gary, starting and stopping is the major drain of batteries on electric vehicles. Even hybrids couldn't be viable once you factor in the costs of conversion to hybrids. Altho it would create thousands of jobs and would be good for the planet, the intial costs would be astromical.
Currently, the cost of health care is rising at a much higher rate than inflation. Even if we were to implement your beloved single payer, at a certain point we can not afford to pay for every new treatment and technology that comes along if we want to have any semblance of an economy. If you dont have insurance you should check out "Penny Health" for information on how to get one.
Sounds like FedEx or UPS had some influence in this little law. Gotta love special interest lobbying!
Where did you come across that info?
Perfect example of a government program that simply is not needed anymore. Email, fedex, UPS, fax, DHL. The list goes on. So many private sector companies that offer superior service, both in organization and in execution, when compared to what can be provided by the federal government.
But no one else can touch the cost. 44 cents to mail a letter, versus a few dollars with anyone else? I would imagine that mail as we know it would cease to exist. Paperless statements and bills would be required. Hope you have good reliable internet connection and EXCELLENT virus and scam protection.
Fax?
I haven't sent or recieved a fax in five years.
Hell, lots of us don't even have land line phones anymore.
Unfortunately, the US still has a very large older population that is NOT tech savvy. Many older Americans don't have or use computers and have no clue how to use a smart phone. They need a low cost way to pay their bills and send correspondence. Eventually, we should phase snail mail out but we're not there yet.
Unions, Demorats and Odumbo destroy everything they touch.
... and Republicans, and lobbyists, and special interest groups, etc.
Don't forget W, he was pres in 2006..
"The American Postal Workers Union and the National Association of Letter Carriers don't want to lose the benefits." + "It's $5.5 billion a year, every year, for 10 years" = public has lost faith in unions
The cost is 5.5B, the loss last year was 8.5B...is my math wrong or is there something else casuing a loss besides the benefits?
Your math is wrong. it's 5.5B since 2006/ They only posted a loss starting last year. For several years they were able to pay the 5.5B out of surplus. But 5.5B every year overwhelmed the surplus. They need a break to downsize in a controlled manner instead of a drastic cut that will require the USPS to break a legal contract they just signed guaranteeing no layoffs. They can downsize through attrition if given a couple years.
What is the meaning of funding future healthcare cost for the next 75 years for people not even born yet , if it forces you out of business now! Congress placed this cost on the Postal Service yet no other company in the USA public or private must fund 75 years worth of cost in 10 years.
There is also the continued over funding of the retirement accounts Civil Service $75 BILLION & Fer's $9 BILLION.
This is money already paid into these accounts that are not needed yet and can be returned to the Postal Service to reduce cost. They could pay off the funding of the future health cost and buyout the older workers to reduce cost.
They could also update their fleet of Postal trucks to natural gas or other cost .
Perhaps some of the unreasonable BONUS' postal supervisors give themselves is a big part of the problem???
It is obsolete.
It shall die.
The only question that remains is if I shall have to use my money to pay their benifits.
In other words its time to put them out of their misery.
See Ya! USPS! And now I wont have to worry about anybody stuffing my mailbox full of cr@p that goes directly into the trash can! Your ineffiencies like delivering mail six times a week when I get about a dozen REAL letters (bills) a month has led you to your downfall. Enjoy the ride!