CBS News. Strangely, it is not actually required to do anything in a crisis by either postal law or Executive Order 13527, the Obama-era directive on national responses to anthrax and biohazard attacks. Public debt already is $24 trillion, so the public is not terribly harmed by assuming this additional debt — especially if it helps stave off the collapse of the USPS. âThe Purple Book gives us an in-depth understanding of the risks we face from the universe of schemes we protect,â said PPF chief risk officer Stephen Wilcox. The deficit-to-GDP ratio set a record of 26.9% in 1943 as the country geared up for World War II. It is the lone government agency that visits our homes and businesses on most days, and with stores largely shut down, the USPS is keeping us supplied with food, clothes, distance-schooling materials for kids, prescription drugs, and books to keep our minds off what’s happening outside our doors. Then Congress needs to strike a grand bargain for postal reform—a deal that would both save the post office from short-term insolvency and align the agency’s revenue and costs over the long term. Dropping 100,000 employees might be more cuts than USPS wants, but it can always hire new, and less expensive, replacement employees. The Congressional Budget Office (CBO) projects that this deficit for 2020 will be 16% of U.S. gross domestic product (GDP), which is the largest it's been since 1945. More Democrats are calling for an emergency appropriation to the postal service, but the GOP has maintained a stony silence, likely put off by liberal activist messaging that Trump and his party want to bankrupt the post office and sell it off to vulture capitalists. There are no signs that it has done so. The Postal Service employs more than 97,000 military veterans and is one of the largest employers of veterans in the country. All federal pension and retirement benefits are paid from the U.S. Treasury. (And Trump has his doubts.) Passed by a Republican-led Congress and signed into law by President George W. Bush, the PAEA gave the Postal Service new accounting and funding rules for â¦ Postal Service. A U.S. Fourth, the postal service should be free to choose to stop delivering paper mail six days a week — once all the stimulus checks are in the public’s hands. The Finance Commission provides a mechanism for the Centre to compensate for revenue loss incurred by states, which is referred to as post devolution revenue deficit grant. Full text is unavailable for this digitized archive article. "The international community [should] work together in solidarity to stop this virus," he said. Amending the law to let the post office raise prices at the CPI plus 1 percent could bring in an additional $700 million in revenue per year. Which has not happened in the post officeâs two-century ... of the more than $40 billion in its retiree health benefits fund in index funds. As late as the 1970s, Congress gave the USPS an annual public service obligation appropriation to help it cover the costs of delivering mail to every American household, no matter how remote. The Postal Service Lost $3.9 Billion Last Year Despite a $1 billion increase in revenue, unsustainable personnel costs pushed USPS' losses to such great heights. Legislation already exists to make this happen, and it can be cut and pasted into the rescue package. With the stock market so low, this plan — which has support from some on the right as well as one of the postal unions — could produce huge financial returns if enacted quickly. The next bailout needs to match money with some long-overdue reforms. The Position of the Post Office Savings Bank and How to Deal With Its Deficit of £11, 000, 000 (Classic Reprint): Marks, Alfred: Amazon.com.au: Books Key Takeaways The current U.S. federal budget deficit is projected to be $3.3 trillion, according to the CBO. But the story's more complex than that. POST OFFICE DEFICIT ABOUT $10,000,000; Burleson Says Exact Figures Are Not Ready, but for Nine Months It Was $8,000,000. Most federal pension dollars are invested much more broadly, and the USPS should be authorized to invest some of the more than $40 billion in its retiree health benefits fund in index funds. A United States Postal Service delivery truck. "It is my belief that the World Health Organization must be supported, as it is absolutely critical to the world's efforts to win the war against COVID-19." Historical Data on ... CBO Report Revealed Another Large Deficit. comments. All told, these reforms would cost American taxpayers around $16 billion — far less than the massive bailouts proposed to date. This is in part the fault of USPS leadership, which played its cards badly in the run-up to the recent $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act). By Dave Johnson. This change is way overdue — USPS cannot be expected to survive if most of its overhead cost is uncontrollable, especially in an era of lower demand for mail. So how come we're no longer talking about a "debt and deficit disaster"? UPDATE: Some text in the final paragraph has been revised. | Mario Tama/Getty Images. Paying its employees accounts for 80 percent of USPS’ budget. (When some postal workers went on strike in 1970, President Richard Nixon called out the National Guard to fill in; the possible economic calamity was that large.). At the same time, the crisis is threatening to wipe out the Postal Service financially. Presently, the agency gets no extra financial support when it serves in a crisis. The massive post office deficit that is driving management to commit institutional suicide by ending six-day delivery, closing half of the nation's 30,000 or so post offices and half its 500 mail-processing centers, and laying off more than 200,000 workers, is make-believe. Here’s a straightforward plan for how it could work, which would require only modest changes to law and would share the burden between the biggest stakeholders: the public, USPS workers, and the mailers and shippers who pay the USPS’ operating costs. It works exactly the same for retiree pensions and benefit funds. That ability is measured by the deficit divided by gross domestic product (GDP). With the economy already in a free fall, a shutdown of the USPS might just tip the country into a depression. The vast portion of mail is sent by businesses, so Covid’s stalling of the economy has cratered mail volume. Latest News from. A U.S Postal Service Inspector General study made it clear that this investment strategy all but ensures the agency will default on these obligations to its workers and the taxpayers will have to bail them out. And as it does, it may irreparably damage an agency that for years has been running multibillion dollar deficits and weighted down by $130 billion in unfunded employee benefits. Private delivery companies move a lot of packages, but don’t go to every household in the country; often they pay the USPS to carry small packages for the final stretch. | Scott Heins/Getty Images. The USPS should be provided with a $1 billion annual appropriation in exchange for committing to deliver medicines and other critical supplies in the event of a national disaster. The Rudd government's debt peaked at $160 billion and the Morrison Government's debt is expected to near a trillion dollars. $14,500,000 NOT EXPENDED Of Funds Appropriated for the Year -- â¦ Second, the Postal Service needs the liberty to fix the way it funds its retiree health benefits fund, which has a $70 billion shortfall. Deficit Trends . WASHINGTON, July 4. How George Bush broke the Post Office. On the whole, it did not go well. What legislators and the public know about the USPS’ financial health is little more than a few scattered data points that have appeared in news stories. On March 18, 1970, postal workers in New York Cityâupset over low wages and poor working conditions, and emboldened by the Civil Rights Movementâorganized a strike against the United States government. The strike initially involved postal workers in only New York City, but it eventually gained support of over 210,000 United States Post Office Department workers across the nation. Third, the USPS should be authorized to raise its prices a little more — after the Covid-19 economic downturn ends. We all depend on it more or less, and so long as the coronavirus is around, we’ll be especially reliant on it. On one hand, it has revealed just how much we depend on the U.S. It's time for the public to demand that Congress act to end the crisis. Only a few Democrats publicly spoke up for helping the agency, and the GOP and President Donald Trump balked when a $30 billion bailout was dropped into a version of the House’s Covid legislation. Although it’s expected to find a way to fund these obligations, the USPS may invest only in U.S. Treasuries, which deliver paltry annual returns. In this crisis, the postal service matters even more: Tens of millions of Americans received a postcard from the Centers for Disease Control and Prevention recently that reminded them to socially distance and take other precautions. The total deficit is based upon gross revenues of $67 Billion. CNET. Unions are right to drive a hard bargain for their members, but they are aided and abetted by federal arbitrators who almost always side with the unions over management. April 16, 2018. Depending on the magnitude of the revenue drop-off, the agency may run out of liquidity and be forced to cease operations this autumn or winter. No doubt the USPS is hurting badly, and it could run out of cash and shut down. Postal Service is too big to fail. Ultimately, the CARES Act offered only a $10 billion supplemental lending line to the postal service. To put it into perspective, as a percentage of revenue, the post office ran a deficit of 12% of its total intake. Congress could appropriate $5 billion to the agency to use to give 100,000 of the most senior employees $50,000 buyouts tax free. Seventh, and finally, postal operating costs tend to go up because collective bargaining always produces agreements that raise compensation costs. Presently, the law limits price increases for most paper mail to the consumer price index. Postmaster General Megan Brennan should get on Zoom and give a public presentation that shares the data on where mail volume, revenue and operating costs are and where they are headed. So far, Congress hasn’t moved to bail it out. A crisis is being engineered to get people complaining about the "slow, inefficient" Post Office. Last week, USPS leadership tried again, telling the House Oversight and Government Reform Committee that the agency needed an eye-popping $75 billion to avoid going belly up. The Post Office is calling for more federal cash and, again, blaming unreasonable retirement funding requirements. Expected to post a deficit this year in excess of $8 billion, the postal service, which doesn't receive a dime of federal taxpayer subsidy, must pay the government roughly $5.5 billion annually. The U.S. The reduction could be achieved through buyouts. All of the spending increases he has authorized since taking office have been financed by U.S. government funds. Though 90 percent of its income is derived from the sale of stamps, the post office is also the largest savings bank in the country, and the largest agency with a transfer of money. Some of the people who qualify for relief checks from the IRS will receive them in their mailboxes. And in November, with the virus still on the loose in the population, millions of worried Americans will depend on the USPS to vote. But if it really wants Congress to open the purse strings for a rescue plan, the agency needs to put its cards on the table. -- Postmaster General Burleson issued a statement today, in which he said: View Full Article in Timesmachine », See the article in its original context from. Kevin R. Kosar is the vice president of research partnerships at the R Street Institute. By law, the agency is supposed to file a publicly available report with the Postal Regulatory Commission when it faces a material change in its financial condition. Again, demand for paper mail has plunged, and it is financially irresponsible to force mail carriers to haul mostly low-margin advertising mail more than five days per week. Sixth, the Treasury should forgive the USPS’ present debt, which is around $10 billion. 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