Obama proposes $20bn in financial relief for USPS

Obama proposes $20bn in financial relief for USPS

US President Barrack Obama has proposed a new Budget that seeks more than $20bn in financial and operational relief for the US Postal Service. The 2015 Budget proposes to return $5bn in pension surpluses to USPS over two years and restructure the Postal Service’s retiree health benefits pre-funding system to potentially provide $9bn in relief up to 2016.

It would defer about $16.7bn in payments defaulted by USPS in 2012 and 2013 to spread repayment out from 2017.

The President’s Budget also proposes some operational changes in the US Mail, starting with an immediate move to abandon Saturday mail delivery and move to a five-day-a-week schedule.

USPS would be freed up to collaborate more with local and state governments in order to generate more revenue, while the Budget would also require USPS to move toward centralized or curbside delivery “where appropriate” instead of delivering mail to the doorstep, in order to save costs.

In a move echoing proposals in the Senate that have proven unpopular with major USPS customers, the White House is also proposing to permanently extend the “exigent” or above-inflation postage rate increase granted on a temporary basis by the Postal Regulatory Commission back in December.

The White House said the Postal Service had “enormous value” to the nation’s commerce and communications, and therefore there was a need for reform to ensure its future viability.

It said: “The Budget proposals specific authorities to improve USPS efficiency and net revenue, along with financial relief measures, grounded in principles of fiscal responsibility as well as sound financial management.”

Progress

The US President has proposed major financial relief for the struggling US Postal Service before in his budgets, but has not made any progress so far. The US system means the President can only propose legislation to Congress, and hope Congress gets on board.

Previous postal reform proposals coming out of the White House were jettisoned in order to secure Budget agreement in a split Congress.

The White House insisted it would work with Congress and postal stakeholders to secure the necessary reforms.

“Together, these reforms would set USPS on a sustainable business path, providing it with over $20bn in cash relief, operational savings and revenue through 2016, and yield an estimated PAYGO savings of $38bn over 11 years.”

Commenting on the Budget, postal reform advocate Senator Tom Carper welcomed the Budget proposals.

He said: “I appreciate the president’s continued support for postal reform, and welcome his budget’s inclusion of a number of key principals in the bipartisan Postal Reform Act that was approved by our committee last month, including the more accurate calculation of postal retirement costs, the restructuring of the postal service’s retiree health benefit payments, and the permanent extension of the exigent rate increased authorized by the Postal Regulatory Commission in December 2013.”

USPS mail customers continued to express their reservations with the idea of making them pay to bail out the current Postal Service, but also had warnings about making further cutbacks to “essential” services.

However, the Greeting Card Association applauded the measures that would make postal delivery more efficient.

Rafe Morrissey, Vice President of Postal Affairs at the GCA, said: “The President’s budget, like proposals in the House and Senate, continues to assume dramatically exaggerated savings from cutting essential services, and if adopted, would lead to a weaker Postal Service.”

“While we are disappointed that the budget proposal continues to advocate for critical service cuts, we are pleased to see that it endorses a move to centralized delivery where appropriate. Such a move offers much greater savings potential while maintaining a competitive level of service.”

Relevant Directory Listings

Listing image

KEBA

KEBA is an internationally successful high-tech company with headquarters in Linz (Austria) and subsidiaries worldwide. KEBA is active in the three operative business areas: Industrial Automation, Handover Automation and Energy Automation. The company has been developing and producing for more than 50 years according to […]

Find out more

Other Directory Listings

2 Comments

  1. John Currah

    “the Budget would also require USPS to move toward centralized or curbside delivery “where appropriate” instead of delivering mail to the doorstep, in order to save costs.”

    – This sounds similar to Canada Post’s announcement thay they will to begin phasing out to-the-door mail delivery in a number of urban centres across Canada.

  2. Cindy Kirby

    This article is irresponsible..it sounds as thought the government is proposing to bail out the Post Office. The President is proposing to return stamp payer, ie revenue generated by services to the Post Office for over funding their pension plan. And they are proposing to stop the unfair requirement to pre fund future retiree health benefits for people not even born yet. The Post Office is the only agency with two over funded pension plans and with $50 billion in a retiree health benefit account. And its revenue exceeds operating costs! The disastrous cuts to service are not the answer..

Advertisement

Advertisement

Advertisement

P&P Poll

Loading

What’s the future of the postal USO?

Thank you for voting
You have already voted on this poll!
Please select an option!



MER Magazine


The Mail & Express Review (MER) Magazine is our quarterly print publication. Packed with original content and thought-provoking features, MER is a must-read for those who want the inside track on the industry.

 

News Archive

Pin It on Pinterest

Share This