Thursday, March 03, 2011

Good news: Post Office Broke by End of Year

As we are are nearing a fiscal disaster, we can see one part of it approaching by the end of 2011. Despite some changes made in the United States Postal Service, it will go broke by the end of this year. Lower rates of mail coupled with high salary and benefits for the federal workers have pushed the agency under.

And just like in Wisconsin it has similar causes:

Donahoe said that as of Sept. 30 his agency will owe the federal government a payment of $5.5 billion to fund medical costs, in advance, for future retirees, and in November it will need to make a $1.3 billion payment for worker's compensation.

But it gets worse:

The requirement was imposed in 2006, and since then the post office has paid $21 billion into the fund and, during the same period, has had a net loss of $20 billion, explained Ruth Goldway, head of the independent Postal Regulatory Commission.

"Prefunding health benefits is an incredible burden," Donahoe said. "In 2007 and 2008 we would have had net profits except for the prefunding."
Great. Welcome to Wisconsin 2020 if Walker's proposals are blocked. Likely California, Illinois, New York 2015.

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1 comment:

  1. Lets get rid of the postal union and pay them around minimum wage.