Post office reports record $15.9 billion loss

U.S. Postal Service trucks are seen parked near the loading dock at the U.S. Post Office sort center Aug. 12, 2011, in San Francisco.

/ Getty Images

The U.S. Postal Service reported a net loss of $15.9 billion for the fiscal year ending September 30, a record for the agency, as mail volume continued to fall.

The Postal Service's loss was driven in part by a requirement that the semi-government agency prefund retiree health benefits to the tune of $11.1 billion. Even without that payment, however, the agency would have nearly matched last year's annual net loss of $5.1 billion.

In announcing the news, Postmaster General Patrick Donahoe called on Congress to act to help get the mail delivery service onto sound financial footing.

"It's critical that Congress do its part and pass comprehensive legislation before they adjourn this year to move the Postal Service further down the path toward financial health," he said. The Postal Service is seeking more leeway to manage its business independently and reductions in prefunding retiree health benefits.

A plan put forward by the agency requests approval to determine delivery frequency - which would likely mean the elimination of Saturday delivery - the right to offer non-postal products and services, a "more streamlined governance model" allowing for quicker decision-making on pricing and other business decisions, and that arbitrators take into account the financial woes of the agency during labor discussions.

The Postal Service is legally prohibited from accepting tax dollars, but it has been borrowing from the U.S. Treasury to stay afloat. Federal law dictates that such borrowing be capped at $15 billion. Having exceeded its borrowing authority in September, the Postal Service defaulted on more than $11 billion in payments to the Treasury earlier this year.

First class mail delivery dropped 3.9 percent over the past fiscal year, and standard mail dropped 4.3 percent compared to last year. Package services delivery ticked upward, but overall total mail volume fell from 168.3 billion pieces a year ago to 159.9 billion this year.

The Postal Service, which has 530,000 employees, has cut 504 million work hours since 2000 and made changes to delivery routes in response to declining mail volume. But it needs approval from Congress to make the sort of structural changes that would allow it to start climbing out of its financial hole. Under the current structure, it is not clear that the Postal Service will be able to continue meeting its obligations to employees and suppliers for much longer; Donahoe descried liquidity as a "major concern" that illustrated the need for congressional action.

At a Board of Governors meeting Thursday, MarketWatch reported, officials predicted the agency will run out of money in October of next year. According to Bloomberg, Donahoe said that while the Postal Service is "walking a financial tightrope," it will never stop delivering the mail. "We are simply too important to the economy and the flow of commerce," he said.

But Congress' attention during the lame duck session will largely be elsewhere. Lawmakers will be focused primarily on averting the combination of spending cuts and tax hikes known as the "fiscal cliff," and the Postal Service's problems are thus likely to receive little attention.

There are competing proposals in the House and Senate to make changes to the Postal Service. The House proposal would create a commission to oversee the closure of facilities, Bloomberg reports, while the Senate measure, which passed earlier this year, would make it more difficult to close facilities or reduce delivery to five days per week. Both proposals would reduce the burden on the agency to prefund future retirees' health benefits. The House has not passed a bill.

[travis123abc]

Here is a funny joke I saw about he post office getting corporate sponsors, http://ponderingstuff.com/2012/11/25/corporate-sponsors/

[marychgo]

C'mon, Brian, do you have to write insane sentences to meet someone's standards of "objectivity"? You wrote: "Even without that ($11.1 billion pre-funding) payment, however, the agency would have nearly matched last year's annual net loss of $5.1 billion." It would have been just as accurate -- and clearer for your readers -- if you'd written: "Without that payment, the agency slightly reduced its annual net loss from last year's $5.1 billion." In fact, USPS REDUCED its loss (other than the pre-funding that anyone sane agrees should be eliminated) by 6%!

[GOP-R--Con-Men]

Democrats must eliminate the law republicans put on the post office requiring it to fund pensions 75 years in advance. No business can stand under those circumstances.

[DGgolfer]

According to Govtrack.us the law in question, H.R. 6407 the Postal Accountability and Enhancement Act passed the House by a voice vote and unanimous consent in the Senate. Now not only did the GOP not have a filibuster-proof majority in the Senate, all 44 Democrats and the lone independent in the Senate consented to the bill. Additionally, two of the three cosponsors for this bill were Democrats.

[DJ_32_1205]

Dumb ass GOP R Con Men, he just can't get it right

[ammo17]

did anyone ever see the postmaster general makes and all his benefits.way more then the president of the united states.another affirmative action job.

[LVStudio]

Let's put Romney in charge of it!

[ammo17]

i want him put in charge of the veterans administration.another affirmative action job.and with him there he won`t allow the va to spend $6.1 million dollars for parties for the disfuntional people who work at the v.a. in d.c.the medical treatment is great so it would be nice if he let it alone.

[lauralynnstrauss]

The post office needs to hire an experienced CEO who knows how to run a business. Just like the USA needed to vote for an experienced CEO like Mitt who could of put our economy back on track. Big government doesn't work.

[RetiredArmy_Nurse]

Oh boy, another one of these posts. Pls refer to my previous posts. The PO has a problem because a repug congress under a repug prez mandated it to fund its retirement system for 75 years. THAT is the problem and no CEO could ever figure a way out of it. The teabaggers did this to defund the PO and pave the way to privatization. Stop blaming the PO, put the blame where it belongs on a teabagger congress that wants to destroy this great public service.

[rightontarget]

"an experienced CEO like Mitt"????? Really???????? LMAO!!!!!!!!!!! Ok, break it down into little pieces and then sell it off to the private sector OR we can just "outsource" the service altogether. I think NOT!!!!!!!

I agree with retiredarmy_nurse. "The teabaggers did this to defund the PO and pave the way to privatization. Stop blaming the PO, put the blame where it belongs on a teabagger congress that wants to destroy this great public service."

They want to "privatize" EVERYTHING and that would REALLY mess everything up for the general public. Can you say "greedy"?????

[formerlyluvnut]

I can't imagine why with all the new Post Office buildings everywhere with the high dollar granite, marble, etc etc etc. It's ALL Bush's fault too btw.

[VICTORYDEM]

Most everything is...

[TimeToEvolve]

Just raise the rate of first class mail to $1. That's what it is in Canada and that is still a steal compared to the greedy corporation rates.

[mountainstates1]

You can blame Republicans for the bankruptcy of the Post Office.

[VICTORYDEM]

I do....

[The_pragmatist2]

Easy now...I am sure the Government will do a much better job at managing health care services.

[TimeToEvolve]

There is absolutely no doubt that compared to the inefficiencies and corrupt of corporate Amsrica, the government can do it better. Just look at the VA and Medicare programs.