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U.S. Postal Service on 'death spiral' without urgent reform - chief

Stock MarketsFeb 24, 2021 07:06PM ET
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3/3 © Reuters. FILE PHOTO: A USPS mail carrier walks past New York Stock Exchange in New York 2/3

By David Shepardson

WASHINGTON (Reuters) - The U.S. mail system is losing $10 billion a year and urgently needs reform and legislative relief from Congress, U.S. Postmaster General Louis DeJoy told lawmakers on Wednesday.

"I would suggest that we are on a death spiral," DeJoy told the U.S. House Oversight and Government Reform committee at a hearing, who did not rule out changing first-class deliver standards or other significant changes.

DeJoy, a supporter of former President Donald Trump appointed to head the Postal Service last year, suspended operational changes in August after heavy criticism over postal delays. He plans to release a new 10-year strategic "break-even" plan soon.

Delays in paychecks and other mail deliveries by the Postal Service, or USPS, gained attention this summer as a record number of voters mailed in ballots to elect a new president.

House Oversight and Government Reform Committee Chairwoman Carolyn Maloney made the case for action as the USPS faces shrinking volumes of first-class mail, increased costs of employee compensation and benefit, and higher unfunded liabilities and debt.

New Postal Board chairman Ron Bloom, who said that the USPS is currently projected to lose $160 billion over the next decade, told lawmakers "we can’t just throw money at the problem. We must address the systemic issues plaguing its outdated model."

At the hearing Representative Cori Bush, a Democrat, noted the current postal board, with only six men, lacks diversity and "looks like a millionaire white boys club?"

Late Wednesday, President Joe Biden announced he was nominating a woman and two men of color to fill three open seats on the board, including the former general counsel of the American Postal Workers Union, the CEO of the National Vote at Home Institute and a former deputy postmaster general.

The USPS reported net losses of $86.7 billion from 2007 through 2020. One reason is 2006 legislation mandating that it pre-fund more than $120 billion in retiree health care and pension liabilities, a requirement labor unions have called an unfair burden not shared by other businesses.

Maloney has circulated draft legislation on some USPS financial issues, such as eliminating a requirement to pre-fund retiree health benefits and require postal employees to enroll in government-retiree health plan Medicare, for a saving of $40 to $50 billion over 10 years. "The Postal Service is facing a dire financial situation that requires us to act," she said.

DeJoy said the reform bill alone "doesn't solve the problem." He also rebuffed calls from some Democrats to step down vowing that he will stay "a long time. Get used to it."

Bloom said the USPS will ask the Biden administration to calculate pension obligations "using modern actuarial principles" that would save another $12 billion.

Mark Dimondstein, president of the American Postal Workers Union, urged Congress to award the USPS an additional $15 billion and called for a separate "modernization grant" of $25 billion. In December, Congress converted a $10 billion U.S. Treasury loan to the USPS into a grant.

U.S. Postal Service on 'death spiral' without urgent reform - chief
 

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Comments (6)
Connecticut Yankee
A_Jaundiced_Eye Feb 24, 2021 10:37PM ET
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"the CEO of the National Vote at Home Institute." THAT's why Biden and the Dems want the Post Office fully-staffed: to deliver all those mail-in ballots for the elections.  Let's see: 240 million eligible voters, that's one ballot for every Republican and two for every Democrat...
Tre Hsi
Tre Hsi Feb 24, 2021 10:37PM ET
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hate to introduce facts to your rants, the states with most early votes increases from 2016 are Texas and North Carolina, and Trump won both states, no frauds reported.....that's all, now you can go back to your rants
Walt Bishop
Walt Bishop Feb 24, 2021 10:20PM ET
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Worst service on the planet, and spiraling doen from there. Ignorant employees who even state that they don’t give a ****** Shut this scam outfit down. Privatize and allow opt-in only service to those who want junk mail ads. Useless the last 20 years.
Tre Hsi
Tre Hsi Feb 24, 2021 10:20PM ET
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you know who refused to let US Post Offices shut down low volume branches?  republican politicians from rural districts, apparently their voters really like and want postal services, go figure.....
Keith Moore
Keith Moore Feb 24, 2021 9:45PM ET
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I paid 25 dollars to get next day air from Tennessee to Virginia and it took 3 days to arrive!!! You have got to be kidding me... They now use covid as their master excuse YET Fed-Ex and UPS have no problem. I will NEVER USE USPS AGAIN.
Nick Glaser
Nick Glaser Feb 24, 2021 9:15PM ET
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I only want my mail delivered once a week. Its all catalogs and junk mail. All the important mail comes via electrons
Steve Lora
Steve Lora Feb 24, 2021 1:58PM ET
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I just renewed my "Post Office Box" and was shocked to see it was increased by almost 40%. Thats right. If UPS boxes and others are smart, they will match USPS..im shopping
Me comment
Me comment Feb 24, 2021 11:45AM ET
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The outlandish government pensions are finally catching up, just don't recommend privatizing the USPS just lock at how that worked out for the Texas power utility grid.
 
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