The U.S. Postal Service is in trouble. it loses about $7 billion a year, about $240 billion estimated over the next 10 years. A report from the Government Accountability Office says the post office's business model is not viable.
Demand for conventional mail has been falling. First-class mail volume has declined about 20 percent since its peak in 2001. Even though the post office has cut staff, it isn’t enough. While the post office is supposed to pay for itself, it has been covering its losses by borrowing from the Treasury. But the post office is nearing its $15 billion borrowing limit with the U.S. Treasury, plus unfunded pension and retiree health obligations and liabilities top $90 billion.
Wages and benefits, which account for 80 percent of Post Office expenses, exceed those of other highly paid federal workers. To compound problems, about 85 percent of its postal employees are covered by union contracts. These agreements force the use of more full-time employees than are necessary; and restrict flexibility, outsourcing and layoffs. The post office pays more for employees health and life-insurance than most other government agencies.
This is a lesson of what to eventually expect from all government-sponsored programs, including Obama Health Care.
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