The LA Times reports that in spite of 40,000 job cuts and billions in cost-saving measures, the U.S. Postal Service lost $3.8 billion in FY 2009, which is $1 billion more than they lost in FY 2008. The USPS’ financial health is “sobering” to quote Postmaster General John Potter. Decreased mail volume coupled with “the impossible demands” of pre-funding future health retiree benefits. The short-term worry, by September 1, 2010, the USPS must make a payment of $5.5 billion for its retirees. The longer-term reality: e-mail or “electronic diversion” have taken a huge bite out of mail volume.
To address the immediate-term, like other “too-big-too fail” entities, the USPS has gotten a reprieve. In October, Congress allowed them to defer contributions to its health care plan.
To address the other matter – technology’s effect on the market for snail mail – there is only one way out of the USPS’s dilemma: “Free the Mail”, as CATO’s Tad DeHaven and Chris Edwards note . But, there’s a big obstacle in the room – public sector unions.