The U. S. Postal Service (USPS) is set to implement its 2nd phase of closures and service reductions in January 2015 but it is facing strong opposition from the National Association of Letter Carriers, the American Postal Workers Union and some Congressmen in November 2014.
The USPS is an independent agency funded by postage fees rather than taxes; however, the agency is overseen by Congress. In 2006, Congress passed measure requiring the USPS to prefund retiree health benefits at a cost of $5+ billion per year. This measure is primarily responsible for pushing the USPS into the red and combined with the 53% reduction in first class mail within the past decade, forced the USPS to the brink of bankruptcy.
In response, the USPS devised a consolidation plan in 2011 to cut spending and boost profits. Implementing the plan’s 1st phase, the USPS closed 141 processing facilities in 2012 – 2013. The plan’s 2nd phase, originally scheduled for 2014 but pushed back to January 2015, the USPS plans to close 82 additional facilities and alter service for 1st Class mail such as letters, bills and greeting cards, slowing its delivery. The USPS estimates that 1st Class mail that currently reaches a destination facility overnight will take 2 days under the new measures. Finally, the USPS asserts that Priority mail and packages will not be affected by the changes.
To date, the consolidation plan is working: but for the requirement of prefunding retiree health benefits, the USPS turned a profit of $1.3 billion thus far in 2014. The USPS further believes that all the closures/consolidations in both plan phases will save the agency $2.1 billion per year.
According to the USPS, this is a result of responding to the changing mail: e-mail has eliminated more than 50% of 1st Class mail while online shopping has significantly increased the delivery of packages; by consolidating facilities – closing some, reducing staff at others and increasing staff at still others – the USPS is successfully adapting to current mail usage in the U. S.
The planned closures in 2015 are facing stiff opposition by unions and some Congressmen. They maintain that the closures will cost more than 7,000 jobs, will further increase mail delivery times and otherwise worsen service, and will ultimately result in a “death spiral” in which the USPS is used less and less by Americans who find it less and less reliable. In hopes of delaying or completely stopping the closures, USPS employees planned 150+ demonstrations for across America in late November 2014. The unions hope to persuade either the USPS or Congress to further delay the closures. Thus far, the unions appear to lack sufficient Congressional support for the delay.
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