U.S. Postal Service going way of Greece, chief says
(Reuters) - The head of the U.S. Postal Service on Tuesday compared the cash-strapped mail agency to Greece and said Congress must pass a restructuring plan if it is to return to profitability.
"If we don't do something about the costs of this organization, we are going to look...like Greece," Postmaster General Patrick Donahoe said during a conference on the future of the U.S. Postal Service.
"People laugh when I say that, but it's true," he said.
The service lost $3.2 billion in the first three months of 2012 and recently began offering buyouts to thousands of employees in order to reduce its workforce. The agency has borrowed heavily from the government to meet its obligations.
Officials say drastic changes are needed to head off annual losses as high costs eat up shrinking revenue due to Americans' increasing online communications. The agency does not receive taxpayer money to pay for operations.
Donahoe said the agency's debt-to-revenue ratio is not far from Greece's debt-to-GDP ratio.
Generous public-sector salaries and pensions have driven Greece's debt load up to unsustainable levels. The nation is in the midst of political turmoil as it grapples with whether to accept a bailout in exchange for drastic austerity measures.
Donahoe told reporters after the speech that he did not believe the U.S. Postal Service was likely to default on payments or require a taxpayer bailout.
But he said Congress needs to step up and restructure the agency, or risk a fate similar to Greece.
"Unfortunately, if we don't do something, it will look like that," Donahoe said.
The U.S. Postal Service's profitability plan, which it wants Congress to approve, would reduce the number of facilities and workers, end Saturday mail delivery, pull employees out of federal health plans and into a postal plan, and eliminate a massive annual payment for future retiree health benefits.
The U.S. Postal Service needs permission from Congress for much of its plan. The U.S. Senate passed a bill in April that would give the service some of the authority it wants. The bill has gained little traction in the House of Representatives.
Leaders in the House tentatively expect to vote later this summer on a different bill, which would then have to be reconciled with the Senate version.
Donahoe spoke at PostalVision 2020, a conference focused on adapting the Postal Service as Americans increasingly send email and pay bills online. He told the audience that the agency must both cut costs and find new ways to expand its business.
For instance, the agency is looking at possible growth opportunities in its package business, which has been a bright spot in bleak financial quarters as users of sites such as eBay.com ship goods via USPS. That could include delivering packages at different times or expanding package delivery to seven days a week, Donahoe said.
(Reporting By Emily Stephenson)
- Maine nurse fights Ebola quarantine, says will not be bullied |
- Dollar surges as Fed ends QE on hawkish note
- SoftBank's humanoid robot lands job as Nescafe salesman
- Ukraine gas supplies in doubt as Russia seeks EU payment deal
- Clashes erupt as Israeli police kill Palestinian suspected of shooting Jewish far-rightist