The Next Big Bailout: The US Postal Service

In fiscal year 2010, the Postal Service suffered a $8.5 billion net loss and about the same amount this year, which is a trend of widening losses.  The Postal Service has nearly 600,000 employees; it’s larger than the active component of the United States Army.  There are over 3,000 post offices out of a total of 32,000 across the country that generate less than $27,500 in annual revenue. It’s barely possible to pay rent and keep the lights on with that kind of revenue, let alone hire a staff, maintain delivery vehicles, or pay for fuel.  Here are some further facts:

1. About 80 cents of every postal dollar pays for employee salaries and benefits (compared to less than 50 cents for FedEx and UPS).
2. Employees have no-layoff clauses, the starting salaries are about 25% to 30% higher than for comparably skilled private workers, and the fringe benefits are so expensive that the Government Accountability Office (GAO) says $500 million a year could be saved merely by bringing health benefits into line with those of other federal workers. 

Now, since email has replaced smail, I would imagine the Postal Service will be asking Congress to implement a Federal Excise Tax (FET) and a Federal Universal Service Tax, which would be similar to what phone companies charge you now for service to rural areas.  Both of these taxes would go directly to the Postal Service to cover health benefits and pension benefits.  Get ready internet users, you will see it soon on your Internet Provider's bill.  Someone has to pay their salaries, health benefits, and retirement benefits, and it will be you!