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Post Office on the Brink of Default

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  • Description

    FBN’s Gerri Willis on the financial crisis facing the U.S. Postal Service.

  • Duration 2:55
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Neither rain nor snow nor sleet nor -- -- keep the postman from delivering your mail.

But you know a major budget -- in gap that is it could that's the word today from postmaster general Patrick Donahoe to a senate committee.

Our situation is urgent.

The congressional action is needed immediately to avoid this fall.

Mr.

chairman the Postal Service requires radical changes to its business model the business remain viable into the future.

So He is a warning the entire post office may shut down this winter and let's congress allowed him to take emergency action.

Now one of the main problems a five and a half billion dollar payment due this month to finance retirees future health care.

But solving that it won't erase the -- more than nine billion dollar projected deficit for this year.

The post -- is drowning under decades of promises made to unions labor represents more than three quarters of the agency's expenses.

Compare that with a post offices competition only about half of the UPS -- expenses go to labor.

And only about a third of FedEx according to published reports.

Donahoe has a plan to cut twenty million dollars in the next few years but He can't.

Without congress enacting legislation overturning the job protections agreed to in recent union contract negotiations.

And -- being forced to put off a plan to close 3700 post offices and cut the number of sorting facilities by more than half.

Why because it would include laying off 220000.

People whose contracts say they can't be laid off.

Well not to mention the problem -- mentioned earlier the 2006 a lot requiring the post office to pay billions every year for retiree benefits.

But -- drag on a post office's bottom line is just one of the handful problems the other big issue is this.

Fewer and fewer people use the conventional mail these days.

The post office will only handle a 167 billion pieces of mail this year and that's down from over 200 billion in 2006.

Some say could -- -- only a 118 billion pieces of mail this decade.

So Donahoe is asking congress not only to -- -- to make necessary layoffs.

But also to -- Saturday mail delivery.

But some of the senate including Republican senator Susan Collins are refusing to budge on the issue saying rural America depends too much on six day a week delivery.

Other ideas for cutting costs -- post offices to double its another institution like a bank.

Allowing alcohol delivery is allowing commercial advertisements.

And working -- FedEx and UPS and their deliveries.

But in the spirit of Washington no one seems to be getting on the same page here if we can -- the post jobless without spending taxpayer dollars in yet another bail -- To do it.

If not -- may be time to widened down the post office and unions have nobody to blame but them.

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