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Cherrybell mail sorting shutdown delayed for a year

Following pressure from Tucson political leaders, the closure of the mail sorting facility at Tucson's main post office has been delayed for one year, officials said Tuesday. U.S. Rep. Raul Grijalva announced the postponement, which was welcomed by Rep. Martha McSally and confirmed by the Postal Service.
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8 comments on this story

1
343 comments
May 26, 2015, 7:36 pm
-0 +2

It is McSally’s party that pushed a law that requires funding pensions for the next 75 years that causes this problem…yet McSally instead of calling for this idiotic law’s repeal continues to grandstand but has accomplished nothing

2
76 comments
May 27, 2015, 11:26 am
-3 +0

This seems short sighted, the postal service cannot stay within their budget and have themselves been calling to reduce services in order to help balance their budget. At some point we need to stop pushing these things back further and further just because has some negatives for us locally. The cost isn’t worth it.

3
556 comments
May 27, 2015, 2:10 pm
-0 +2

@Kyle V.,

The USPS budget is weighed down by the pre-funding of retirement benefits Ś something that no other government agency is forced to do.

4
76 comments
May 28, 2015, 12:10 pm
-0 +0

@Dylan Smith

The USPS budget may be hurt by the pre-funding but a pension is being promised for the future so it makes sense to set money aside to fund those promises. This is something all government agencies should do. Just because not all do this doesn’t mean we should stop doing it where it is currently being done (I’m not sure if there are any other agencies doing this other than USPS).

The other option would be to move employees to a system that does not guarantee a set payment in the future and shifts the burden/risk of longevity/inflation to the employees. This is what much of the private sector has done moving employees to 401k type plans instead of using pensions.

5
556 comments
May 28, 2015, 12:31 pm
-0 +1

@Kyle V.,

IIRC, USPS is the only government agency required to pre-fund retirement benefits in this manner Ś which they’re being required to do decades ahead of time, over a 10-year period rather than amortizing them over 30-40 years as recommended by analysts.

From an earlier look at the situation by Remapping Debate, “Congress ties Postal Service into knots,” which we published in 2012:

Operating more like a business is precisely what the U.S. Postal Service has been directed to do ever since it was turned from a cabinet-level department to an independent federal agency in 1971. As the President’s Commission on the United States Postal Service commented in 2003, “The Postal Service should be maintained as a public entity, but refocused and reorganized to enhance its efficiency and adaptability in the face of an uncertain, and ultimately more competitive, future.”

In looking at the decisions the Postal Service has been forced to make since the early 2000s, however, it is almost as though the Bush Administration and successive Congresses had decided that the task was to make the Postal Service a failed business and a failed public service. The alternative hypothesis? That no one at the wheel knew what he or she was doing.

Although even a Postal Service not straightjacketed by counterproductive mandates would not have been immune from the economy-wide recession and from some of the consequences of declining first class mail volume, the singularly compressed retiree health benefit pre-funding requirement imposed on the Postal Service—as well as rules prohibiting the Postal Service from expanding into new businesses—figure heavily in the Postal Service’s recent woes: massive deficits, default on two occasions in the payment of its excessive pre-funding obligations, and, in terms of service,... the prospect of sharply constricted service.

***
Funding on such a long-term schedule was also the preference of others involved in the postal reform bill. Roger Kodat, at the time a deputy assistant secretary of the Treasury Department, recently wrote.., “As a finance guy, I preferred a 30-year straight-line amortization schedule for [the] Postal [Service] to incrementally prefund this future obligation, in keeping with how a private sector corporation might operate. Smooth and steady contributions help ensure a more secure future for the Postal Service and its employees—a key policy objective.”

***

The prefunding payments have had a significant impact on the Postal Service’s bottom line… In 2012, according to the Postal Service, it was projected to lose some $14.1 billion, $11.1 billion of which represented two scheduled payments into the retiree health fund…

6
76 comments
May 28, 2015, 1:20 pm
-1 +0

@Dylan Smith

I’d agree that it would have been easier to amortize it over a longer period, but would it have been better for the retirees? That I honestly have no idea about. Even those numbers in that article show that without any pre-payments the postal service would still lose $3 billion.

Given that USPS is losing money without making pre-payments and really needs to be putting something away for pensions (even if on a longer amortization schedule) I think it’s reasonable for it to scale back and reduce costs.

7
343 comments
May 28, 2015, 8:16 pm
-0 +1

Kyle you are posting Koch brothers nonsense…without the prepayments the PO is actually making a profit…andy 75 years is ridiculous…making it longer is even more ridiculous

8
76 comments
May 29, 2015, 9:06 am
-0 +0

@Cactus Dave

From Dylan’s post they quite clearly wouldn’t be making a profit, if you take out the 11.1 billion dollar pre-payment from the 14.1 billion dollar loss you are left with a 3 billion dollar loss.

Dylan Smith opined:


In 2012, according to the Postal Service, it was projected to lose some $14.1 billion, $11.1 billion of which represented two scheduled payments into the retiree health fundů

@Cactus <a href=’/local/comments/052615_cherrybell_usps//#c_6578’>

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