What lies ahead for the U.S. Postal Service if nothing is done to brake its financial slide? Postmaster General Pat Donahoe tossed out an attention-getting benchmark today.
“This is Greece,” Donahoe told participants at the PostalVision 2020 conference, as he highlighted a slide showing the Postal Service with $92 billion in debt by 2016 (up from about $12 billion last year), assuming that Congress doesn’t act on pleas for relief from the requirement to pump billions of dollars annually into a health care fund for future retirees. Greece, he said, has a debt-to-gross domestic product ratio of 1.6 to one. By 2016, the Postal Service’s debt-to-income ratio would be 1.5 to one.
But Donahoe also rejected the idea that the retiree health care funding requirement is the only root of the mail carrier’s ills. Among other needed prescriptions, he said: Eliminating most Saturday delivery and giving management more day-to-day flexibility. “You cannot operate with 1940 work rules,” he said. Donahoe also reiterated hope for the future of mail as a medium, saying that it represents “the most direct way to get in front of a customer’s eyes.”
Donahoe was this morning’s keynote speaker today at the two-day conference, which aims to provide a big-picture view of what the nation needs out of the Postal Service in the 21st century.
More immediately, the agency has another crisis looming Aug. 1, when it’s supposed to make a $5.5 billion payment into the retiree health care fund. That payment was originally due last September, but lawmakers pushed it back until this summer. The Postal Service appears no more able to cover the full amount now, however, and a similar-sized installment is also due at the end of this September.
“We’ll have to talk to our board and then we’ll go from there,” Donahoe said when asked after his speech what the Postal Service plans to do. That board is scheduled to meet later this week, he added, “and then we’ll make decisions on how we approach it.”