A nickel increase in the first-class stamp cost to 50 cents is part of the U.S. Postal Service's newest plan to stop bleeding red ink.
The Postal Service introduced the 5-year business plan to The legislature late Thursday in part to push The legislature to pass laws to help them get through ongoing economic woes. Due in large part to decreasing first-class mail volume, the services recorded a $3.3 billion dollar loss in the final three months of last year, which is usually a lucrative period.
The Postal Service says that, if nothing is done, it faces $18 billion dollars in losses by 2015. Lawmakers have been working on various plans for months, but all of them have debatable aspects and are stalled.
The U.S. Postal Service's plan would save about $20 billion dollars over the next five years, even though it needs The legislature to act to accomplish about $10 billion dollars in financial savings.
Nearly all the ideas in the five-year plan have been suggested before, except for the big first-class stamp boost. Increasing the price of the stamp to 50 cents from 45 cents now could yield $1 billion dollars a year in new profits, in accordance to the plan.
Among formerly offered plans, home delivery would be cut to five days a week from six, and countless numbers of post offices and mail handling plants would be closed. The service would slow the distribution of first class mail by a day.
The agency also proposes skipping a federal law that requires that it to prefund retiree health care. It would also generate a new health care plan for staff members to be run by the Postal Service.
The plan would also reduce the number of staff members by 155,000 by 2016, mainly through forcing some of the 283,000 qualified to retire.
Nevertheless, most of the cost-cutting procedures the Postal Service is pushing for are questionable, and have opponents in The legislature and among employee unions.
The National Association of Letter Carriers promised to study the new business plan but decried moves to cut Saturday delivery, downsize networks and slow delivery.
The union also noted that nearly all of the $3.3 billion dollars in red ink the Postal Service documented in the quarter resulted from the $3.1 billion dollars owed to pre-fund future retiree health benefits. The union wants The legislature to dispense with the 2006 mandate that demanded prefunding those benefits.
In December, the Postal Service released a plan to shut up to 250 mail handling plants and cut 28,000 jobs across the country, but later postponed the closures until May 15. The plan launched Friday makes clear the Postal Service hopes to push forward with proposed cuts if The legislature doesn't act. Now Let's Hear What You Have To Say. leave a comment below and let the rant begin!