Investigators for the Government Accountability Office have concluded that the business model of the Post Office is so badly broken collapse is imminent. First class mail volume is in free fall and the USPS doesn’t have a viable plan to address the evaporating revenue. Meanwhile, bulk mailers and the postal workers unions are lobbying for what else? The mother of all bailouts. 
The Post Office has 571,000 full-time employees, making it the country’s second-largest civilian employer after Wal-Mart. It has 31,871 post offices, more than the combined domestic retail outlets of Wal-Mart, Starbucks and McDonald’s. If it were a private company, it would be 29th on the Fortune 500. Put another way, the Post Office will soon painfully redefine “too big to fail.” 80% of the Post Office’s operating costs go to salaries and benefits. Contrast that to FedEx’s 43% and 61% at UPS. Since 2007, the Post Office has stayed afloat by borrowing $12B from the federal treasury and this year it will reach its statutory limit. In March the Postmaster General warned Congress that USPS would default in September on $5.5B in retiree healthcare entitlements unless the Feds took over those obligations. There are of course other solutions like bulk rate hikes, an end to Saturday delivery, consolidating offices, union concessions and cutting staff through attrition. (Postal union contracts prohibit layoffs.) Yet even in the deepening shadow of imminent doom USPS just signed a new concession-free four-year agreement with the American Postal Workers Union that extends the no-layoff provision and grants a 3.5% wage increase on top of uncapped cost of living adjustments. Moving from the horrifying to the just plain kooky, Fredric V. Rolando, president of the National Association of Letter Carriers, says the Post Office should be expanding not contracting services. One of his ideas is to outfit postal trucks with sensors so mail carriers can thwart possible biological terrorist attacks. “They can work with Homeland Security to detect things that are in the air,” Rolando says. The Homeland Security Dept. declined to comment. “I really believe that the USPS is going to get to a point where, regardless of what it does with the prefunding [of retiree health care], it is going to implode,” says R. Richard Geddes, an associate professor of policy analysis and management at Cornell University. “It is either going to default on those obligations to its retirees or we are going to have to give it a direct bailout from the United States taxpayers.” Ouch.
