Pricey election bails out Postal Service

by
October 15, 2012

WASHINGTON (CNNMoney) — The 2012 election season couldn’t have come at a better time for the U.S. Postal Service.

While still low on cash, the postal service has enough to avoid insolvency this month, thanks in large part to the mountains of political junk mail and the influx of Super PACs paying top postage rates.

Federal candidates, political parties and special interest groups are mailing out more fliers and postcards via the postal service in 2012 than in previous election cycles. Spending topped $28.9 million through the end of August, compared to $27.9 million for the entire election cycle in 2008, according to the Center for Responsive Politics.

The postal service is on track to surpass an original estimate of $285 million, which includes the haul from local races nationwide, said Cliff Rucker, vice president of USPS sales.

It’s still not enough to save the postal service. But it’s enough to get the agency past an October cash crunch that the postal service had warned about.

“Our liquidity situation remains serious,” USPS spokesman David Partenheimer said. “We do expect election mail and the current holidaymailing season to help us get through this month’s low point in our cash flow.”

Related: Postal Service increasing prices

The USPS has been teetering on the brink of bankruptcy. A key reason was a 2006 law that required the postal service to make annual payments of about $5.5 billion for 10 years to pay for future retiree health benefits.

The other big issue has been the dramatic drop in regular mail that most consumers use because the rise of technology has enabled electronic bill pay and instant communications like email, skype and texting.

In the three months that ended June 30, the agency reported net losses of $5.2 billion.

Congress has been grappling with different bills to save the postal service, but no consensus has emerged. None are expected before next year. By spring, the postal service could again face the threat of insolvency.

To read more, visit: http://money.cnn.com/2012/10/12/news/economy/election-bailout-postal-service/index.html?iid=Popular

  • Norma Nicholson

    If the USPS is a private entity as they say, why are they not responsible for making their own way in the market place and required to be self-supporting as any other business should be. Bail outs are the public paying for bad management and I haven’t seen anybody come to my door to tell me that because I have overspent they are going to pay my bills. If you can’t operate within your budget, then you deserve to go bankrupt or out of business and face the consequences. Bad as it may be for the employees, that is the way things have gone since the beginning of time until 2008 when bailouts began and have proliferated in the USA ever since. The taxpayer can’t support all of the political cronie businesses the elite wants to to subsidize and the USPS has been on the public tit for decades. It is time for them to operate competitively and pay their own way. I have trouble supporting my own household and can’t afford to support all of the companies the government wants me to support, especially since the government has caused so many problems with the economy in the USA and the over 40% un/under-employment that actually exists in the USA. Instead of griping about those who are on some form of assistance, help create jobs and a stable economy with reduced taxes so people will have confidence in the economy and create jobs for those who are in need of assistance and quit giving a free ride to the criminal illegal influx that flood our border.

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