Understanding the U. S. Postal Service, Explained by the Federation of American Consumers
The Federation of American Consumers has received a lot of questions about the U. S. Postal Service like: Is USPS government run or private? Is it supported by postal rates or our taxes? Can it raise rates at will or must it obtain approval? Is it going broke? And, if it does go broke, what happens to my mail?
(Vocus/PRWEB) November 23, 2010
Vicki Rolens, Managing Director of the Federation of American Consumers (FACT), says that the association has received a number of queries concerning the United States Postal Services (USPS).
“People are understandably confused,” she says. “Is USPS government run or private? Is it supported by postal rates or our taxes? Can it raise rates at will or must it obtain approval? Is it going broke? And, if it does go broke, what happens to my mail?”
Rolens said the queries have prompted FACT to prepare a USPS report for its members.
“The USPS,” says Rolens, “is best described as a quasi-public agency. It does receive an annual appropriation from Congress, but it is run by a Board of Governors and is primarily supported not by taxes but by the money it is paid by its customers.”
The agency can borrow money from the U. S. Treasury, as much as $3 billion in any given year up to a maximum total debt of $15 billion.
“The USPS actually made a little money in 2004, 2005 and 2006,” says Rolens, “but it has had significant losses in the years since. It now faces a situation where it may not even have the cash required to make its FY2010 payment to its Retiree Health Benefits Fund. The agency is asking Congress to amend current law and thereby abolish required annual payments to this Fund.
“USPS is in a really tough spot, as may of its services are being offered at rates which are below their costs -- but federal law prohibits postal rates to go up at a rate higher than the Consumer Price Index.”
She says that the myriad problems facing USPS will undoubtedly impact the consumer -- if not now, then soon. Among some fixes being considered: closure of many post office branches, elimination of Saturday delivery, reduction in number of employees, the sale of more non-postal products and services -- and, of course, higher postage rates.
The overriding question, according to Rolens: “Is USPS capable of responding to its many challenges and continuing as a self-funding agency, or are any steps implemented now merely delaying an inevitable failure?”
This news bulletin has been issued by The Federation of American Consumers and Travelers (FACT), a consumer organization formed under the not-for-profit corporation laws of the District of Columbia in 1984.
FACT serves more than 1 million consumers nationwide. Additional information on FACT may be found in the Encyclopedia of Associations, and by visiting the association's Web site (http://www. usafact. org).
Informative, unbiased news bulletins are regularly disseminated by FACT to help its members remain current on matters which might seriously impact their lives. The association does not offer support to -- and does not receive support from -- any political party or movement. In addition to publishing consumer-related reports, the association provides more than 30 benefits for its members, ranging from medical insurance and dental discounts to prescription drug savings and scholarships. FACT’s administrative office is located at 318 Hillsboro Avenue, Edwardsville, IL 62025.
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