More USPS red ink to lead to bloodletting

Monday - 11/15/2010, 7:05am EST

The Postal Service has promised one approach to shrinking its continuing losses. Keep cutting jobs.

Postal's 2011 financial plan calls for elimination of 50 million work hours, or about 25,000 jobs. The agency has already cut 105,000 full time jobs since 2009. Even so, next year's plan, approved by the Postal Board of Governors, calls for losses of $6.4 billion.

Last week, the Postal Service reported 2010 losses of $8.4 billion.

GovExec reports, Chief Financial Officer Joseph Corbett is predicting growth in mail volume next year. He says the Postal Service will have to handle it with fewer people.

The announcement of impending job cuts comes as the Postal Service is in contract negotiations with two of its unions, with two more scheduled to be negotiated next year.

A request from the agency for a 2-cent increase in postage rates to take effect next year was recently turned down by the independent Postal Rate Commission. The post office has appealed that decision in federal court.

According to the Postal Service, independent auditor Ernst & Young is expected to issue an unqualified audit opinion that will emphasize that questions remain about the ability of the Postal Service to generate sufficient liquidity to make all of its future payments, including the $5.5 billion RHB pre-funding payment due on the last day of fiscal year 2011.

"If corrective action is not taken quickly, the Postal Service will likely run out of cash and borrowing authority by this time next year, placing its ability to continue operations in serious jeopardy," said Sen. Tom Carper, D-Del., who urged quick congressional action.

Rep. Darrell Issa, R-Calif., who is expected to head the House committee overseeing postal operations, said the loss "only underscores the urgent need for the Postal Service to trim its operating costs to match revenues."

Fredric V. Rolando, president of the National Association of Letter Carriers, said the loss "comes as no surprise."

The Associated Press contributed to this report.

Online: Postal Service Ends 2010 with $8.5 Billion Loss (USPS press release)

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