Is the postal service going broke?
A U.S. Postal Service mail carrier delivers mail to homes in Miami, Fla.
TEXT OF INTERVIEW
BILL RADKE: Today's the end of the government's fiscal year
and there's no new budget yet from Congress. Late yesterday, lawmakers voted to extend government spending until December. One issue they're looking at out of many is funding for the postal service, which is waiting to hear today on its request to raise the price of a first-class stamp from 44 to 46 cents to head off a growing budget crisis. Marketplace's John Dimsdale is with us live from Washington, D.C. Hi John.
JOHN DIMSDALE: Good morning, Bill.
RADKE: Is the post office going broke?
DIMSDALE: Well, it ran a deficit of nearly $4 billion last year and is on track to lose another $7 billion this year. And all that's despite a 20 percent decline in volume of mail thanks to the Internet and private deliveries. And also despite cutting 36,000 jobs over the past couple years.
RADKE: So they're cutting jobs, John, why does the postal service need this rate increase way above inflation?
DIMSDALE: That depends who you ask. People in the postal service say they are stuck with too many post offices -- usually named for politicians, by the way -- and forced to deliver lots of junk mail, even on Saturdays, for very little money. But lawmakers and people who use the service say the post office refuses to make tough decisions to lay off unneeded workers and stop paying lavish salaries and pension benefits.
But of more immediate concern is a warning from the post office that it's going to run out of cash sometime next month. Congress punted on that question. The post office wants permission to skip a required payment to its employee pension fund and it wants to stop Saturday deliveries. Those issues will have to come before Congress after the election.
RADKE: Marketplace's John Dimsdale, thanks.
DIMSDALE: Thanks Bill.