Source: Ed O’Keefe / The Washington Post
The U.S. Postal Service is on the verge of defaulting on billions of dollars in payments due to the U.S. Treasury, but Congress isn’t any closer to resolving the delivery service’s financial woes.
On Wednesday the first of two legally required payments come due, a $5.5 billion obligation to fund future postal retiree health benefits. Another $5.6 billion is due at the end of September. But with mail volume and revenues plummeting — leading to roughly $25 million in losses each day — USPS has warned it will be unable to make the payments and may need to delay other obligations, including a $1.5 billion payment to the Labor Department for workers compensation.
The Postal Service doesn’t use taxpayer money to fund operations, but is regulated by Congress, which for years has passed short-term resolutions to prop up its sagging finances.
In an attempt to pass long-term structural reforms, the Senate passed a measure in April that would provide $11 billion to avoid default and pay for other costs. But the original Senate proposal was weakened by dozens of amendments delaying the proposed closure of post offices and mail processing facilities, especially in regions serving far-flung rural communities.
U.S. Postmaster General Patrick Donahoe has warned that the Postal Service could go broke in October. (Andrew Harrer – BLOOMBERG)
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