The U.S. Postal Service is in danger of bankruptcy this spring if Congress does not make urgent reforms to the agency before then, CNNMoney reported.
The call for action comes as Congress has a host of broader fiscal issues to tackle at the same time, and it’s unclear where the agency is positioned within that larger agenda.
Postmaster General Patrick Donahoe warned that Congress’ “lack of action is disappointing” and said the agency in the meantime is pursuing a “range of accelerated cost-cutting and revenue-generating measures.”
Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.
Bankruptcy would mean fresh cutbacks in mail delivery and postal employee job cuts.
A recent financial report warned the Postal Service will have only approximately $1 billion in cash during one period in March 2013 – a level that would keep the agency running for only four days, CNNMoney said.
During 2012, the Postal Service twice defaulted on payments totaling $11 billion, and it exhausted a $15 billion Treasury line of credit.
What helped keep the agency running in the past few months was increased mail volume from the election and the holidays — both seasonal boosts that are now over.
Some House Republicans and Senate Democrats have been eying the agency’s status as an "independent establishment" of the executive branch, but have not agreed on an approach that could help, CNNMoney reported.
“While our approaches have differed in the past, we made significant progress in narrowing our differences in recent months,” Rep. Darrell Issa, R-Calif., and Sen. Tom Carper, D-Del., said in a joint statement.
“Our commitment to restoring this American institution to long-term solvency is unwavering,” the statement said.
As recently as 2005, the Postal Service had no debt. One reason for the shortfall stems from a 2006 government mandate that the agency commence pre-funding healthcare benefits for future employees, CNNMoney reported.
The Federal Times reported the Postal Service recently offered $15,000 to many of its union employees in an effort to shrink its career work force by 150,000 employees over the next three years.
Among the ways the agency has contemplated generating more revenue are: awarding “naming rights” to post offices, adding GPS tracking to mail for a fee, charging for mail forwarding and monetizing hybrids of email and print document delivery, the Federal Times said.
Editor's Note: How You Lost $85,000 During the Last Decade. See the Numbers.
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