11/18/12

As the House Looks away, the Postal Service Nears Its Own "Fiscal Cliff"

Last quarter, as the U.S. House of Representatives looked away, the U.S. Postal Service, forced to default on billions in payments to avert bankruptcy this year, reported a record $15.9 billion loss -- with bigger deficits projected in 2013.

Although a private agency, the USPS is subject to congressional control.

Its losses for the last fiscal year more than tripled the previous year's $5.1 billion loss.  At its borrowing limit, it is operating with cash on hand.

About $11.1 billion of its 2012 losses came from congressionally-mandated payments for future retiree health benefits. Earlier this year, it defaulted on two of the pre-payments for the first time ever. 

Subtracting those pre-payments, the USPS had a net operating loss of $2.4 billion, lower than last year.

While it has been able to cut costs significantly by squeezing postal workers harder, congressional inaction on a postal overhaul bill to reduce its $5 billion annual payment for future health benefits has left it stranded.

The Postmaster General has called on Congress to pass comprehensive legislation, before they adjourn this year, to avoid the USPS going over its  own "fiscal cliff" on January 1, 2013, saying the agency, looking at major defaults, cannot sustain that kind of losses indefinitely.

The Senate passed a bill in April to provide financial relief by reducing the annual health payments and refunding billions of dollars in overpayments. But The House remains bogged down in its own bill, which would enact huge budget and service cuts.

The House leadership may not even take up that bill before the lame duck session ends.

The article from Yahoo News.

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