USPS to Default on $5.5 Billion Payment; Reform Isn’t on the Horizon
For the first time, the financially troubled U.S. Postal Service is poised to default on a required $5.5 billion payment for future retiree health benefits. The payment is due Aug. 1.
The default won’t change how the mail is delivered to the public. But it draws attention to the dire need for financial reform of the beleaguered agency.
The only entity that can approve major financial changes is Congress. The Senate passed legislation in April. But the House hasn’t considered the topic yet, and likely won’t do so before its summer recess, which starts on Aug. 4.
“We want to pay our bills,” says David Rupert with the USPS in Denver. “We don’t want a bailout, we don’t want a handout, we’re simply looking for a way to make our way in this complicated economic world. But we have a plan. We just need a little help.”
The required payment to the U.S. Treasury comes from a 2006 law passed by Congress that mandates the USPS to pre-fund future retiree health care benefits for the next 75 years. The law was passed when the agency was making a profit; it seemed like sound policy at the time. But the recession and rise of electronic mail has backed the U.S. Postal Service into a corner.
In addition to a change to the USPS pre-funding of retiree benefits, the agency is calling for 5-day mail delivery, reduced hours at more than 3,000 post offices with lower volume, and a closure to some mail distribution centers across the country.
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