On July 19, 2012, Jennifer Levitz writes in The Wall Street Journal writes that while lawmakers continue to fight over how to fix the ailing U.S. Postal Service, the agency’s money problems are only growing worse.
The Postal Service repeated on Wednesday that without congressional action, it will default—a first in its long history, a spokesman said—on a legally required annual $5.5 billion payment, due Aug. 1, into a health-benefits fund for future retirees. Action in Congress isn’t likely, as the House prepares to leave for its August recess.
The agency says it will default on its 2012 retiree health payment as well—also roughly $5.5 billion, due Sept. 30—if there is no legislative action by then.
Most everyone agrees the Postal Service needs an overhaul. It had a loss of $3.2 billion in the second quarter of this fiscal year; it is to report third-quarter results on Aug. 9. The agency blames factors including declining mail volumes and the unusual 2006 mandate by Congress that it annually set aside billions for future retirees. But while the Senate has passed legislation to overhaul the agency, the House says it doesn’t expect to take up its own proposal until after August.
The two sides remain far apart. Senators voted in April, on a bipartisan basis, for legislation that largely shores up the agency’s finances by returning an estimated $10.9 billion overpayment made into the federal employee pension system. The legislation limits the agency’s ability to close postal branches and stop Saturday delivery.
Republican House leaders support legislation they say would require the agency to operate more like a business, in part by setting up a panel to reduce the network of post offices. Some rural-district House members, from both parties, have been worried about closures in their areas.
