May 22, 2013
Postal Service Sends Distress Signal
Posted on Jan 15, 2013
After losing $41 billion over the last five years, the inspector general of the USPS has warned that America’s postal service will go out of business this year unless Congress acts to save it.
David Williams said the service is in “very serious trouble” after years of heavy debt and falling revenue.
Decisions made during the Bush administration required the service to pre-fund its workers’ retirement and health care benefits. It is the only federal agency that is required to do so, at a cost of roughly $5.5 billion a year. The USPS has paid in $330 billion for benefits, but the Office of Personnel Management recently told Williams that his agency would need $394 billion to meet the legal requirement.
Ruth Goldway, chairman of the U.S. Postal Regulatory Commission, says “The main reason for the dire financial state of the USPS is the debt it took on to meet its pension payments,” The Guardian reports. “They wouldn’t be in the situation they’re in without having borrowed all this money,” she said.
—Posted by Alexander Reed Kelly.
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