The United States Postal Service has Finally Run Out of Money
USPS confirmed that it won’t make a required $5.5 billion payment due tomorrow to the U.S. Treasury for future retirees’ health care, unless Congress intervenes with a bailout.
The postal service has said for months it couldn’t afford the payment, which was initially due last September reported Bloomberg.com Tuesday.
USPS hires more employees than any U.S. –based publicly traded company other than Wal-Mart Stores Inc.
USPS wants to eliminate as many as 220,000 jobs and close mail-processing plants to reduce costs, reported Bloomberg.
The service abandoned a plan to shut as many as 12 percent of its post offices after opposition in Congress and instead said it would cut operating hours at 13,000 locations to save $500 million annually.
USPS released the following statement on its website Monday:
The U.S. Postal Service will not make mandated prefunding retiree health benefit payments to the Treasury of $5.5 billion due Aug. 1, 2012 or the $5.6 billion payment due Sept. 30, absent legislation enacted by Congress. This action will have no material effect on the operations of the Postal Service. We will fully fund our operations, including our obligation to provide universal postal services to the American people. We will continue to deliver the mail, pay our employees and suppliers and meet our other financial obligations. Postal Service retirees and employees will also continue to receive their health benefits. Our customers can be confident in the continued regular operations of the Postal Service.
The Postal Service continues to implement its strategic plan. However, comprehensive postal legislation is needed to return the Postal Service to long-term financial stability. We remain hopeful that such legislation can be enacted during the current Congress.
The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.