Postal Service Set to Default on $5.5 Billion Payment
The Washington Post reports the U.S. Postal Service will lose $14.1 billion this year and will default for the first time on Wednesday. The Postal Service will not be able to make a $5.5 billion payment to the U.S. Treasury that is Congressionally mandated.
Officials from the Postal Service said the default would not affect mail delivery or the paychecks of current employees but, as the Post notes, the Postal Service has another $5 billion bill it must meet in September and will likely not be able its obligations then as well.
Congress has not been able to reach an agreement on a bill addressing the issue. Like with military base closings, politics cannot be avoided when dealing with the many interests impacted by post office closings. This is one of the main reasons Congress is moving so slowly to address issues dealing with the Postal Service and the reorganization it will have to undergo.
In addition, unions -- even as the Postal Service is going deeper into the red -- refuse to give up any benefits.
Conservatives do not want to see another taxpayer funded bailout of the Postal Service and, according to the Post, “union-friendly Democrats hesitate to require the agency to squeeze its labor contracts” while the postal unions also oppose their members having to give up some benefits.
According to the Post, the House bill “would allow the agency to access the pension overpayment, as well as to close thousands of facilities, renegotiate labor contracts, eliminate Saturday service and establish a financial control board to overhaul the system’s finances” while the Senate bill focuses on delaying post office closures and cutting Saturday service.