USPS Facing Default, Looks To Congress for Assistance

September 6, 2011 8:16 a.m.

Postmaster General Patrick Donahoe is scheduled to appear Tuesday afternoon before the Senate Homeland Security and Governmental Affairs committee to discuss the quasi-government agency’s dire financial situation. The USPS lost $8 billion last year and is expected to lose at least that much this year as well. The post office is being squeezed on both revenue and costs; losing business due to the Internet revolution and bound by a law that prevents them from raising postage fees faster than inflation.

Officials warn that they may not be able to make this month’s $5.5 billion payment to cover future employee health costs without increasing their borrowing limit, which requires Congress to take action. In an interview with The New York Times, Donahoe called the situation “extremely serious.” The agency is considering a variety of cost-cutting measures, including ceasing Saturday deliveries, closing up to 3,700 postal offices and eliminating 120,000 workers.

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