Post Office Nears First Default in Its History

The Wall Street Journal ^ | July 18, 2012 | JENNIFER LEVITZ

[Free ThinkerNY]

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 said a default on the payment, for 2011, wouldn't directly affect service or its ability to pay employees and suppliers. But "these ongoing liquidity issues unnecessarily undermine confidence in the viability of the Postal Service among our customers," said spokesman David Partenheimer.

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.

[Thebaddog]

This is really about fiscal responsibility. And I think the USPS is turning it around. My first choice of service is USPS. I hope they survive in a responsible fashion.

[FlingWingFlyer]

I imagine Barry thinks that if he lets the Post Office, Social Security and Medicare go under, da gubmit will have the money for his “signature” ObamaCare behavioral health and population control programs. Of course, it will be somebody else’s problem to try to keep ObamaCare afloat. Barry will be cooling his heels and eating ice cream on a beach in Hawaii by the time ObammyCare really kicks in.

[presently no screen name]

I bought stamps recently and didn’r realize they went up to
$0.56. Gotta pay for all those benefits they get just for working along with their salary!

[goodnesswins]

HAHAHA....did YOU get taken....regular mail stamps are only $0.45...

[Osage Orange]

Hey...I’ll sell you all you can handle for 0.55 cents a stamp!!

[Pining_4_TX]

P-R-I-V-A-T-I-Z-E.... Market forces can’t be denied forever. The only way to bring reality to the business of mail delivery is to have competition.

[RetiredTexasVet]

“and the unusual 2006 mandate by Congress that it annually set aside billions for future retirees”

What’s so unusual about that requirement....DUH. USPS could easily get back on a competitive footing by eliminating Saturday deliveries (unless requested and paid for by businesses desiring it), eliminating the thousands of full time one room shack post offices and move the operations to businesses and mail box pickup points, and use commercial points like Shipping Point, etc. for stamp selling, posting packages, etc. I favor using the USPS and have forever, but they need to get off their butts and get with it.

[Darth Reardon]

According to something I read recently (zerohedge?), what is unusual is that Congress required them to set aside money, over a ten year period, for like the next 75 years (as in set aside money for people who haven’t even been hired yet, not just current employees).

IOW, they had a surplus and Congress wanted to spend it.

Again, this is just something I read, but if I try hard enough I can see Congress doing something like this.

[presently no screen name]

Scam artist! LOL!

When I typed .56 I thought I should check the receipt first but was too lazy to get up to check the receipt again. I didn’t notice it when I bought them but a week or so I came across the receipt and noticed. That’s some jump in price.

Gee, can’t anyone be lazy around here and no one notice. :)