Losses will only accelerate in the coming year, Postmaster General Patrick Donahoe warned, citing faster-than-expected declines in first-class mail. He implored Congress to take swift, wide-ranging action to stabilize the ailing agency's finances as it nears a legal deadline Friday to pay $5.5 billion into the U.S. Treasury for future retiree health benefits.
Congress is expected to grant a reprieve, but that will only delay the day of reckoning for an agency struggling for relevance in an electronic age. Based on current losses, the Postal Service says it will run out of money — or come dangerously close — next September, forcing it to halt service.
"We are at a point where we require urgent action," Donahoe said.
Postal officials called the financial situation "dire."
They say the Postal Service will not be able to make the $5.5 billion payment due this Friday due to low cash flow. Postmaster General Patrick Donahoe has warned of a postal shutdown next year unless there is congressional action to address the agency's long-term money problems.
The loss of $5.1 billion was less than a previous estimate of $10 billion, but only because the $5.5 billion payment — originally due Sept. 30 — was deferred until Nov. 18 with the approval of Congress.
In 2010, losses totaled $8.5 billion.
Recall that in September of this year, The Blaze reported on the financial crises facing the USPS:
Currently, labor costs represent 80 percent of the agency's expenses (as opposed to UPS’ 53 percent and Fedex’s 32 percent) and costs continue to rise and grow with the help of such incredibly, unthinkably harmful provisions as the “no-layoff” clause in union contracts.
Moreover, it has been discovered recently that the USPS has overpaid an estimated $60 billion into its employee pension plans.
You read that correctly. $60 billion. Extremely generous benefits, employees that cannot be fired, and $60 billion overpaid in pensions.
At the time that article was written, these were the issues killing the agency. Based on the fact that the USPS will default on Friday's payment, it sounds as if things haven't improved.
The Associated Press contributed to this story.