The Post Office May Shut Down This Winter Unless Congress Authorizes A Bailout

Post office Bankrupt

“Neither rain, nor snow, nor sleet, nor hail shall keep the postmen from their appointed rounds.” But unless Congress steps in, bankruptcy will.

The New York Times reports that unless the House and Senate take drastic action in the next few months, one of the nation’s oldest institutions — which employs 574,000 Americans — may be forced to shut down.

A combination of labour costs and a declining number of packages and letters has the United States Postal Service running short on cash. The independent government agency will be unable to make a $5.5 billion payment to its employee healthcare plan by the Sept. 30 due date.

“Our situation is extremely serious,” the postmaster general, Patrick R. Donahoe, told the Times. “If Congress doesn’t act, we will default.”

To avoid insolvency, Donahoe says needs Congress to approve the elimination of Saturday delivery and the undoing of the agency’s contract with its union to allow it to lay off up to 120,000 workers. The Post Office is also planning to close 3,700 locations.

Ending Saturday delivery would only cut about two per cent of the agency’s budget — and is vigorously opposed by many lawmakers from states with large rural populations. They would rather the agency recover the $60 billion it has overpaid into its employee pension plans and pursue less drastic restructuring.

The Senate Homeland Security and Governmental Affairs Committee will hold a hearing on the Post Office’s precarious financial position, though no politically palatable solution is in sight.

Read the full report at The New York Times