Post Office Set To Default on $5 Billion Dollar Retirement Payment
The U.S. Postal service may be delivering this package a little late. August 1st the Postal Service may default on a $5 billion dollar payment that they owe their Union’s retirement fund.
Congress has the ability to stop the Postal Service from its first ever default, but without Congressional action the payment due to the retiree health fund payment will not be met, according to the New York Times. Congress is unlikely to intercede as they are getting ready to leave Washington for recess. The Postal Service says it will figure it out.
The Postal Service has been bleeding money for years. Republican critics argue that the Postal Service is actually well managed and the books look good, except that Democrats forced a payment plan on the Service that no other agency has to deal with. The Postal Service is required to pay the retiree years in advance of the funds being due.
The Postal Service abandoned its plans to shutter more than 3,000 rural post offices throughout the country in order to save money. Instead they limited the amount of time those offices stay open some as little as 30 minutes a day. They will also be closing more than 250 mail processing centers.
The Postal Service has seen revenues decline significantly do to e-mail and other forms of electronic communication.
The House of Representatives is scheduled to vote on a bill this fall to alleviate the monetary problems at the struggling agency but the fear is that before the savings kick in it will cost $5 billion dollars.