Postal Service Braces for Default
The United States Postal Service will soon default on billions of dollars in payments due to the U.S. Treasury. The situation is adding to the uncertainty about the mail agency's solvency.
The Postal Service has already taken a number of steps to reduce budget outlays, including decisions to shift mail processing out of several locations in Kentucky. The number of first class letters has been declining, and Postal Service officials say they will not make two legally-required payments for future retiree benefits. The first of those payments is due August 1st, while the second will be due in September. Each of those payments is for more than $5.5. billion.
Officials with the Postal Service say the defaults won't lead to any short-term catastrophes, and employees will continue to get paid. However, postal analysts are pointing to longer-term harm as the mail agency finds it increasingly difficult to address its budget problems.
The U.S. Postal Service estimates that it is now losing $25 million per day.