U.S. Postal Service reports $5.2B loss
WASHINGTON - The nearly bankrupt U.S. Postal Service reported losses yesterday of $57 million a day in the last quarter and warned it would miss another payment due the U.S. Treasury, just one week after its first-ever default on a payment for future retiree health benefits.
From April to June, losses totaled $5.2 billion, up $2.1 billion from the same period last year.
The Postal Service said it is being hurt significantly by mounting expenses for future retiree health benefits. Those expenses, mandated by Congress in 2006, made up $3.1 billion of the service's quarterly loss, while workers' compensation tacked on another $1.1 billion in expenses. The agency's operating loss was $1 billion, mostly through declines in first-class mail.
"We have simply reached the point that we must conserve cash," Thurgood Marshall Jr., chairman of the Postal Service's board of governors, said in explaining the payment defaults.
He said the mail agency may have to delay other payments.
The Postal Service for months has been urging Congress to pass legislation to allow it to drop Saturday mail delivery and reduce the annual health payment of more than $5 billion. The service defaulted on that payment last week when the House failed to act before heading home for a five-week break.
The mail agency says it will miss the second $5.6 billion payment due on Sept. 30, also for future retiree benefits, as cash runs close to zero.
At a news briefing, Postmaster General Patrick Donahoe made clear that day-to-day mail delivery will not be disrupted in any way despite the cash crunch. But Donahoe expressed frustration with the repeated delays by Congress, which he said is contributing to a lot of "negative talk on finances" that could undermine confidence in the mail agency and its long-term growth.
"Congress needs to act responsibly and move on this legislation," he said. "This is no way to run any kind of business."
The Senate passed a postal bill in April that would have provided financial relief in part by reducing the annual health payments and providing an $11 billion cash infusion, basically a refund of overpayments the Postal Service made to a federal pension fund. The House, however, remains stalled over a separate bill that would allow for aggressive cuts, including an immediate end to Saturday delivery. Rural lawmakers in particular worry about the impact of closures in their communities.