Talk in recent weeks of post office closings and the elimination of Saturday mail delivery has shifted to a more dire prospect: The entire U.S. Postal Service could go out of business within a year.
Postmaster General Patrick Donahoe told a Senate hearing Tuesday that the postal service is running out of money and could go into default as soon as next month unless Congress acts.
"Without legislative change this year, the Postal Service faces default," Donahoe told the Senate Committee on Homeland Security and Governmental Affairs.
If the Postal Service is forced to make its required $5.5 billion annual payment to the federal health care benefit plan, it will exhaust its $15 billion line of credit from the U.S. Treasury and trigger a default. John Berry, the director of the Office of Personnel Management, told the panel that the White House would ask Congress to grant the Postal Service a 90-day extension on the health care payment.
But that's only the first step. Donahoe said the Postal Service, which is on track to lose $10 billion this year, must take additional, drastic measures to avoid shutting down and is seeking Congress' blessing to cut back delivery, close thousands of mostly rural post offices, consolidate processing centers and eliminate at least 120,000 jobs.
"Short-term, stopgap measures will not help," Donahoe said. "These are aggressive steps, and they are necessary."
A shutdown of the Postal Service would deal a staggering blow to the economy. With more than 500,000 employees, it's the second-largest employer in the country behind Wal-Mart. It supports millions of other jobs in related industries, such as newspaper and magazine publishers, and paper and printing companies, businesses that would be crippled without it.
"That is the last thing our struggling economy needs and the last thing our country needs," said Sen. Joe Lieberman, a Connecticut ...