U.S. Postal Service facing default on retiree payments
Unless Congress steps in Wednesday, the U.S. Postal Service will default on a federal bill covering payments for retirees, and possibly not for the last time, according to CNN.
In a statement, the service confirmed it would not be able to make the $5.5 billion payment to prepay health benefits for retirees, but said it would not affect current operations. However, it’s also unlikely the USPS will be able to foot a $5.6 payment due Sept. 30. According to The Washington Post, the payments are part of a 10-year plan to set aside money for retirees authorized by Congress six years ago.
Though it does not use taxpayer money to fund its operations, the USPS is regulated by Congress. In April, the Senate passed a plan relaxing the payments and sparing the service from paying another $11 billion in pensions.
But a House of Representatives bill calling for thousands of post offices to be shuttered, as well as the abolishing of Saturday mail service and the establishment of an outside board to control the USPS’ finances, among other measures, has not reached the floor due to opposition from lawmakers from rural districts, which are more likely to be affected by delivery changes.
The service has a plan to cut $22.5 billion within the next four years by offering incentive-laced retirement packages to thousands of employees, consolidating offices and cutting service hours at several locations.
Meanwhile, postal workers oppose any overhauls to the service, saying lawmakers should allow it to stop paying into the retiree fund, thus freeing up money for jobs and deliveries.
“The pending ‘default’ is not primarily the result of a bad market or even bad operations, but of bad legislating by Congress,” National Association of Letter Carriers president Fredric Rolando said in a statement.