Postal Service loses less, but still in trouble

Friday, February 8, 2013 - 11:00am

If it weren't for Congress, the U.S. Postal Service might not be doing so badly.

In the final three months of last year, the agency lost $1.3 billion -- considerably less than the $3.3 billion lost in the same 2011 period.

The service was hurt as the volume of first-class mail, which most consumers use to pay bills and stay in touch, decreased by 4.5.%, said USPS chief financial officer Joseph Corbett. But it got help as shipping and package volume increased 4% compared to the prior year.

Still, the service is still in trouble. The key culprit remains a 2006 congressional mandate, under which it has to pre-fund healthcare benefits for future retirees. The USPS has been borrowing billions of dollars from taxpayers to make up for the shortfalls.

The situation turned particularly dire last year -- the agency twice defaulted on payments totaling $11 billion, and it exhausted a $15 billion line of credit from the U.S. Treasury.

The Postal Service is, by law, an "independent establishment" of the executive branch. The agency doesn't normally use tax dollars for operations, but it has exhausted a $15 billion loan from Treasury.

The Postal Service on Wednesday unveiled a plan to end Saturday delivery of mail, a move which is expected to save $2 billion a year, a drop in the bucket compared to the $16 billion loss the organization reported for 2012.

It remains unclear whether the Postal Service has the power to end Saturday service on its own without Congress' help.

Comments News Comments

If the postal system is in so much trouble and loosing money lay off some of the people that the slow usage has caused , if letter carrier use has been cut in half lay off half of the carriers and sorters, they have raised the cost of a 1st class stamp so much it is almost cheaper to hand deliver your mail to local businesses than mail them now days if you mial 5 letters to locals its about the same cost as driving and droping them off, even with the cost of gas, at least gas goes up an down

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