Postal Service loses less, but still in trouble
WASHINGTON (CNNMoney) — 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.