The cash-strapped U.S. Postal Service delivered more bad news Friday, announcing it lost $8.5 billion in the fiscal year that ended in September. Without congressional action to change its obligations, officials said, the Postal Service likely will go broke at the end of fiscal 2011.
Letter carriers delivered 6 billion fewer pieces of mail in fiscal 2010, with a significant drop in first-class mail deliveries, officials said. Financial losses also came from about $5.4 billion in obligations to pre-fund future retiree health benefits and about $2.5 billion paid to the federal government's workers' compensation insurance fund.
Outgoing Postmaster General John E. Potter said last month that he anticipated at least $6 billion in annual losses, but cautioned the number would likely go higher once the mail service tallied its workers' compensation contributions. All federal agencies and the Postal Service, a quasi-federal outfit, have workers' compensation obligations to help fund four major disability compensation programs.
The Postal Service also announced Friday that it plans to deplete its $15 billion line of credit with the U.S. Treasury by borrowing the remaining $3.5 billion available to it. Though the Postal Service does not use taxpayer funding, it has tapped the credit line since the early 1990s. Depleting it means the Postal Service likely will go broke at the end of fiscal 2011 unless Congress takes action, officials said.
-Ed O'Keefe, WashingtonPost.com