USPS teeters on the brink of default
A U.S. Postal Service letter carrier prepares to place letters in a mailbox.
Kai Ryssdal: You know all those stories you've heard the past couple of years about how the Post Office is broke, billions and billions in deficits?
Well, it's about time to pay the piper. And soon. Unless Congress does something by Wednesday, the postal service is going miss a $5.5 billion payment it owes the Treasury Department. So is the mail still gonna show up on Thursday?
Marketplace's Nancy Marshall-Genzer has more.
Nancy Marshall-Genzer: Turns out, neither rain, nor snow, nor now, default will keep your mail from being delivered. The money due Wednesday is a regular payment the Postal Service makes to Treasury to cover the future health care expenses of retirees and their dependants.
Jim Sauber is chief of staff of the National Association of Letter Carriers.
Jim Sauber: Although it’s kind of a scary word -- default -- it’s not like a default that would be in the corporate sector on a bond.
So that package you ordered from Amazon will arrive on time. Still, Sauber says the pension payments, like the one due Wednesday, are hobbling the Postal Service. And it shouldn’t have to stockpile so much money.
A. Lee Fritschler is a former chairman of the Postal Regulatory Commission. He says, even without the payments, in a year or so the Postal Service won’t be able to cover its expenses -- and that will affect consumers. Postal rates would go up and advertisers might abandon their weekly circulars.
A. Lee Fritschler: It would be up to catalogue mailers to go more and more online. Coupon mailers to go more and more online or use newspapers.
Yeah, so the Postal Service might deliver less junk mail. I know you’re sorry to hear that. But here’s the biggest long-term impact of the Postal money crunch. If Congress decides not to close any post offices and still wants Saturday delivery, somebody’s gotta pay.
John Callan is a mailing industry consultant.
John Callan: The government is going to have to subsidize that. Without question.
And where do government subsidies come from? That’s right. You, the taxpayer.
In Washington, I’m Nancy Marshall-Genzer for Marketplace.