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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.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.
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I was struck by the shoddy, dishonest reporting in this story. I cannot address all of its failures.

It lacks the most significant recent numbers: that the nonprofit was required by Congress to pre-pay 75 years worth of estimated retiree health benefits- in a 10 year period.

It substitutes the non-fact that tax payments will play a role, in an unnecessary rescue.

It withholds that there are billions of dollars in overpayments already made to Treasury, from a previous attempt to hamstring the Service and dip into its cash flow.

For actual information, and answers to the questions the information suggests, there is the Democracy Now program of August 1, 2012
http://www.democracynow.org/2012/8/1/as_us_postal_service_faces_default

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