Postmaster General: Post Office Will Shut Down By Winter if Congress Doesn't Bail it Out
Posted on September 5, 2011The New York Times reports that the U.S. Post Office is in dire financial straits again. This time, it's so bad that if Congress doesn't bail the post office out, it will shut down by winter time.
The agency does not have enough cash to make a $5.5 billion payment due this month for retirees' future health care. Postmaster general Patrick R. Donahoe told the Times, "Our situation is extremely serious. If Congress doesn't act, we will default." Donohoe wants to cut costs by eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers. That would constitute a 20% reduction in staff.
80% of the post office's costs are labor-related. The workers have "no layoffs" clauses in their contracts. There are huge pension expenses, as well. Mail is down by 22% from five years ago and is expected to continue to decrease because of the Internet.