The U.S. Postal Service is nearing default, and may lose up to $10 billion this fiscal year, which ends Sept. 30.
The USPS is currently trying to downsize by reducing its workforce by one-fifth, closing nearly 4,000 branches across the United States and taking over employee benefits now run through the government. If USPS reduces its workforce by that amount, 220,000 jobs are expected to be cut by 2015.
The postal workers union, with about 250,000 members, signed a contract with the Postal Service this year that extends through 2015 and prohibits firing most employees.
On Tuesday, Postmaster General Patrick Donahoe appeared before Congress to talk about current issues and to ask for help from Congress so that USPS can avoid default and perhaps even a shutdown.
“We are at a critical juncture,” Donahoe, who is also the service’s chief executive officer, wrote in his testimony. “Action from Congress is sorely needed by the close of this fiscal year.”
According to the International Business Times, here is what is currently wrong with the U.S. Postal Service:
– Faster-than-expected sale declines due to evaporation of First Class mail.
– Price increase limitations.
– Too many costly retail units.
– A federal law forcing the USPS to pre-fund its retiree health benefits.
– Bureaucratic struggle.
If Congress does not pass a law to help address the US Postal Service’s finances, the service may run out of money to pay employees and suppliers as soon as August 2012, Chief Financial Officer Joseph Corbett said in an interview last month.