Thursday, February 14, 2013

Postal Service Debt May Hit $45 Billion Unless US Changes Law

The U.S. Postal Service, which lost $1.3 billion in its first quarter, said its debt could reach $45 billion by around 2017 if Congress doesn?t pass legislation allowing it to change its business model.

The post office, at a Senate Homeland Security and Governmental Affairs Committee hearing Wednesday, will ask for permission to run its own health plan for employees and retirees.

Postmaster General Patrick Donahoe, in testimony prepared for the hearing, said the service could save as much as $7 billion a year through 2016 by taking its health coverage out of the U.S. government plan.

Donahoe last week said the service plans to end Saturday mail delivery in August even though an appropriations law first enacted in 1981 requires it to deliver mail six days a week.

The service has reached the $15 billion limit on what it?s allowed to borrow from the U.S. Treasury and defaulted last year on two payments due to the Treasury for future retiree health benefit costs.

? Copyright 2013 Bloomberg News. All rights reserved.

Source: http://www.moneynews.com/Economy/Postal-Service-Debt-Billion-law/2013/02/13/id/490209

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