Tags: US | Postal | Service | Loss

U.S. Postal Service Loses $3.2 Billion, Will Skip Health Payment

Thursday, 10 May 2012 12:31 PM

The U.S. Postal Service said it lost $3.2 billion in the quarter ended March 31 and won’t have the cash to make a required payment for future retirees’ health benefits.

The loss widened from $2.2 billion a year earlier as mail volume continued to decline, the service said today in a statement. The service must by law pay $11.1 billion for future health benefits by the Sept. 30 end of its fiscal year.

“We are aggressively pursuing new revenue streams and reducing costs in areas within our control,” Postmaster General Patrick Donahoe said in the statement. “These actions are not enough to return the Postal Service to profitability.”

The 10th consecutive quarter of losses may spur the U.S. House to consider its version of legislation intended to overhaul the service and return it to profitability. The Senate has passed a bill that didn’t give the service many of the changes it requested, including relief from the retiree health benefit obligations.

The Postal Service has forecast a record $14.1 billion loss for this fiscal year. It wants to eliminate as many as 220,000 jobs and close mail-processing plants to cut costs. It said yesterday it can save $500 million annually by cutting hours of operation at as many as 13,000 small-town post offices.

That strategy was a reversal from a plan announced last year to close up to 12 percent of post offices to save $200 million annually. Senators including Scott Brown, a Massachusetts Republican, and Tom Carper, a Delaware Democrat, had asked the service to keep post offices open.

Carper, in a statement yesterday, said that while the rural post office plan is welcome, it doesn’t eliminate the need for Congress to amend the retiree health-benefit requirement and refund overpayments by the service to a U.S. government-employee retirement account.

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Thursday, 10 May 2012 12:31 PM
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