Postmaster General Patrick R. Donahoe has warned he can’t afford to pay about $5.5 billion in mandatory retirement payments.
(Andrew Harrer - BLOOMBERG)
The House approved a short-term spending measure Tuesday that will keep the federal government operating through Nov. 18. While the bill sets spending levels for the next six-and-a-half weeks, it also gives the U.S. Postal Service time to come up with the money necessary to make annual payments required to prefund the future retirements of its workers.
Those payments usually total about $5.5 billion, a hefty annual sum that USPS says is primarily responsible for causing its recent financial malaise. Attempts to secure a 90-day extension for the payments failed, and some congressional aides have cautioned that lawmakers might not give the Postal Service another break if they need to pass another short-term measure.
So what happens on Nov. 18 if the Postal Service can’t pay? Well, legally, nothing. There are no penalties if USPS doesn’t pay. The hope among postal executives is that Congress can agree on legislation that would revamp the Postal Service’s finances and give it more flexibility to set delivery schedules and close locations, if necessary.
The House and Senate are considering various proposals, but none of the bills have advanced yet, and with current timetables, it’s unlikely a substantive bill will be passed by Nov. 18. Stay tuned.
Follow Ed O’Keefe on Twitter: @edatpost
Further reading:
Postal Service launches new TV ad campaign
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