According to Postmaster General Patrick R. Donahoe, unless something drastic changes, the United States post office will run out of money by October. Not to worry, he has some ideas.
Donahoe said that as of Sept. 30 his agency will owe the federal government a payment of $5.5 billion to fund medical costs, in advance, for future retirees, and in November it will need to make a $1.3 billion payment for worker's compensation.
"The Postal Service will not have the cash available to make both of these payments. We need legislation this year to address that fact," he said.
If it does come down to crunch time, said Donahoe: "We will deliver the mail." Employees will be paid, as will suppliers, he said. "The thing we will not do is pay the federal government."
Without some important changes to the law the post office "cannot survive as a self-financing entity," Donahoe said.
While the post office has been battered by the recession and the movement of mail to the Internet, it has also cut costs sharply by reducing its workforce by 240,000 people in recent years. Last year it cut costs by $3 billion and expects to reduce spending by another $2 billion this year, Donahoe said.