HUFFINGTON POST: …The agency’s failure to make good on a $5.5 billion payment toward retiree health benefits comes as no surprise, and the default won’t have any immediate effects on the postal service’s day-to-day operations, the agency assured in a statement. But the missed payment — reportedly the first of its kind in the post office’s history — will no doubt ramp up the debate over how best to address the agency’s growing red ink.
Under the law passed in 2006, the postal service must pay at least $5.5 billion a year into a retiree health benefit fund, a steep “prefunding” requirement that doesn’t apply to normal corporations. Although the agency has suffered a significant drop in first-class mail over the last five years, the prefunding payments have accounted for most of the postal service’s losses in recent quarters…
To help the agency right itself, the postal service’s postmaster general, Patrick Donahoe, has asked that Congress lighten the prefunding burden, as well as allow the agency to undergo significant cuts to address the decline in mail due to web transactions. Those cuts include the phasing out of 150,000 jobs, the elimination of Saturday delivery and the closing of roughly half the agency’s … (more)
