(This is a repeat of a story that was first published on Aug.
21. No changes have been made to the text)
Aug 22 The U.S. Postal Service, worn down by
years of multibillion-dollar losses and facing insolvency next
month, is lobbying Congress to pass a measure allowing it to
overhaul its business model.
The government agency, which does not rely on taxpayer
support, expects to default on a $5.5 billion retiree health
payment in September. [ID:nN1E77I0WT]
The quasi-independent U.S. Postal Service delivers almost
half the world's mail and employs over half a million
Here is a timeline of its financial history:
* 1970-1: After a two-week strike by more than 200,000 U.S.
postal workers, Congress passes a law granting the agency power
to negotiate wages and benefits. The law also gives the agency
responsibility for funding its own operating costs with
revenues from postal services.
* July 1971: Five unions merge to form the American Postal
Workers Union, the world's largest postal union.
* Dec 2006: President George W. Bush signs a law requiring
the agency to set aside about $5 billion each year for future
health benefits of its workers. U.S. post offices are barred
from offering nonpostal services like selling greeting cards or
prepaid phone cards.
* 2007-2008: The Postal Service begins reporting
multibillion-dollar losses as mail volume falls and an economic
recession takes hold. Mail declines by more than 11 billion
pieces by 2008 as consumers increasingly correspond by e-mail
and pay bills online.
* July 2009: The Government Accountability Office puts the
Postal Service on its list of "high-risk" federal agencies
needing attention by Congress and the president.
* Sept-Nov 2009: Congress allows the agency to defer $4
billion of a scheduled $5.5 billion payment for retiree health
benefits. In November, the agency still posts $3.8 billion in
net losses for the year.
* Jan 2010: In response to appeals from local communities
and resistance from lawmakers, the agency reduces a list of
post offices slated for possible closure to 162 from 1,000.
* March 2010: The Postal Service says it will incur $238
billion in losses in the next 10 years. It proposes eliminating
Saturday delivery, shutting post offices or raising its prices
-- moves that need congressional or regulator approval.
* July 2010: The agency proposes raising the price of
stamps for first-class mail -- letters, packages and cards from
citizens and businesses -- but the Postal Regulatory
Commission, an oversight body, turns down the request.
* Nov 2010: Despite cutting more than 100,000 jobs, the
Postal Service reports $8.5 billion in losses for the fiscal
year ended in September. Mail volume has fallen an
unprecedented 20 percent since the fiscal year ending in
* Feb 2011: President Barack Obama includes $4 billion in
relief to the agency in his proposed budget for fiscal year
2012. The budget stalls as Republicans and Democrats deadlock
over increasing U.S. borrowing authority.
* June 2011: Postal Service officials say the agency
expects to reach its $15 billion borrowing limit this year and
will probably default on its health benefits payment in
September. The GAO reports that the Postal Service's financial
problems are "reaching a crisis" and it must restructure.
* August 2011: The Postal Service proposes cutting 220,000
jobs and shuttering 300 processing facilities by 2015. The
agency sends a note to employees saying, "We will be insolvent
next month due to significant declines in mail volume and
retiree health benefit prefunding costs imposed by Congress."
(Reporting by Lily Kuo; Editing by Peter Cooney)