August 22, 2011 / 11:05 AM / in 7 years

RPT-FACTBOX-U.S. Post Office's troubled financial past

(This is a repeat of a story that was first published on Aug. 21. No changes have been made to the text)

Aug 22 (Reuters) - 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 Americans.

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 September 2006.

* 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)

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