We may not drop off the fiscal cliff until January, but for the Postal Service the day of reckoning has already arrived. The New York Times reports that the Postal Service posted a staggering $15.9 billion loss for the past fiscal year, adding to the embattled agency’s woes. This is the latest depressing step in a downward spiral that has seen multiple failed payments, unpaid benefits and, as ever, congressional inaction:
The widely expected loss, more than triple the service’s loss last year, included accounting expenses of $11.1 billion related to two payments that the agency was supposed to make into its future retiree health benefits fund. But because of revenue losses, the post office was for the first time forced to default on these payments, which were due in August and October. Nearly $5 billion in other losses were because of a decline in revenue from mailing operations. The agency also reached its $15 billion borrowing limit from the Treasury.
Despite its financial troubles, officials said that the Postal Service would keep operating as usual and that employees and suppliers would be paid on time. The agency had warned that it could face a $100 million cash crunch in October because of a decline in revenue. But the agency reported more than $500 million in revenue from campaign mailings by candidates, political parties and other interest groups before the election. The agency said the revenue from political mail and the holiday season should help its cash situation until Congress acts on legislation to overhaul the post office.
It’s hard to be surprised by news like this anymore; the Postal Service has been a sinking ship for a long time now. The combination of poor management, competition from email and congressmen who are more concerned with keeping postal jobs in their districts than with keeping the agency solvent has made it nearly impossible for even the most competent manager to reform. The USPS badly needs Congress to act before the windfall from the flurry of holiday mail runs dry, but with the fiscal cliff dominating the Beltway conversation, the chances for a quick fix are slim.