The United States Postal Service Warns of Default

08 September 2011

Postmaster General Patrick Donahoe, left, speaks to the Senate Homeland Security and Governmental Affairs Committee in Washington, Tuesday. Next to him is John Berry, director of the Office of Personnel Management.

This is the VOA Special English Economics Report.

The United States Postal Service has a history as long as the nation's. The Second Continental Congress appointed Benjamin Franklin as the first Postmaster General in seventeen seventy-five.

This week, current Postmaster General Patrick Donahoe brought an urgent message to a Senate committee. He told the Committee on Homeland Security and Governmental Affairs that the Post Office could need more money by the end of the month.

PATRICK DONAHOE: " Without the enactment of comprehensive legislation by September 30, the Postal Service will default on a mandated 5.5 billion dollar payment to the Treasury to pre-fund retirement retiree health benefits. Our situation is urgent."

The Postal Service had losses of almost six billion dollars for the nine-month period ending in June. That could grow to ten billion for the year. Part of the deficit is a five and a half billion dollar payment to the federal retirement plan for postal workers.

Mister Donahoe is asking Congress to approve huge changes to the Postal Service. He wants to cut over one hundred thousand workers, close thousands of post offices and end Saturday mail delivery. He says the service needs to operate more like a business.