Despite maxing out a $15 billion line of credit with the U.S. Treasury last month, the U.S. Postal Service can scrape by at least through March.
That’s according to Ruth Goldway, chair of the Postal Regulatory Commission, the agency that oversees the Postal Service. The commission meets with USPS officials following the release of each quarterly financial report, the last of which was in August. In the ensuing review, the Postal Service “projected that they would be able to continue operating without disruption until at least midway through the fiscal year without any action by Congress,” Goldway said in a statement to Federal Times. Fiscal 2013 began this month; the mid-point arrives at the end of March. The projection included the presumption that the Postal Service would hit the $15 billion borrowing cap, a commission spokeswoman said.
The mail carrier reached that unwelcome threshold Sept. 28. In an email, USPS spokesman Dave Partenheimer acknowledged that cash flow will be a particular concern in the second half of fiscal 2013 unless lawmakers approve a comprehensive fix to return the Postal Service to long-term financial stability (a very big if at this point). While declining to comment on any particular date, Partenheimer added that the Postal Service will prioritize payments to ensure that workers and suppliers get paid. Customers “do not need to worry about any interruption in our operations.”
One other factor in the Postal Service’s favor: it expects to pick up a fresh $1.3 billion in fiscal 2013 revenue courtesy of a series of rate hikes scheduled to take effect in late January.
Hartford employee Says:
October 23rd, 2012 at 10:32 am
No way …with all the overtime, late mail in the plants? We should be out of $ by then. Remember what got us in this mess in the first place….miss-management ! You better check those figures again!
October 24th, 2012 at 8:12 am
Customers “do not need to worry about any interruption in our operations.” …..well, no additional interruptions anyway…other than us shutting down needed plants and post offices, getting rid of several hundred thousand workers (if the mail is gone, then why are we hiring cheap replacements?), and our usual delayed mail and midnight deliveries nowadays. Nothing to see here, move along.
October 24th, 2012 at 3:34 pm
So what kind of scam is Congress running? scroll way down
Wait just a minute there cowpoke, that there is my retirement money. How can this be? Any other company in the USA that were to do what the Senate proposes to allow the USPS to do would land them in prison. Keep in mind that the USPS IS NOT A FED AGENCY, it is a false front subsidized and now they are trying to use my retirement money, that is so hands off!
Gee not too long ago Congress said FERS was an underfunded liability and now that they see we actually have a surplus that is our money they want to illegally take it from us to give to a PRIVATE company that cannot manage its own fiscal house and is now 15BILLION, that is OMG BILLION dollars in the hole now. And so Congress person once again instead of doing your job you pass it onto the federal worker!
“A postal source said we don’t need your money because they are fully vested at 75 billion dollars. He said they got enough money to pay the employees and retirees for next 13 yrs. He knows this thru his union and internal business at USPS”
The U.S. Postal Service has hit its $15 billion borrowing limit with the U.S. Treasury, adding to the financial pressures on the struggling mail carrier.
“It’s a serious concern,” USPS spokesman Dave Partenheimer said Wednesday. Currently, however, the agency — which has been buoyed by a recent flood of election-year mailings — is managing its cash to ensure that workers and suppliers are paid, he said.
Although the agency had to make a $1.4 billion payment for workers’ compensation Monday, no particular factor contributed to its decision to max out the $15 billion line of credit late last month, Partenheimer said.
“It was a cash management decision made based on our liquidity issues,” he said. That decision, which USPS officials had previously not disclosed, was first reported by The Wall Street Journal on Tuesday.
The Postal Service “is now walking a tight rope with no net,” Art Sackler, co-coordinator of the Coalition for a 21st Century Postal Service, a organization of mailing industry suppliers, said in a statement. “The longer Congress waits to enact postal reform, the more difficult and more expensive the solutions become.”
Partenheimer reiterated a call for Congress to approve legislation to restore the Postal Service to long-term financial stability. A bill passed by the Senate in April would let the Postal Service tap an estimated $11.4 billion surplus with the Federal Employees Retirement System for employee buyouts and other purposes. The House has not acted on either that measure or a competing bill by Rep. Darrell Issa, R-Calif., that would give a specially appointed board authority for putting the Postal Service back in the black
October 26th, 2012 at 11:20 am
The Postal Service is in independent establishment of the Executive Branch of the United States Government, so — yes, blonblue — it is a government agency. And, no, it’s not a “false front subsidized” or a “PRIVATE company” (sic). USPS has not received subsidies for decades and is not seeking any now. In fact, the Postal Service has been subsidizing the taxpayers, as a result of the 2006 Congressional mandate to prefund 75 years’ worth of future retiree health benefits within 10 years, creating a $42+ billion slush fund Congress is using to render “revenue-neutral” other (over)spending that would otherwise have to be funded by the taxpayers. In addition, due to errors in the statutory formulas setting the payment amounts, USPS has overfunded both of its retirement accounts: CSRS by $50-75 billion — depending upon which audit one accepts — and FERS by $13+ billion. These overpayments are being held by the Office of Personnel Management (OPM) and are fortifying the retirement accounts of other government agencies, which are funded through taxes. Finally, only 40% of the employees receiving Federal Workers Compensation benefits are Postal, and — yet — were USPS to quit contributing to its account, the Office of Workers Compensation Programs (OWCP) admits that it would not have the funds to pay benefits to anyone; obviously, the Postal Service is being forced to overfund this program, too, saving the taxpayers money.