Just in time for Christmas season, the U.S. Postal Service has presented taxpayers with a record deficit of $15.9 billion annual losses to go with a recently approved increase in postage rates, according to a USA Today report..
The cash-hemorrhaging heavily-subsidized host of snail-snail mail edged closer to its own fiscal cliff as email and online transactions continue to cut into postal profits of outdated services in the Internet era.
Meanwhile, private companies including Federal Express and UPS have captured much of the parcel/package business while the Postal Service depends on taxpayers to stay in the game.
The fiscal year ended Sept. 30 and follows the Postal Service's $11.1 billion default payment for retiree-health-benefit payments announced earlier this year, according to the report.
The massive deficits reflect losses in first-class-mail volume, the agency's primary revenue driver and the losses mean U.S. Postal Service will likely require a new taxpayer-funded infusion in about 12 months.
Fortunately, election season mailings and an expected 20% revenue boost from 2012 holiday shipping are expected to provide the Postal Service with enough earnings for the time being.
Some are already arguing that Congress needs to bail out the subsidized postal service even though the U.S. government has amassed a $16 trillion debt, including nearly $6 trillion racked up over the last four years.
"If Congress fails to act, there could be postal slowdowns or shutdowns that would have catastrophic consequences," said Art Sackler, leader of the Coalition for a 21st Century Postal Service.
Postmaster General Patrick Donahoe wouldn't specify a date when delivery could stop. Although the agency has defaulted twice on retiree health obligations and recorded multi-billion losses in five consecutive years, it has continued to operate thanks to huge government subsidies.
"We're walking a financial tight rope—we can't sustain these large losses," said Postmaster General Patrick Donahoe. "Legislation must be passed in the lame-duck session," setting up the next round of debate for postal funding.
Meanwhile, the price for First-Class Mail single-piece letters will increase by a penny when prices change in Jan. The new 46-cent “Forever” stamps allow customers who buy extras to mail one-ounce letters to any location in the United States “forever.”