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.
The agency’s financial reports show that mail volume continues to decline as Americans increasingly turn to electronic forms of communication. Total mail volume was 159.9 billion pieces, down 5 percent from 168.3 billion pieces a last year. Operating revenue was $65.2 billion, down from $65.7 billion over the same period.
For nearly a year, the agency has been urging Congress to pass legislation that would allow it to save costs, including cutting back the number of days it delivers mail to five days a week, reducing annual payments required for its future retiree health fund and entering into new lines of business, like delivering beer and wine by mail.
Patrick R. Donahoe, the postmaster general, says Congress needs to act fast. “It’s critical that Congress do its part and pass comprehensive legislation before they adjourn this year to move the Postal Service further down the path toward financial health,” Mr. Donahoe said.
In April, the Senate passed a bill that provided incentives to retire about 100,000 postal workers, or 18 percent of its employees, and allowed the Postal Service to recoup more than $11 billion it overpaid into an employee pension fund. The Senate refused to stop Saturday deliveries. The House has taken no action, and it is unclear if the legislation will be taken up as lawmakers work to avert a series of across-the-board tax increases and spending cuts scheduled to take place Jan. 1.
The Coalition for a 21st Century Postal Service, a business group tied to the mailing industry, urged Congress to enact comprehensive postal legislation during its lame-duck session.
“The Postal Service is facing a fiscal cliff of its own, and any unanticipated drop in mail volumes could send the agency over the edge,” said Art Sackler, a coordinator of the coalition. “If Congress fails to act, there could be postal slowdowns or shutdowns that would have catastrophic consequences for the eight million private-sector workers whose jobs depend on the mail.”
Article source: http://www.nytimes.com/2012/11/16/us/politics/postal-service-reports-a-nearly-16-billion-loss.html?partner=rss&emc=rss