U.S. Postal Service About To Default; Struggles To Make Ends Meet
According to the U.S. Postal Service, it is about to default on a required $5.5 billion payment, and will likely miss another $5.6 billion payment at the end of September. Postal spokesman Dave Partenheimer said "Without congressional action, we will default on both payments."
Congress is apparently willing to allow the postal service to default, with the House of Representatives saying they are not going to take up any action to deal with the problem until the fall at the soonest.
The Senate has already passed a postal service bill that would reduce the payments and lead towards more restructuring.
Both payments are to a health benefits fund for workers and retirees. Pension funds have become the hot topic for politicians and large companies has more and more are unable to fund the ever growing massive retiree funds once promised to them.
The postal service has struggle over the last 10 years. While it used to operate at a profit, the advent of email, internet, wifi, and secure electronic documents have marginalized the USPS somewhat as it struggled to reinvent itself. UPS and FedEx have also taken a bit out of its wallet as both began offering ground speed parcel services at lower prices and some electronic services.
The cites of San Bernadino, Mammoth Lakes and Stockon, all in California, have filed for bankruptcies. Municipalities across the U.S. have either laid off large portions of their police force and fire departments, walked away from pension funds, or declared bankruptcy after being unable to make scheduled payments into promised pension funds for their public workers, which in many cases accounts for nearly 50% of their budgets.
Nearly 150 cities and municipalities have decalred bankruptcy or are about to according to research and public records as of July 1 of this year.
There have been large moves in various cities and at big companies to restructure their pension funds, see that promising so much is simply not financially possible.
This though, has drawn the ire of pension beneficiaries and unions that represent government workers.