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US POSTAL SERVICE DEFAULTING WITH BILLIONS OF DOLLARS |
| (07/31/2012) |
| The U.S. Postal Service is cocked for a first-ever default on billions in payments due to the US Treasury, adding to the uncertainty about the mail agency's solvency and future. As income from first-class letters fall and Congress remains deadlocked on ways to stem the red ink and deal with the problem. The agencies cash is running low and two legally required payments for future postal retirees' health benefits - $5.5 billion due Wednesday, and another $5.6 billion due in September - will be left unpaid. Officials said they also are studying whether they may need to delay other obligations with another $1.5 billion payment due the Labor Department for workers compensation, which for now it expects to make. Several millions in interest payments to the US Treasury are hanging. Officials say the defaults won't stir any kind of catastrophe in day-to-day mail service, for now. US Postal finds is preoccupied with staving off immediate bankruptcy while Congress delays on a postal overhaul bill. Many US post offices have cut back hours of operation, and many more are slated to be closed, mostly in rural areas. Two Calhoun post offices, Millstone and Orma, are on the current closure list with several hundred in West Virginia. Times have changed with FedEx, UPS and the Internet, making the US Postal Service partially obsolete. Banks are promoting electronic payments, citing in part the growing uncertainty of postal mail. The federal government will stop mailing paper checks starting next year for millions of people who receive Social Security and other benefits, paying via direct deposit or debit cards instead. First-class mail has fallen 25 percent since 2006, and is projected to drop more. The Postal Service, an independent agency of government, does not receive taxpayer money for operations but it is subject to congressional control. The service is now losing $25 million a day.
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