Mark Szakonyi, Associate Editor | Mar 08, 2012 2:59PM EST
The U.S. Postal Service, upping the pressure on Congress to allow it to overhaul operations, said Thursday that it will lose $83.2 billion by 2016 if it doesn't receive support for reforms needed to become profitable again.
The USPS wants to reduce annual costs by at least $20 billion by 2015 through the cutting of some 120,000 workers, breaking labor agreements, closing thousands of post offices, privatizing health care programs, ending Saturday delivery and stopping next-day first-class delivery. The agency also wants the return of a $11.4 billion overpayment to the retirement fund and the end of future payments.
The USPS lost $3.3 billion in its first fiscal quarter, as overall mail volume dropped 6 percent and the agency had to pre-pay nearly $3.7 billion in retiree health benefits.
“We have set out a roadmap to put our current financial crisis behind us and we are highly confident that it is achievable,” said Postmaster General Patrick Donahoe. “However, our success depends on whether we can quickly implement our proposed changes, and that depends on whether we can gain the necessary legislative reforms we need to move ahead.”
USPS expects to accrue a total debt of $92 billion if Congress doesn’t approve needed reforms. Donahue said in November that the House and Senate and President Obama’s reform proposals don’t go far enough, but pooling elements of each would allow the USPS to adopt a “rational business model.”
Contact Mark Szakonyi at mszakonyi@joc.com. Follow him on Twitter @szakonyi_joc.