For the second time in two months, the U.S. Postal Service is headed for default on a legally required payment into a fund for future retiree health care benefits. (GETTY IMAGES)
For the second time in two months, the U.S. Postal Service is headed for default on a legally required payment into a fund for future retiree health care benefits.
The $5.6 billion payment is due Sunday. USPS executives have long acknowledged that they lack the money to cover it, but again stressed this week that normal operations will not be affected.
“We will continue to deliver the mail and pay our suppliers,” spokesman Dave Partenheimer said in a Wednesday statement, adding that health benefits for current employees and retirees will also remain untouched.
The payment for fiscal 2012 is required under the 2006 Postal Accountability and Enhancement Act to ensure adequate funding for future retirees’ health care; in August, the Postal Service failed to make the $5.5 billion installment for fiscal 2011. That payment was originally due last September, but Congress postponed it.
Lawmakers declined to grant further delays. Although the defaults do not directly affect postal operations, they are driving enormous paper losses that USPS leaders fear could undermine confidence in the mail carrier’s long-term survival prospects. As of August, the agency’s red ink for fiscal 2012 totaled about $14.5 billion, according to preliminary numbers released Wednesday. Almost three-quarters of that sum is attributable to the retiree health care pre-payment requirement.
No other federal agency faces a similar mandate; ending it is a top priority for Postal Service leaders. A Senate-passed bill would stretch out the payment schedule to cut billions of dollars from the installments due each year. House leaders have so far declined to take up that bill or a rival measure sponsored by Rep. Darrell Issa, R-Calif. With Congress now out of session, the last chance for legislative action will come in a lame-duck session set to begin Nov. 13. A spokeswoman for House Majority Leader Eric Cantor, R-Va., declined comment this week on whether postal legislation will be on the agenda.