Posted: October 18th, 2012

USPS hits borrowing limit for first time in history

Blame it on the Internet. Now that you can pay bills online, send letters, documents and other important information through cyberspace, the postal service is taking on the chin. And in the pocketbook.

Blame it on the Congress. The Postal Service is required by Congress to make a health payment for future retirees – something not required of any other government agency or private business. To the tune of $5 billion each. Now, having hit its borrowing limit, the government agency can no longer borrow to make that payment, either.

According to CNBC, the USPS has hit its borrowing limit of $15 billion, meaning that it now has to rely solely on stamps and selling other services to pay its bills. The Postal Service is an independent agency of the government, which means it doesn’t use taxpayer funds. But it does fall under congressional control.

According to ABC News, while the Senate passed a bill in April that provides an $11 billion cash infusion, it also would delay many of the planned postal cuts for another year or two. The House remains stalled over a measure that allows for the aggressive cuts the Postal Service prefers. And since Congress isn’t acting on any legislation until after the elections in November, nothing is expected to happen until next year.

As we know here in Erie, the Postal Service originally sought to close low-revenue post offices to save money but after public opposition agreed to keep 13,000 open with shorter operating hours. It’s also is delaying the closing of many mail processing centers, originally set to begin this spring.

The news is actually embraced by many different factions, including, obviously, the private mail delivery industry and the banking industry, which can save up to a third of check processing costs when consumers and businesses pay bills electronically.

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