Monday, September 5, 2011

US Postal Service nears default

US Postal Service mailboxes are seen awaiting disposal Thursday, Sept. 1, 2011, in San Jose, Calif

Source: Press TV

The United States Postal Service, which has long lived on the financial edge, is on the brink of a default as it lacks cash to make its payments.

The agency may have to shut down entirely this winter if it’s not able to make a USD 5.5 billion payment, The New York Times reported.

Congress needs to take emergency action to stabilize the service's finances and prevent its collapse.

“Our situation is extremely serious,” the postmaster general, Patrick R. Donahoe, said in an interview. “If Congress doesn't act, we will default.”

This is while, the agency is considering cost-cutting measures including laying off 120,000 workers - nearly one-fifth of the agency's work force - to ease its deficit which will reach USD 9.2 billion this fiscal year.

The service needs congressional approval to overturn job protections and go ahead with its planned layoffs.

Powerful labor unions are angry with the move and have vowed to take action against it.

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