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Insolvent U.S. Postal Service Lost $1.9 Billion in Second Quarter

The United States Postal Service reported excessive losses of $1.9 billion during the second quarter of this year. If changes are not enacted by congress soon, the troubled mail services provider will struggle to continue delivery of its services to the millions of U.S. citizens that rely upon it. USPS has been losing money for decades, but it’s reaching a turning point, underscored by fervent budget needs that could see disruption in the postal service if not tended to by our elected lawmakers.

“To return the Postal Service to solvency requires a comprehensive approach, which is reflected in our updated five-year business plan,” said Postmaster General Patrick Donahoe.

“The major elements of the plan must be pursued and executed within a short window of opportunity to avoid unsustainable losses and potentially becoming a long-term burden to the American taxpayer,” he said in a statement.

Over the past two decades, mail services usages have declined substantially, further impacting the beleaguered mail carrier provider. The provider has already peaked its debt ceiling, an estimated $15 billion, and is currently in default on the $11.1 billion that is due to retiring workers’ health benefits for the fiscal year 2012. The service anticipates another $5.6 billion default by September of this year.

In efforts to reduce costs and gain solvency, the service has already slashed 46,000 jobs over the past year via severances and attrition. According to USPS records, their levels of employees are the slimmest they’ve been since 1996.

Current resolution plans on the table include talks of reducing mail delivery to a five day window and eradicating costly Saturday deliveries. The agency is also currently mulling the prospect of increasing postage rates, a move that could veer some customers away from the struggling services provider. Another option that could work in juxtaposition is mandating that employees pay more into their retirement in order to receive such benefits, and expanding products, services and offerings.

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