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USPS hits borrowing limit for first time
Thursday - 10/18/2012, 8:09pm EDT
The Wall Street Journal first reported earlier this week that the USPS reached the limit on the amount of money it can borrow from the Treasury Department and is now dependent solely on its own revenue to sustain operations.
However, hitting the limit "has no effect on our current operations and employees and suppliers continue to be paid," USPS spokesman David Partenheimer said in an email to Federal News Radio. "In fact, we are currently experiencing increased revenue due to the holiday mailing season and the current election season from political and election mail."
Partenheimer said the first quarter of the fiscal year is typically the agency's strongest, which meant the Postal Service was able to make a $1.4 billion workers compensation payment to the Labor Department on Monday.
However, Partenheimer acknowledged that liquidity remained a concern, and the agency has projected low levels of cash for the foreseeable future.
The exhausted borrowing limit is just the latest in a string of gloomy financial news for the cash-strapped mail agency.
In the most recent quarter, the agency lost $5.2 billion and twice defaulted on $5 billion payments to future retirees' pension funds.
All the while, comprehensive postal reform legislation — which the agency say it needs to stay solvent — is, at least for the moment, off the table until after the election next month.
Earlier this year, the Senate approved a postal reform bill that refunded to the agency the overpayments it made to the federal retirement system, but made it more difficult for the agency to end Saturday delivery or close facilities.
The House has not yet taken up a bill. However, Rep. Darrell Issa (R-Calif.), the chairman of the Oversight and Government Reform Committee, has suggested a deal could be reached in the lame-duck session after the election.