With the U.S. Postal Service on the brink of default, the Obama administration is set to propose a plan that would give the agency a three-month extension on its financial obligations.
The announcement comes after the postmaster general warned lawmakers on Tuesday that the postal service could default by the end of this month.
"Our situation is urgent," Postmaster General Patrick Donahoe warned the Senate Committee on Homeland Security and Governmental Affairs Committee. "The congressional action is needed immediately to avoid this default."
The agency currently has a $9.2 billion annual deficit. As Americans increasingly turn to email, text messages, and other forms of communicating through social media, the revenue needed to fight that deficit has been substantially reduced.
"Our infrastructure was built to handle more demand than we have today," said Dean Granholm, the Postal Service's delivery and operations vice president.
The agency is due to pay more than $5 billion at the end of this month for retiree health benefits, a payment the postmaster says they can't make.
On the verge of default, the Postal Service is asking Congress for permission to make some changes. Those modifications would include:
- Eliminating thousands of jobs.
- Changing health care and retirement programs.
- Consolidating post offices.
- Ending Saturday mail delivery across the country.
The plan the White House is proposing would delay the Post Office's required payment for 90 days. But a long term solution is still needed.
"We definitely need relief from Congress on six to five-day delivery, retiree health benefits, and some of the other things that we're asking for, you know, the ability to close post offices and things like that," Postal Service spokesman Jim Wigdel said.
"But it's not all doom and gloom," he added. "I mean, there is hope out there for the Postal Service."
Despite reduced mail flow, the Postal Service continues to deliver more than half a billion pieces of mail a day.