Obama’s Budget Offers Relief to USPS
WASHINGTON, DC—Facing the prospect of having maxed out its borrowing capabilities and not being able to meet its financial obligations by September, the United States Postal Service (USPS) received a lifeline in the form of President Obama’s 2012 budget, which would provide $4 billion in temporary financial relief in 2011.
The move is less a bailout and more of a correction and reallocation of funds. USPS had overpaid its Federal Employee Retirement System (FERS) a whopping $6.9 billion. The budget proposes to repay the postal service over a 30-year span, with $550 million coming back in 2011.
Obama’s budget also provides relief on the USPS’ requirement to pre-fund retiree health benefits, providing a payment scheduled that stretches over 40 years, beginning in 2017. The budget envisions these relief solutions enabling the USPS to continue restructuring its operations, but cautions that meaningful reform is still necessary to keep it viable for the long term.