USPS Denied Exigent Rate Increase Request
The USPS may be unable to continue to meet a statutory 10-year payment schedule—averaging roughly $5.5 billion per year—to create a fund to pay future retiree health benefit premiums. It has been unable to fund this obligation from operations, and has instead used up all of its retained earnings and drawn down from its $15 billion borrowing authority. Even with the requested increase, the Postal Service would be unable to meet this annual obligation either in 2011, or in succeeding years.
The Postal Service achieved more than $6 billion in cost reductions in 2009. While volume declines outstripped cost reductions during the actual recession, Postal Service cost containment programs are said to be producing results and work hours have declined faster than volumes in 2010.