U.S. Postal Service Could Be Insolvent by End of 2011, Senator Carper Says

The U.S. Postal Service, which had a loss of $8.5 billion last year, may run out of money to keep operating by next year’s winter holiday season, said one of the top U.S. senators overseeing the agency.

“During next year’s holiday shopping and mailing season, the Postal Service may not have the resources necessary to open its doors,” Senator Tom Carper, a Delaware Democrat, said today in Washington at a Senate governmental affairs committee hearing about the Postal Service. Carper is sponsoring legislation intended to help the Postal Service earn more money.

The agency, which supports Carper’s bill, has said it may lose a cumulative $238 billion by 2020 if Congress doesn’t act. The measure would make it easier for the Postal Service to close post offices and cut a day of delivery. It would also require the agency’s financial condition to be considered when negotiations with labor unions reach arbitration.

Congress, led by Democratic House members, has thwarted the Postal Service’s request to eliminate Saturday delivery, and the agency’s regulator denied its request this year to raise postage rates by an average 5.6 percent, more than allowed by law.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net.

To contact the editor responsible for this story: Bernie Kohn at bkohn2@bloomberg.net.

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