9/5/2011 - USPS to default on $5.5 billion on pensions by the end of the month

Postal blues

The US Postal Service is so deeply in debt that it could default on a $5.5 billion payment for retiree benefits by month’s end.

The biggest burden: health-care benefits for retirees. Adjusted for inflation, health-care costs have soared 448 percent since 1972. Back then, benefits were only 8 percent of the USPS’ operating expenses -- but by last year they were 30 percent.

The result: The USPS lost $2.8 billion in 2008, $3.7 billion in 2009, $8.3 billion last year, and it’s $8.5 billion in the red this year.

So the USPS is asking Congress for permission to cut 120,000 employees, shed another 100,000 through attrition and fix its failing health-care system to remain afloat.