It isn't news that the United States Postal Service is a giant fiscal disaster. In 2012, the Postal Service reported a record breaking $15.9 billion loss. The majority of that loss came from $11.1 billion in unsustainable healthcare benefits for new retirees. In 2013, a $5 billion loss was reported, totaling $20 billion in losses over the past two years. Now, lawmakers on Capitol Hill and the Government Accountability Office are warning about a potential Postal Service bailout footed by American taxpayers.
Earlier this year, Inspector General David Williams warned that unless Congress does something to help the troubled agency, it'll go out of business.
The troubled U.S. Postal Service has reached its own debt ceiling and will go out of business this year unless Congress rescues it, the inspector general said.
"The choices are that it would cease to exist or it would need a bailout," David Williams, the chief postal watchdog, told Britain's The Guardian newspaper.
The service -- one of the few government agencies explicitly authorized by the Constitution -- has reached its $15 billion credit limit with the U.S. Treasury and has effectively run out of money, said Williams, whose job is to prevent fraud, waste and program abuse and promote USPS efficiency.
"This is the year that they borrowed so much that they can't borrow anymore," he told the newspaper.
So how much of a bailout are we looking at here? According to Williams, about $64 billion to meet legal requirements.
Again, the biggest issue facing the Postal Service? The incredible cost of government over promising healthcare benefits. The bigger challenge? Reforming those benefits.