The USPS's $5.5 Billion Default: What Happened and How it Could Affect Your Business
The United States Postal Service (USPS) has officially defaulted on a $5.5 billion payment due to the U.S. treasury today, and plans to default on a similar payment of $5.6 billion due September 30. While mail delivery and postal products are not expected to be affected yet, such changes could be on the way as losses continue to snowball.
NPR has a quick writeup of the reasons for the default here, but in brief, a combination of congressional election-year gridlock, decreased mail volume and a methodology of paying retiree benefits that has largely backfired, has caused the USPS to lose a reported $25 million a day.
For those interested in more information, Bloomberg has detailed piece explaining the failures of the USPS pension plan, and Direct Marketing News has word on how, if at all, the losses will affect postal prices and other mail products.