By Peter Schroeder
President Obama needs to take "immediate and dramatic action" to salvage the U.S. Postal Service (USPS) before it defaults, according to Sen. Tom Carper (D-Del.).
The senator, who chairs the subcommittee that oversees the Postal Service, told the president in a Friday letter that the situation with the nation's mail is severe and within months of disaster. But he said there are options the government could pursue to get it back on more solid footing.
"While the situation is dire, it is not hopeless," he said. "Maintaining the status quo, as I am certain you are aware, is not an option."
The president is expected to include postal reforms in the deficit-reduction proposal it plans to send to the new supercommittee, and Carper used his letter to tout certain moves he has advocated for in the past.
He called for a broad overhaul to "right size" the nation's mail service, similar to what was done with the troubled domestic auto industry shortly after the financial crisis.
Among his suggestions are cutting mail service to five days a week, allowing the USPS to pursue other revenue streams, and restructuring its pension and retirement plans for employees to better shore up its finances.
The USPS is expected to hit its $15 billion borrowing limit by the end of September, and has indicated it would not be able to make the $5.5 billion payment due at that time. As the USPS seeks to delay that payment until the end of the year, those struggles are driving concerns that the agency could default. Carper warned in his letter that the USPS will have completely exhausted its cash and borrowing authority by August 2012 if nothing is done.