Economy
2:52 pm
Fri May 11, 2012

Carnahan says changes coming for Postal Service

The U.S. Postal Service is on track to run out of cash as early as October.

The agency has temporarily shelved plans to close some 3,700 underperforming post offices. 

The Postal Service has been hurt by the drop in first-class mail as more people switch to the Internet to communicate and pay bills.

But St. Louis Congressman Russ Carnahan says the agencies’ biggest problem stems from a requirement to prepay health benefits for future retirees.

“The big issue that has really dinged the postal service is just the retirement costs and the way that has been calculated for out years,” Carnahan said. “They’ve been held to a standard that other agencies have not…we need to fix that first.”

The Postal Service announced a loss of $3.2 billion for the first quarter of 2012.

Without legislative action, the agency would be forced to default on more than $11 billion in health prepayments due this fall. The Postal Service is seeking leeway from Congress to eliminate Saturday mail delivery and reduce health and other labor costs.

The agency said its new plan will save more, mostly by weeding out full-time postmasters who don't have labor contract protections and replacing them with part-time workers. It plans to discuss possible buyouts with 13,000 postmasters who are now eligible for retirement.