U.S. Postal Service: Another Looming Crisis

Potential Default Looms

The losses have caught up to USPS. It is projected to reach its statutory borrowing limit ($3 billion per year/$15 billion) by the end of its fiscal year in September. At that time, a $5.5 billion RHB bill and a $1.2 billion workers' compensation liability will come due. Mr. ZIP will fall about $2 billion to $3 billion shy. Thus, on Sept. 30 of this year, the Postal Service will default. What happens then is anyone's guess, as the post office's existence is constitutionally mandated. Mr. ZIP won't be collecting unemployment.