The United States Postal Service, USPS, is near default according to the latest reports. Now, while the US Postal Service going broke or losing money is not any new news, this time around things are getting serious. USPS head Patrick Donahoe warns that if Congress does not act, they could default on a $5.5 Billion dollar package to their union employees by the end of September. Their current shortfall is some $9 Billion dollars and they have already gone another $12 Billion in debt to date. A total shutdown looms if Congress does not take steps to allow the USPS adjust its schedules and rates.

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On top of the list for now is ending Saturday deliveries. The law requires six-day delivery service, so Congress will need to approve of reducing the schedule. The move would mean some 20,000 postal employees, mostly part-time help, being let go. About 80% of the USPS costs are in labor, so Donahue wants changes in the law to deal with the Postal unions. Another round of rate increases will shore up the deficits, but for the immediate future, the USPS will need $9 billion dollars from Uncle Sugar to get through the coming holiday season.

Aside from competition from United Parcel Service (UPS) and Federal Express (FedEx), which the US Postal Service uses themselves for some delivery options, email is the big problem. In recent years, about 20% fewer letters are being mailed. So what can the USPS do to rebound from this lost market? One idea being considered is to utilize their capabilities and offer a grocery delivery service. Given the aging of America, many seniors and other disabled people do have difficulties at times obtaining groceries. Aside from New York City and a few other major metropolitan areas, home delivery of groceries simply does not exist. Here again, Congress would have to legislate, especially if they wanted to include the delivery of certain products currently banned, such as wine and beer.

With the United States Postal Service going broke and facing default by the end of September, Congress must act quickly to avert yet another disaster. Patrick Donahue is asking for at least $9 Billion dollars to tide them over for the rest of the year. He also wants to end Saturday deliveries, which will require legislation by Congress. Nobody wants to see the USPS shutdown, especially with the holiday season approaching. But changes will need to be made if the US postal Service is to find a way to operate and thrive in the 21st Century.