U.S. Postal Service could shut down by winter

WASHINGTON, Sept. 5 (UPI) -- The U.S. Postal Service, facing a deficit that will reach $9.2 billion this fiscal year, could be forced to close this winter, officials say.

"Our situation is extremely serious," Postmaster General Patrick R. Donahoe said in a New York Times article published Monday.

Donahoe has been advocating spending cutbacks recently that would eliminate Saturday mail delivery, close as many as 3,700 postal locations and result in layoffs of 120,000 employees, nearly 20 percent of the Postal Service's workforce.

The delivery service, which has no-layoff clauses with unions, faces higher costs, particularly for labor, which accounts for 80 percent of its expenses.

It also has seen revenue decline as the Internet has resulted in fewer people relying on traditional mail as they use other delivery companies, e-mail, pay bills online, and receive news and advertisements online.

"The situation is dire," said Sen. Thomas R. Carper, D-Del., chairman of the Senate subcommittee that oversees the Postal Service. "If we do nothing, if we don't react in a smart, appropriate way, the Postal Service could literally close later this year. That's not the kind of development we need to inject into a weak, uneven economic recovery."

Without emergency congressional action, by early next year the agency won't have the money to pay employees and put gas in its delivery trucks, which would force it to stop delivering the estimated 3 billion pieces of mail it handles weekly, the Times reported.

But lawmakers haven't agreed on a solution.

Among other things, the Postal Service has asked Congress to allow it to discontinue Saturday delivery but that has drawn criticism.