The US Postal Service yesterday released a rather sparse financial report (a single PowerPoint slide) showing that its fiscal year 2011 loss now stands at $5.6 billion with three months to go.
Postal operations account for $1 billion of the total loss. The remaining $4.6 billion is due to trust fund and accounting mandates imposed by the 2006 PAEA law. Since 2006 Congress has demanded $5.5 billion from the USPS annually for a so-called trust fund to finance health benefits for future postal retirees. As mail volume declines, the Congressional mandate forces the USPS to borrow money from the Treasury that it then loans back to the Treasury. (More creative accounting from the folks who brought you the “debt ceiling”!)