USPS running out of cash; may default on pensions

WASHINGTON (KGO) -- The postal service says it's running out of cash and may not be able to make a $5.5 billion pension payment this month. In fact, the postmaster general says things are so tight -- the postal service may have to shut down this winter unless congress takes emergency action to stabilize its finances.

The service faces a $9 billion deficit this year and officials are considering dropping Saturday service, closing 3,700 locations and laying off 120,000 workers to save money. The postal service is mandated to deliver six days a week, but they are hoping to change it to five, which they claim would save about $3 billion a year.

"Our situation is definantly dire; we definantly need relief from congress on six to five of the delivery, retiree and health care benefits and some of the things we have been asking for -- like the ability to close post offices and things like that. But it is not all doom and gloom, there is hope out there for the postal service and I know that we will get through this situation, as dire as it seems now - we will get through it," said local USPS Spokesperson Jim Wigdel.

A national USPS spokesperson also discussed the September 30 deadline:

"It would come to the point where the postal service would have to close its doors, but we continue to work with congress and expect there will be a solution eventually," said USPS Spokesperson Yvonne Yoerger.

The postal service's fiscal year ends September 30. Congress has just returned from recess and will hold a hearing on the matter Tuesday.

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USPS, economy, national/world, amy hollyfield

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