Federal News Network: House coronavirus spending bill gives USPS $25B, wipes slate on its Treasury debt

“House Democrats unveiled a coronavirus stimulus spending package on Monday night that would give the Postal Service $25 billion over the next two years to withstand an expected loss in mail revenue.”

“The $2.5 trillion Take Responsibility for Workers and Families Act is the third and largest emergency funding bill lawmakers have introduced to mitigate the pandemic’s strain on the economy and the health system.”

“In addition to setting aside $25 billion for USPS until September 2022, the 1,400-page bill would also forgive the Postal Service’s $11 debt to the Treasury Department and allow the agency to borrow another $15 billion. The bill would also eliminate a $3 billion annual borrowing limit for this line of credit from Treasury…”

“The bill would also require USPS, deemed an essential service amid the pandemic, to prioritize the delivery of medical products, including prescription drugs…”

“The Postal Service warned Congress last year that it would run out of cash by 2024 without legislative and regulatory reform – even sooner, if USPS paid all of its financial obligations.”

“But an economic recession triggered by the coronavirus pandemic could accelerate that timeline and jeopardize the operations deemed an ‘essential service’ during the spread of COVID-19, the illness caused by the current strain of the virus.”

“The same night President Donald Trump signed a $100 billion coronavirus aid package into law, four of the largest postal unions requested a similar relief package for the Postal Service, which has already been facing a looming financial crisis.”

“The Postal Service, in a statement Tuesday, said it has experienced ‘only minor operational impacts in the United States’ because of the pandemic.”

“However, unions fear an economic recession could pose a ‘serious threat to the near-term viability of the Postal Service,’ and have asked Congress to give USPS more than $7 billion each year for the next two years…”

“’With no changes to existing law, the Postal Service now estimates it will run out of cash and have to cease operations in May of next year,’ according to a document provided by Connolly’s office.”

“Paul Steidler, a senior fellow with the Lexington Institute, said the coronavirus pandemic is ‘all but certain to have a severe, negative financial impact on [USPS], significantly accelerating when it will face a liquidity crisis and be unable to provide basic services…'” Read the full article here.

Source: House coronavirus spending bill gives USPS $25B, wipes slate on its Treasury debt – By Jory Heckman, March 20, 2020. Federal News Network.

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