Sequestration May Add to the Postal Service’s Financial Troubles

U.S. Postal Service officials expressed concern over the effects sequestration will have on business, despite being exempt from the $85 billion in cuts, The Hill reported.

USPS is not directly affected by sequestration cuts because it does not receive taxpayer funds, instead relying on its own sales for funding.  But, most economists believe the sharp budget reductions will have a drag on the economy overall, which could in turn affect postal revenues.

“Any economic or other factors that lead our residential and business customers to mail less [are] a concern,” USPS spokesman Dave Partenheimer told The Hill.

Sequestration will have no immediate effects on USPS business, as post offices will remain open and employees and suppliers will be paid on time, Partenheimer said. However, with projections of just 2.5 operational days of cash on hand by the end of the current fiscal year, the slightest economic disruption could vastly alter that picture.

Lawmakers have said they are close to striking a deal to overhaul the Postal Service. The looming economic downturn could speed up that process, an industry expert told The Hill.