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U.S. Postal Service Facing "Serious Liquidity Issue"

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"In addition, we are facing a serious liquidity issue. The growing gap between costs and revenue, even as we have increased our borrowing by the annual permissible limit of $3 billion, will result in a serious cash-flow shortage of up to $700 million for 2009.

Consequently, we will simply not have the means to meet all of our required obligations as we close the fiscal year. This will have a direct effect on our ability to meet the scheduled payment of $5.4 billion to the Postal Service Retiree Health Benefit Fund, which is required on September 30, by the Postal Accountability and Enhancement Act of 2006.

If we were to make that entire payment, the Postal Service would not have the working capital reserves to fund operations or meet its payroll obligations, both of which are critical to fulfilling our universal service mandate."
- Postmaster General/CEO John E. Potter, testifying before U.S. Senate August 6.