On Wednesday Thursday, President Obama is scheduled to give a speech on jobs and the economy. The timing of this speech coincides with news that the post office is set to default on a $5.5 billion dollar payment to their retiree health benefits fund. The possible default emerges because what has been a possibility for many years has finally come to fruition: the post office has run out of money and is basically bankrupt. Given the political climate, however, I can think of no worse time for any entity to need a bailout, even one as heavily regulated as the U.S. Post Office.
In my mind, the upcoming jobs speech is an added complication for post office officials. President Obama, by some reports, may be planning to ask for what is essentially another stimulus including, for example, infrastructure investments, payroll tax cuts, and extensions in unemployment benefits. But I wonder if the post office, which also needs a bailout of sorts, will fall victim to the nasty politics that are sure to follow in the wake of the President’s speech if he does ask for these things. In fact, there has not been bipartisan support for some of the proposals we have heard thus far about how to make the post office solvent again, and I suspect that, like the debt ceiling negotiations, the post office will become another political pawn that each side will try to use for its own political gain. Maybe I am wrong, but who knew that raising the debt ceiling could become as politicized as it did? It will be interesting to see how all of this unfolds in the coming weeks.