Postal Service loses $3.2 billion, will skip health payment

A Postal Service plan to return to profitability is running into roadblocks in Congress.
Andrew Harrer | Bloomberg News
A Postal Service plan to return to profitability is running into roadblocks in Congress.
Posted May 10, 2012, at 9:41 p.m.

WASHINGTON — The U.S. Postal Service said Thursday it lost $3.2 billion in the quarter ended March 31 and won’t have the cash to make a required payment for future retirees’ health benefits.

The loss widened from $2.2 billion a year earlier as mail volume declined further, the service said today in a statement. The service must by law pay $11.1 billion for future health benefits by the Sept. 30 end of its fiscal year.

The 10th consecutive quarter of losses may spur the House to consider its version of legislation intended to overhaul the service, which is supposed to be self-sufficient, and return it to profitability. The Senate has passed a bill that didn’t give the service all the changes it requested, including permission to end Saturday mail delivery.

“The Postal Service can’t afford to continue hemorrhaging money like this,” Sen. Tom Carper, the Delaware Democrat who co-sponsored the Senate bill, said in an emailed statement. “Congress can’t stand idly by and allow it to continue to creep towards collapse. The Postal Service supports a trillion-dollar mailing industry and over 8 million jobs.”

The Postal Service, which lost $3.3 billion in its first quarter, has forecast a record $14.1 billion loss for this fiscal year. That compares with a $14.6 billion loss in 2008 for Ford, the only one of the three biggest U.S. automakers to not receive a U.S. government bailout.

House Republicans pass sweeping domestic cuts, spare Pentagon

WASHINGTON — House Republicans approved a sweeping package of budget cuts to food stamps, Meals on Wheels and other domestic programs — while sparing the Pentagon — in an election-year showcase of party priorities.

Democrats overwhelmingly opposed the legislation, which is expected to stall in the Senate, but House Speaker John A. Boehner’s decision to call a vote gives the GOP an opportunity to highlight its agenda and attack President Barack Obama’s efforts to reduce the deficit. The bill was approved on party lines, 218-199.

The legislation is “literally taking food out of the mouth of babies” while continuing tax breaks for the wealthy, said Rep. Nancy Pelosi, D-Calif., the minority leader. The cuts would replace across-the-board reductions to both defense and nonsecurity programs that had been agreed to as part of last summer’s debt-ceiling deal with the White House.

Republicans countered they were tackling the nation’s deficit problems while preventing steep military cuts that Defense Secretary Leon E. Panetta has said would be devastating.

The legislation would cut $242 billion over 10 years — a down payment on the $1.2 trillion in deficit reduction Congress had agreed to after months of negotiations as part of last summer’s deal to raise the debt ceiling.

Report: Suspect billings at 2,600 drugstores

WASHINGTON — A pharmacy in Kansas billed Medicare for more than 1,000 prescriptions each for two patients in a single year, part of a pattern of questionable billings at 2,600 drugstores nationwide uncovered by federal investigators in a report Thursday.

The inspector general of the Health and Human Services department found that corner drugstores are vulnerable to billion-dollar fraud, partly because Medicare does not require the private insurers that deliver prescription benefits to seniors to report suspicious billing patterns.

“While some pharmacies may be billing extremely high amounts for legitimate reasons, all warrant further scrutiny,” said the report. Medicare paid $5.6 billion to drugstores whose billings are being questioned.

The analysis broke new ground by scrutinizing every claim submitted by the nation’s 59,000 retail pharmacies during 2009 — nearly 1 billion prescriptions. Using statistical analysis, investigators were able to reveal contrasts between normal business practices and potential criminal behavior.

Wreckage of Russian plane found on Indonesia mountain

MOSCOW — Wreckage from a Russian passenger plane that disappeared over west Java in Indonesia was found early Thursday morning on the western slope of Mount Salak at about the 5,000-foot level, Russian television news reported.

No survivors were found among the 45 people on board, including eight Russian crew members and 37 passengers from Indonesia, the United States, France and Italy. Indonesian paratroopers descended on the site from helicopters and found bodies in what was left of the plane, Moscow radio news reported. The remains will be taken to Indonesian clinics for DNA testing, the report said.

The Sukhoi Superjet 100 disappeared from radar Wednesday afternoon about 20 minutes into its second demonstration flight of the day, part of a promotional tour of Southeast Asia for the new aircraft.

The cause of the crash is unknown.

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