U.S. Postal Service on the Verge of Going Broke?

VIDEO: Postal Service Reports $8.5 Billion Loss
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It's the biggest civilian employer after Walmart, but apparently the U.S. Postal Service is not too big to fail. Today, the Postal Service said that without Congressional action, it could be bankrupt by the end of next year.

"We will continue our relentless efforts to innovate and improve efficiency. However, the need for changes to legislation, regulations and labor contracts has never been more obvious," Postal Service Chief Financial Officer Joe Corbett said in a statement.

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The venerated 235-year-old institution is deep in the red. It lost $8.5 billion last year, shedding 105,000 jobs. In the next ten years, the agency could lose a whopping $238 billion.

Could The Post Office Really Fail?

Could it really be that the second oldest agency in America, created by Benjamin Franklin to help bind the nation together, is in danger of going out of business?

At a Post Office in the Washington, D.C. area, customers envisioned a world with no Postal Service.

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"I foresee that they could potentially become irrelevant or obsolete in the future," one woman said.

While not obsolete, mail carriers are certainly carrying less and less mail.

In the 2010 fiscal year, mail carriers delivered 6 billion fewer pieces of mail than in 2009.

Not only is the loss of business a blow, but the kind of mail postal workers are carrying is changing.

The average adult receives 41 pounds of junk mail each year, according to 41pounds.org, a nonprofit organization working to eliminate it.

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Junk mail, like advertisements, isn't as lucrative as first-class mail but it is increasingly the only mail that carriers have to deliver. In 2009, 59 percent of what was stuffed in your mailbox was advertising.

First-class mail, like personal letters, bills and payments, has traditionally generated more than half the postal service's total revenue, but it continues to drop.

Snail mail is on the same fast track to death as the Yellow Pages and classified ads, all thanks to the Internet.

VIDEO: Post Office cut backs
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Privatizing The Postal Service?

The post office does not receive tax money to operate, but taxpayers could be on the line if the agency defaults.

Some have suggested privatizing the service, but for now the post office still answers to Congress, and Congress has been reluctant to approve measures like closing local branches of the post office, a move that would save the institution money and help pull it into the black.

The Postal Service has asked Congress to approve other cost-cutting measures such as ending Saturday service, raising the prices of stamps and cutting its obligation to future retirees.

Sen. Thomas Carper (D-Delaware) vowed that the Postal Service will not go under and argued that the agency is crucial to American jobs.

"In mid-2011, the Postal Service will use up its line of credit [entering] crisis mode... What needs to be done is Congress needs to get out of the way and let them act more like a business and be more entrepreneurial," Carper said. "If we're interested in creating jobs and nurturing the environment for creating jobs, one of the worst things we can do is let the Postal Service go under."

Back at the post office near Washington, D.C., Doris Browne can't conceive of the Postal Service failing.

"I can't imagine America being without a post office -- everything is going down, down, down, but not the post office," Browne said. "It's greatly, very important, greatly needed."

Neither snow, nor rain, nor heat, nor gloom of night could do it, but a deficit just might stop mail carriers in their tracks.

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