Sept. 5, 2011— -- As the U.S. Postal Service begins shuttering offices across the country to stem their ever-growing $9.2 billion deficit, the entire agency now faces default and could shut down next summer, USPS spokesman Dave Partenheimer told ABCNews.com today.
"Right now we think we can make it through until next summer most likely but then some hard choices will have to be made," he said. "That's why it's such an urgent crisis."
USPS owes $5.5 billion to fund future retirees' health benefits, and next year it may not have money to pay its 560,000 employees. Partenheimer said that by Sept. 30, the end of the USPS fiscal year, the agency will have reached its borrowing limit of $15 billion.
"That's why we cannot make the payment of $5.5 billion," he said. "Something we desperately need is action from Congress to operate more like a business. That's why we're looking at other proposals to save us money."
The Senate Homeland Security and Governmental Affairs Committee will hold a hearing on Tuesday on the situation.
According to The New York Times, the USPS is considering several revenue-boosting measures including gaining the right to deliver wine and beer, placing commercial advertisements on postal trucks and in post offices, and offering more hand-delivery services.
The USPS wants Congress to restructure their health care and retirement systems, to make them independent from the federal government. In addition, the agency would move to 5-day delivery, Partenheimer said, but can't do so without Congressional action.
"That would save us $3.1 billion," he said.
In the meantime, USPS continues to cut costs.
"We've reduced costs by more than $12 billion in the last four years and cut our career workforce by 110,000 in past four years," Partenheimer said.
Click here to see which post offices are on the list of proposed closures. You can select your state, and then check to see if your post office is on the list.
In July, when news about the office closures made headlines, Postmaster General Pat Donahoe told ABC News, "We do not want taxpayer money. We want to be self-sufficient."
Rep. Darrell Issa, R-Calif., the chairman of the House Oversight Committee, which oversees the Postal Service, has proposed a bill that would allow Congress to appoint a committee to take control of USPS until it's financially stable.
That bill has been referred to the Subcommittee on Federal Workforce, U.S. Postal Service, and Labor Policy.
The USPS responded to Issa's proposal saying, "We strongly oppose a provision in the bill that provides for an additional $10 billion in borrowing authority from the U.S. Treasury. The Postal Service does not need to incur additional debt."
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"Snail mail" has been on the decline for years due to email and electronic bill paying, but the USPS has yet to adapt, clinging to a traditional brick and mortar model.
A March 2010 report from the USPS highlighted a 17 percent contraction in mail volume between 2006 and 2009 due to "e-diversion, ad spend shift and the economic recession," resulting in $16 billion less revenue. The same report projected a 37 percent drop in first-class mail over the next 10 years.
In 2010 alone, the Postal Service experienced its largest one-year net loss of $8.5 billion.
A bill sponsored by Sen. Ton Carper, D-Del., chairman of the subcommittee that oversees the Postal Service, calls on the USPS to "develop a plan for the expansion of retail alternatives to post offices, such as self-service kiosks, vending machines, the Internet, Postal Service employees or contractors on delivery routes, and contract postal units."
That bill has been referred to the Committee on Homeland Security and Governmental Affairs.
In a July statement, Carper said, "The Postal Service is facing a dire fiscal crisis and two challenges -- the rapid transition to electronic communications and the lingering after effects of the Great Recession -- which threaten its very existence. In order to survive, let alone thrive in the 21st century, all options have to be considered and the Postal Service has to modernize the way it does business, including where and when it does business."
ABC News reporter Amy Bingham contributed to this report.