(CBS NEWS) -- The U.S. Postal Service reported a net loss of $15.9 billion for the fiscal year ending September 30, a record for the agency, as mail volume continued to fall.
The Postal Service's loss was driven in part by a requirement that the semi-government agency prefund retiree health benefits to the tune of $11.1 billion. Even without that payment, however, the agency would have nearly matched last year's annual net loss of $5.1 billion.
In announcing the news, Postmaster General Patrick Donahoe called on Congress to act to help get the mail delivery service onto sound financial footing.
"It's critical that Congress do its part and pass comprehensive legislation before they adjourn this year to move the Postal Service further down the path toward financial health," he said. The Postal Service is seeking more leeway to manage its business independently and reductions in prefunding retiree health benefits.
A plan put forward by the agency requests approval to determine delivery frequency - which would likely mean the elimination of Saturday delivery - the right to offer non-postal products and services, a "more streamlined governance model" allowing for quicker decision-making on pricing and other business decisions, and that arbitrators take into account the financial woes of the agency during labor discussions.
The Postal Service is legally prohibited from accepting tax dollars, but it has been borrowing from the U.S. Treasury to stay afloat. Federal law dictates that such borrowing be capped at $15 billion. Having exceeded its borrowing authority in September, the Postal Service defaulted on more than $11 billion in payments to the Treasury earlier this year.
First class mail delivery dropped 3.9 percent over the past fiscal year, and standard mail dropped 4.3 percent compared to last year. Package services delivery ticked upward, but overall total mail volume fell from 168.3 billion pieces a year ago to 159.9 billion this year.
The Postal Service, which has 530,000 employees, has cut 504 million work hours since 2000 and made changes to delivery routes in response to declining mail volume. But it needs approval from Congress to make the sort of structural changes that would allow it to start climbing out of its financial hole. Under the current structure, it is not clear that the Postal Service will be able to continue meeting its obligations to employees and suppliers for much longer; Donahoe descried liquidity as a "major concern" that illustrated the need for congressional action.
At a Board of Governors meeting Thursday, MarketWatch reported, officials predicted the agency will run out of money in October of next year. According to Bloomberg, Donahoe said that while the Postal Service is "walking a financial tightrope," it will never stop delivering the mail. "We are simply too important to the economy and the flow of commerce," he said.
But Congress' attention during the lame duck session will largely be elsewhere. Lawmakers will be focused primarily on averting the combination of spending cuts and tax hikes known as the "fiscal cliff," and the Postal Service's problems are thus likely to receive little attention.
There are competing proposals in the House and Senate to make changes to the Postal Service. The House proposal would create a commission to oversee the closure of facilities, Bloomberg reports, while the Senate measure, which passed earlier this year, would make it more difficult to close facilities or reduce delivery to five days per week. Both proposals would reduce the burden on the agency to prefund future retirees' health benefits. The House has not passed a bill.