U.S. Postal Service Facing Financial Struggle

NEW CASTLE, Del. (CBS) - You might want to mail your holiday cards early this year.

The United States Postal Service is very low on funds and could actually run out of money by the end of the year, forcing it to shut down.

"The situation is dire," Sen. Tom Carper (D-Delaware) said. But it's "not hopeless." He chairs the Senate subcommittee that oversees the Postal Service and says it's facing a "double whammy."

With a slow economy and increasing use of the internet, there are fewer pieces of mail every year which means less money coming in. Sen. Carper also says the Postal Service is facing some demanding costs including a $5.5 billion payment into a federal retirement fund by the end of September. And he says the financial problems will only grow through the winter.

The Postmaster General has proposed closing thousands of branches and eliminating Saturday delivery to cut costs, but Congress will likely need to step in to address the agency's looming deficit.

"Part of what Congress has to do is get out of the way; let the Postal Service act like a real business," Sen. Carper said.

Some say that could mean massive layoffs among the agency's half million employees, but Sen. Carper would prefer to return billions of dollars in overpayments the Postal Service has made to federal retirement funds. It could then use that money to incentivize employees to retire.

"We're worried," said Michael Mast, a 25-year employee at the postal distribution center in New Castle, Del. "I understand the economy's bad, but is that a reason to get rid of one of the longest, best services the government offers?"

Sen. Carper says the problem is compounded by the political gridlock in Washington.

"It's not an easy place to get things done," he said. "I could probably introduce a resolution that says 'Today is Labor Day,' and I might get 51 votes. I'm not sure I would get 60."

Reported by Ben Simmoneau, CBS 3