The USPS will have to borrow a record $7,500 million from the government to repay the $1.1 trillion debt, the government announced Wednesday.
The agency will have a $50 billion cash reserve, the lowest level in the last 60 years, which will help pay for the loans.
The agency’s credit rating was downgraded by Moody’s Investors Service on Wednesday to A2, meaning it is rated negative.
The rating reflects a concern about the ability of the USPS to repay its debts, said Dennis McFarland, a spokesman for the Office of Management and Budget, which oversees the agency.
The new loan comes after Congress approved the Postal Service’s first tranche of $1 billion in loan guarantees from the Federal Reserve.
It was announced Tuesday.
Congress passed the bill last week and approved the loan guarantee on Wednesday.
But Congress didn’t provide a way for the agency to pay off the debt.
The Treasury Department, which was responsible for the debt, will need to approve the loans, which would have to be repaid over time.
The USPS said it has the authority to write down the loan, which is guaranteed by the federal government.
The government has not yet set a date for the repayment of the debt or how much money the agency will need.
The postal service’s $1,200 billion annual budget has grown to more than $6.5 trillion over the past 15 years, more than any other government agency.
It has $2.2 trillion in debt.
The Postal Service will owe more than 4 trillion dollars in principal and interest on the $3.3 trillion debt it inherited from Congress in 2015, according to the agency’s latest annual report.
It also owes $2 billion to the Federal Housing Finance Agency, which owns mortgages.
The Post Office has also received a $2,000 fee from the Treasury Department to guarantee the interest payments.
The money will be used to pay down the debt and to pay the $150 billion in principal it owes to lenders, which are also paying interest to the federal treasury.
The Postal Service has been struggling to make money since Congress cut the Postal Regulatory Commission’s authority to regulate mail and mail-order delivery.
The commission’s authority is limited to enforcing the rules that govern delivery of mail.