US Postal Service Expected to Default on Billions in Health Payments
(WASHINGTON) -- The ailing U.S. Postal Service is expected to default on two annual payments totaling more than $11 billion in health benefits for future retirees.
The USPS said this week that unless congress steps in, the Postal Service will be unable to make payment on the $5.5 billion it owes the government by Aug. 1, or the $5.6 billion that is due by the end of September, the New York Times reports.
“We are simply not capable of making either of these payments to the U.S. Treasury, in part or in full, while continuing to meet our other legal obligations, including our obligation to provide universal service to the American people,” USPS spokesman Dave Partenheimer said Wednesday, according to the Times.
The Wall Street Journal reports that legislative action is unlikely, as members of Congress prepare to depart Washington for August recess.
The Postal Service is deeply in the red, losing billions of dollars a year because of a sharp drop in mail volume. Critics say federal law prevents post offices from innovating to compete effectively with FedEx, UPS and other firms.
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