Washington, D.C.—The U.S. Postal Service defaulted last week on a mandated $5.5 billion payment to prefund retiree health benefits. The default is not expected to interrupt the delivery of mail at this time.
USPS also said it will not make an additional $5.6 billion payment due Sept. 30. These will be the first times the USPS has defaulted on its prefunding payments, required by a 2006 congressional mandate. Several times previously, Congress has agreed to allow the USPS to defer the required payments.
"Most people feel Congress will not take any action to force the USPS to make the payments in the near term at least," said Jack Widener, postal counsel with American Business Media, in a statement. "At this point, it appears the House of Representatives does not want to deal with the postal financial crisis until after the election."