The United States Postal Service warned this would happen and it did — it defaulted on another $5.6 billion payment to its future retiree benefits account. It’s the second default by the agency in two months, and the USPS says it’s because Congress failed to act. Despite those woes, the USPS assures customers that business will go on as usual.
The first missed payment, that one for $5.5 billion, was in August. It’s just part of the USPS’ money woes — it said it expected to be in a $15 billion hole for the last fiscal year and predicts a deficit of $238 billion over the next 10 years, reports USA Today.
The money it owes is supposed to be for employment benefits for future retirees, a system mandated by Congress in 2006. It’s the only government agency that’s held to such payments.
Postmaster General Patrick Donahoe released a statement reassuring customers that they can be confident in the continued regular operations.
From USA Today:
“We will continue to deliver the mail and pay our employees and suppliers. Postal Service retirees and employees will also continue to receive their health benefits,” Donahone said, noting that current retirees’ health care is paid from the agency’s general operating budget.
“Comprehensive reform of the laws governing the Postal Service is urgently needed in order for the Postal Service to fully implement its five-year business plan and return to long-term financial stability,” Donahoe said.
Things seemed to be looking up for the USPS when the Senate passed legislation to allow it to use some of those retiree overpayments as well as keep Saturday mail delivery, but the House hasn’t acted on similar bills. Congress is in recess until after the November election, which means nothing more can be done until that time.