Postal Service defaults on $5.6 billion payment

he U.S. Postal Service has defaulted on a $5.6 billion payment for retiree health benefits that was due on Monday, just as the Postmaster General had warned it would.

“We have not made the required $5.6 billion Retiree Health Benefits prefunding payment due Sept. 30, 2013,” wrote USPS spokeswomen Patricia Licata in an email to CNNMoney. She added that the default has absolutely nothing to do with the federal government shutdown. “We have been saying for several months that we will be defaulting on this payment. This is the third time we have [done so],” Licata wrote.

Postmaster General Patrick Donahue told the Senate Committee on Homeland Security and Government Affairs that the default was going to happen on Sept. 19.

At the time, he said the Postal Service was “in the midst of a financial disaster” and that it is “burdened by an outdated and inflexible business model” that prevents it from making payments.

Full article: http://money.cnn.com … e-default/index.html



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