U.S. Postal Service Defaults on $5.6B for Future Health Benefits

Postmaster General Patrick Donahoe has begged Congress for legislative reforms, including elimination of the annual prefunding payments and allowing the agency to run its own healthcare system.

Without that flexibility to run its own affairs, innovate and raise revenue, Donahoe has said, the agency could require a taxpayer bailout of nearly $50 billion by 2017.

The U.S. Postal Service had been expected to default on the retiree health payment, which it has skipped twice before. The agency has said it is currently losing $25 million every day and has exhausted its borrowing limit.