WASHINGTON (CNNMoney) — Without help from Congress, the U.S. Postal Service is likely to default on a big bill due Wednesday to the federal government — $5.5 billion to prepay health care benefits for retirees.
Postal officials have said they’re bracing for default on the payment. They also don’t have the money to make a $5.6 billion payment due Sept. 30.
Congress alone has the power to help the service. The Senate passed a bill to help the service back in April, but the full House has yet to consider the issue.
The service is in a financial bind, having reported several quarters worth of multi-billion-dollar losses due to the recession, declining mail volume and the congressional mandate to prefund retirement health care benefits for future retirees.
While default would be a first for the Postal Service, it’s largely symbolic. Postal officials have pledged that employees and subcontractors will continue to be paid and mail will be delivered as normal.