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With Wednesday Deadline, Postal Service Nears Retiree Payment Default

The U.S. Postal Service is set to default on a $5.5 billion retiree health benefits payment to the Treasury due Wednesday, the agency announced Monday.

The agency added it will not make another $5.6 billion payment due Sept. 30 and is waiting on Congress to pass legislation reforming the Postal Service’s financial structure.

The Senate has passed the Postal Reform Act, which would return an estimated $13 billion surplus the inspector general claimed should never have been paid in the first place.

All agency retirees and employees will continue to receive pay and health benefits, and daily operations should not be affected, the agency said in its announcement.

In fiscal year 2011, the Postal Service recorded a $5.1 billion loss and Postmaster General Patrick Donahoe said at a June conference that agency’s financial situation was similar to Greece’s.

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