(WHAS11) -- The Postal Service is facing a financial crisis. It's losing millions of dollars a day and needs congressional help to get back on track. Next week will mark an important milestone in the service's struggle to pay an important debt to the government. Good Morning Kentuckiana’s Andy Treinen reports.
The US Postal Service is losing money and the situation is growing more serious by the day.
Something the postmaster general acknowledged on Capitol Hill this spring.
“We've got to get our finances stabilized. The quicker we act and get ourselves back on firm financial footing, the better for the industry,” said U.S. Postmaster General Patrick Donahoe.
If Congress doesn't act by August 1, the service will default on a $5.5 billion payment to the federal government to cover retiree health benefits. It would be the first default in its more than two hundred-year history.
"The postal service has said they're going to continue to pay its employees and they're going to continue to pay their bills and pay their subcontractors. So in some respects this default is largely symbolic," counters CNN Money.com reporter Jennifer Liberto.
Losses from a sluggish economy and the growing number of people paying their bills online have forced the service to tap a nearly $13 billion treasury department loan to make ends meet. The service has a plan to cut costs by $22.5 billion by 2016 and return the service to profitability.
It's already shutting down some processing plants and has offered retirement packages to thousands of employees.
It's also cutting hours at some post offices and wants to end Saturday service. Unions want to reduce the money set aside for health benefits and don't want to see services cut.
"I think there's got to be some closings and consolidation. That's modernization. It just doesn't need to be as draconian and as quickly done, elaborated Donahoe.
The Senate has passed legislation to help shore up the service's finances.
But the house has yet to act, despite Donahoe's warning about what will happen by October of 2013 without help.
"We would be out of cash as it stands now. I would strongly encourage Congress to move now," according to American Postal Worker Cliff Guffey.
The US Postal Service, and postal workers are still waiting.
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