Post Office Warns It Could Become Insolvent

Law360, New York (May 11, 2011, 2:24 PM EDT) -- The U.S. Postal Service said Tuesday that it lost $2.2 billion for the quarter that ended March 31, warning of defaults on payments to the government if a law forcing it to prepay into a massive employee health fund isn't changed.

As an agency under the executive branch, the post office can't technically go bankrupt, but it has to fund its own operations and could become insolvent. That could create havoc inside the federal government and impact its obligations to pay other agencies, such as the...
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