Postal Service Loses $2.2 Billion in 2nd Quarter

The U.S. Postal Service reported a loss of $2.2 billion in the first three months of the year, compared with a $1.6 billion loss a year ago, Reuters reported.

The postal service is warning that by September, it may default on payments to the federal government, Reuters said. One of these would be billions earmarked for a trust fund to provide health care benefits for future retirees.

Such a default would not interrupt mail service, but could cripple an agency already struggling with a sharp decline in business because of the Internet and a moribund economy.

The Postal Service, which reported a loss of $8.5 billion in its 2010 fiscal year, hopes to win approval from Congress to eliminate Saturday delivery and to restructure labor contracts.