The U.S. Postal Service defaulted on a $5.6 billion payment for retiree health benefits that was due Monday.
Postmaster General Patrick Donahoe told the Senate Committee on Homeland Security and Government Affairs last month that the default was going to happen.
At the time, he said the Postal Service was in the throes of a financial disaster and that it is "burdened by an outdated and inflexible business model" that prevents it from making payments.
Postal officials have long complained about a Congressional mandate that requires them to set aside billions of dollars for a retiree health care fund each year. The Postal Service also defaulted on these prefund payments last year.
In fiscal year 2012, the Postal Service lost a total of $15.9 billion, including $11.1 billion in defaulted payments that it owes to prefund health benefits for retirees. Postal officials have pointed out that other federal agencies aren't required to prefund for retirees.
The Postal Service also hit its debt limit last year, meaning that it cannot borrow any more money from the U.S. Treasury.
The Postal Service plans to cut 150,000 workers through 2015, and recently proposed a price hike for stamps. Officials have said that the crisis won't go away until Congress makes the prefund requirement disappear.