Postal Service: More red ink, missed payments as mail slumps

FILE - In this Feb. 7, 2014 file photo, U.S. Postal Service letter carrier Jamesa Euler delivers mail in the rain in Atlanta. Buffeted by threats from

FILE - In this Dec. 5, 2011 file photo, a customer places first class stamps on envelopes at a U.S. Post Office in San Jose, Calif. Buffeted by threat

WASHINGTON (AP) — The U.S. Postal Service is warning that it will likely default on up to $6.9 billion in payments for future retiree health benefits for the fifth straight year. It is citing a coming cash crunch that could disrupt day-to-day mail delivery.

The post office says it expects cash balances to run low by October. Postmaster General Megan Brennan stressed an urgent need for federal regulators to grant the Postal Service wide freedom to increase stamp prices to cover costs. She points to continuing red ink due to declining first-class mail volume and the expensive mandates for retiree benefits.

The Postal Service on Thursday reported a quarterly loss of $2.1 billion, compared to a $1.6 billion loss in the same period last year. That came despite double-digit growth in package delivery.