By Athena Jones
(CNN) - The financial troubles at the U.S. Postal Service are about to get much worse.
Without help from the federal government, the agency defaulted on a big bill that was due Wednesday.
In addition, there may not be enough cash to pay for normal operations as soon as October.
The U.S. Postal Service defaulted on a $5.5 billion payment to the federal government.
"It's a big deal to the Postal Service, because they've never missed a payment on anything before," said Nicole Rhine, Assistant Secretary Treasurer of the National Association of Letter Carriers.
What was the money for? To cover health benefits for future retirees, pre-payments that are required under a 2006 law.
"We're putting money into that account for employees that don't work for the post office yet, some of them aren't even born yet, but that was the mandate that the law did," said Rhine.
It's an added strain for an already burdened agency. A sluggish economy, and the growing number of people paying their bills online have meant multi-billion dollar quarterly losses.
So what does that mean for your mail delivery? In a statement, the service said operations wouldn't be affected: "We will continue to deliver the mail, pay our employees and suppliers and meet our other financial obligations. Postal Service retirees and employees will also continue to receive their health benefits."
But they still must address operational losses. There are plans to cut costs by $22.5 billion by 2016 and return the agency to profitability. It's already shutting down some processing plants and has offered retirement packages to thousands of employees.
It's also cutting hours at some post offices and wants to end Saturday service.
Unions want to reduce the money set aside for health benefits, and don't want to see services out.
"What we're really asking is to slow down the rate of the pre-payments. I think there's gotta be some closings and consolidation. That's modernization. It just doesn't need to be as draconian and as quickly done as is what is necessary right now," said Cliff Guffey, President of the American Postal Workers Union.
Ultimately, new legislation will be needed to help put the organization on solid long-term fiscal footing. The Senate has passed legislation to help shore up the service's finances, but the House has yet to act.
Another$ 5.6 billion is due at the end of September.
The U.S. Postal Service says they won't be able to pay that either.
CNN