Those opposed to the 2006 legislative requirement that the USPS pre-fund its retiree health benefits appear to be in deep denial regarding the current financial status of the USPS. Far from being profitable in the absence of the pre-funding mandate, the most recent Government Accounting Office (GAO) report states that the USPS is expected to lose $14 billion in fiscal year 2012.
The astute reader will note this projected loss represents $8.5 billion more than the USPS’s current annual retiree health funding obligation of $5.5 billion. That’s because declining mail volume and excess operating expenses are far bigger problems for the USPS’s bottom-line than pre-funding the benefits they’ve promised their employees.
A reasonable argument could be made that a reduction in the pre-funding requirement is in order while the USPS reorganizes, cut costs, and tries to find new sources of revenue. However, any such reduction would mean that the unfunded liability for these promised benefits will grow even larger and the USPS may not be able to cover them, or in the words of the GAO: “We testified that deferring some prefunding of USPS’s retiree health benefits would serve as short-term fiscal relief. However, deferrals also increase the risk that USPS will not be able to make future payments as its core business declines. Therefore, we concluded that it is important for USPS to continue funding its retiree health benefit obligations — including prefunding these obligations — to the maximum extent that its finances permit.”
Given that both the Congressional Budget Office (CBO) and the GAO have repeatedly stated the federal government will be liable for USPS retiree benefits if the USPS fails to improve its financial situation I’m thankful that Congressman Darryl Issa — R-CA, is working proactively to prevent yet another taxpayer-funded bailout.
Judith Muehlbauer
Brainerd
Comments (6)
Add commentjunk mail
If they charged the junk mail senders the first class rates, they would be in the black before long! And the mail deliverers would see a gigantic decrease in what they have to carry around. And households would have a lot less recycling. Yes, their income would decrease, but it might be worth it. It would save a lot of trees, too!
I think the answer to the USPS
is to eliminate it all together and outsource it. The UPS does a lot better job, quicker, and more efficient.
Dump the US Postal Service and give the job to UPS?
Hmmm -- a couple of questions:
How much do you think UPS would charge to carry a 3-ounce first class letter from Brainerd to California? For that matter, how much would they charge to send a Christmas card to your neighbors down the block?
If UPS took over all the mail, do you think they'd stop at every home and business every day to see if there's any outgoing mail to pick up? Or would you have to cart your letters to the UPS office?
And one other thing...UPS employees can go on strike, but Post Office employees are forbidden by law to strike.
Mission...
...I think you're missing the point. The USPS should not be losing money. They need to stop doing things that are not profitable. If they can't profitably deliver on Saturday, they need to stop doing it. If they can't afford an unreasonable demand from a union, the arbitrators need to be able to consider the financial position of the USPS and tell the union leadership, "No, you can't have that, it will break the bank."
I know the USPS is being stopped from doing what they need to do by idiot politicians, but voters need to tell those idiot politicians to knock it off or they will be replaced by people with some sense of fiscal responsibility.
Oh mission, I agree that the UPS
is probably not really feasible as an alternative. My point is that the USPS is so bogged down with governmental red tape, that, personally, I think the private sector could do a better job. Except for 90% junk mail, how much real mail do people get these days?
pdnet,
Just remember, the Federal Government should be forced to return the money they "borrowed" from the USPS kinda like Social Security should get their's back. Hmmmm 60s, who woulda stole that cash?