Bleeding the USPS

Saturday February 9, 2013

Do you think the U.S. Postal Service is deeply in the red because of mismanagement? Because of competition from private carriers? Because of a bloated work force?

If you think any of those, you are wrong.

The reason the USPS is considering cutting Saturday delivery is something called the Postal Accountability and Enhancement Act of 2006, which requires the Postal Service to prefund the next 75 years of retiree health benefits by 2016.

As Ralph Nader said, that congressional mandate forces the USPS to cover employees who haven’t even been born yet.

This mandate was only inflicted upon the USPS, no other governmental agency, and some have ventured to say it’s an attempt by Congress to dismantle the National Association of Letter Carriers, which represents about 200,000 city delivery letter carriers.

Others say it’s just another example of Grover Norquist’s philosophy of shrinking government to the point where it can be drowned in the bathtub.

Let us not forget that the USPS does not receive tax dollars or subsidies from the federal government; it is intended to be self-funding.

Under PAEA, the Postal Service is required to make $103.7 billion in benefits between 2007 and 2016, or on average a little more than $10 billion a year.

Since the enactment of PAEA, the Postal Service has lost $41 billion, nearly 80 percent of which can be attributed to having to prefund the retiree benefits plan.

Astoundingly, according to the Inspector General, the annual payments could be eliminated because the USPS’ retirement fund is at more than 100 percent.

In addition, the Postal Service has overpaid $80 billion to the Civil Service Retirement System and the Federal Employees Retirement System, according to the USPS’ Inspector General.

And to no one’s surprise, the federal government has made no effort to repay the USPS for the overpayment.

Nader maintains if Congress were to reverse PAEA and reimburse the overpayment, the Postal Service wouldn’t be in the predicament it is today.

Instead, the Postmaster General is making small cuts here and there to try to stem the hemorrhaging; either way, the post office is bleeding to death.

The most recent pronouncement to come from the Postmaster General is his intention to cut Saturday services.

"Ending Saturday delivery not only threatens the future of the U.S. Postal Service in the long term, but in the short term it harms small businesses’ ability to carry out their operations in a timely manner, may inhibit the elderly’s ability to receive important medication by the mail, and will drive even more customers away from the USPS and toward private mail carriers like UPS and FedEx," wrote Nader.

Nader admits that declining mail volume has contributed to the USPS’ woes, as has the financial crisis, but it’s not the chief problem affecting the post office’s bottom line.

"The Postal Service’s ‘financial crisis’ is in fact an entirely manufactured ‘crisis’ precipitated by the ill-advised schedule of prepayments ... mandated by the 2006 PAEA ..." wrote Nader.

The Reformer urges our readers to contact their senators and representatives in Washington, D.C., and ask them to rescind the PAEA and reimburse the Postal Service the money it has overpaid into the federal retiree system.

Rather than hacking the USPS to pieces, perhaps we should call upon Congress not to surreptitiously bleed the system until it falters and collapses, leaving for-profit industries to scoop up the pieces.

We don’t believe that would be of benefit to anyone.


If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.

Powered by Creative Circle Media Solutions