By Tom Quiner

I’m in the marketing business. I’ve created a ton of direct mail campaigns during my career. I communicate with customers and prospects via direct mail all the time.

I’ve certainly been critical of the post office in the past and will be in the future. I’ve called for the privatization of the post office.

Having said all of that, today I come to their defense. I read in yesterday’s Des Moines Register that on top of all the post office closings around the country, they are now going to offer slower service. First class mail will take two to three days for delivery instead of one to three days.

How did this all come about? You can thank Congress for placing an excessive burden on the Post Office in 2006. They passed a bill called the Postal Accountability and Enhancement law. The law mandates that the Post Office, unlike any other government agency or private business, prefund health benefits for their employees. As a result, the Post Office has had to pay $21 billion over the past four years to fund the health benefits of future retirees.

As the Postmaster General, Patrick R. Donahoe, explains:

“Unlike other American businesses, the Postal Service must pay cash today for health benefits that will not be paid out until a date far in the future. Other federal agencies and most private-sector companies use a “pay-as-you-go” system, paying premiums as they are billed.”

What happens to this money? It goes into a separate fund and is treated as “income” by the federal government, which makes the deficit look less horrendous than it already is. They do the same thing with the Social Security and Medicare trust funds, counting those proceeds as income.

You have read how the Post Office is losing money. It is because of this law. Could you imagine if the government forced other government agencies to abide by the same rule?

Here in Iowa, the Iowa Employees’ Retirement System is only 80 percent funded according to State Treasurer, Michael Fitzgerald.

By the way, I’m not saying that the idea of fiscally sound funding mechanisms for health care and retirement funds is a bad idea. It’s a good idea. But if the government thinks it’s a good idea for the Post Office, shouldn’t they apply it equally to other government agencies? They should have given the Post Office more time to build up their reserve fund. And when they do, don’t insult the taxpayers by counting these funds as income to mask irresponsible Congressional spending habits.

2 Comments

  1. Kurt Johnson on December 6, 2011 at 1:09 pm

    Tom,

    I had no idea that the money being paid out for future health care benefits was being spent by our federal government, and not invested in separate accounts. That is outrageous!

    • quinersdiner on December 6, 2011 at 1:33 pm

      It’s like any government “trust” fund. Is the money placed in a lockbox, or is it immediately spent? If the government is treating it as income and using the funds to mask the size of the deficit, they’re spending it. The U.S. Postal Service receives an IOU.

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