By Tom Quiner
The U.S. Postal Service is a hybrid.
It’s not a real business, because they’re not allowed to turn a profit.
On the other hand, it is an independent government agency that doesn’t receive taxpayer money.
The Post Office is losing money. The Senate is proposing a $34 Billion bailout at taxpayer expense.
Before you blame the Post Office for this situation, be aware that they have attempted to cut employees and close offices with light volume.
The Senate said no. They received too much heat from voters in small towns who didn’t want to lose their local post office, so they blocked the Post Office from saving costs and righting the ship.
There’s more Congressional meddling. Congress placed 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, pre-fund 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.
Congress is the root cause of the economic woes confronting the U.S. Postal Service.
Either let them be truly independent. Or better yet, let’s privatize them.