In 2006 Congress passed the Postal Accountability and Enhancement Act that required the Postal Service to fund future retiree health care premiums for 75 years within a 10-year period ending in 2016. This mandate requires the Postal Service to pay $5.5 billion a year for a total of $55 billion.
No other government agency has to make this kind of pre-fund payment. Because of this law, the agency is pre-funding health care premiums for workers who haven’t even been hired.
Hell, they are pre-funding health care premiums for people who haven’t been born yet.
Basically, the Postal Service must start out each year $5.5 billion in debt. Two independent audits, one commissioned by the Postal Service’s Office of Inspector General (OIG) and another by the independent Postal Regulatory Commission (PRC), have shown that without this pre-fund requirement the Postal Service would have had income exceeding expenses for this time period.
Additionally, be sure to note how the USPS is strictly forbidden to raise rates in order to generate the money to fund the mandate.
No other federal agency has this burden.
Frankly, if George W. Bush & the Republican-controlled Congress had not mandated this $5.5 billion payment per year, the Postal Service would be in the black.
The long-term viability of this agency is in doubt because Republicans in Congress wanted it that way, no other reason.
The U.S.P.S. is the largest unionized employer in America and what better way to further demonize unions than to bleed the Post Office dry then blame it on the “big bad union”?
Remember, the USPS isn’t a government agency, it is considered a non-profit business (required to be “revenue neutral”). In other words, it’s not supposed to turn a profit, it’s supposed to break even.
If allowed to carry on the way they were the U.S.P.S. would be doing just that…making enough to pay the bills.
In comparison, imagine if the DOD had to pre-fund retiree’s health care for the next 75 years, then based on next year’s VA budget request of $140 billion they would have to sock away $10.5 trillion over the next 10 years.
In other words, they’d have 10 straight years where they had $0 in their budget for anything else.
If it sounds stupid when put that way, that’s because it is stupid.
Oh yeah. Remember that $5.5 billion that the USPS is paying each year?
The federal government takes that and spends it. That’s right, they end up with the same IOUs that the Social Security Trust Fund has. And we all know how motivated the Congress is to find the necessary funds to redeem those.
Source: Michael Westberg, Daily Reader