Respectfully submitted by Lawrence E. Rafferty (rafflaw)- Guest Blogger
It was big news this past week when the United States Postmaster General Patrick Donahue announced that the Post Office was planning to end Saturday mail delivery starting in August, 2013. In light of the large deficits that the Post Office is experiencing, the news is not surprising. What may surprise you is the real reason for the Post Office deficits.
“In 2006, the Republican-led Congress passed an unnecessary law requiring the United States Postal Service to pre-fund its pension benefits for 75 years through a $5.5 billion annual payment. The Postal Accountability and Enhancement Act of 2006 (PAEA) is the only one of its kind for a government agency. On August 1st of this year, the Post Office will likely default for the first time in its history on its 2011 pension payment. If Congress does not act, it will also default on its 2012 payment due September 30th.
The requirement has drastically harmed the functions of the agency, which is used by almost every American. In July, USPS began closing offices around the country to meet the annual payment. By the time current downsizing plans are completed in 2014, Americans will see 229 processing plants closed and 28,000 jobs lost. In June, ten USPS employees launched a multi-day hunger strike to protest the cuts. Without the pension payment, USPS would have a $1.5 billion surplus instead of a $20 billion shortfall. “[T]hese ongoing liquidity issues unnecessarily undermine confidence in the viability of the Postal Service among our customers,” said USPS spokesman David Partenheimer.” Think Progress
You read that correctly. If the Post Office had been allowed by Congress to fund its pensions and retiree health benefits as any other private or public entity, as of last Summer it would have had a $1.5 Billion surplus! I wonder why Congress decided in 2006 to put this onerous requirement on the shoulders of the United States Postal Service? Could there be political reasons why this move was taken in 2006 and is Congress trying to destroy the USPS?
Some reporters are suggesting that the Postmaster has made this announcement in an attempt to convince the public and therefore, Congress, that the harmful pension benefits prefunding requirement needs to be stopped or altered. It is Congress that put these “chains” on the USPS and has to this date refused its pleas to close many unnecessary post offices and the past attempts to end Saturday delivery. A bipartisan bill passed the Senate last year that would have alleviated the pension and health benefit payment requirements, but the House failed to pass the bill or even come up with an alternative.
“A bipartisan bill that passed the Democratic-led Senate last year would have ended Saturday mail delivery and eased its benefit payment obligations. But the Republican-led House of Representatives, which had advocated for aggressive post office closures, never voted on a postal bill. ” CNBC It amazes me that Congress can take a viable organization and put unreasonable and unnecessary restrictions upon it and then refuse to act to correct its own mistakes. On second thought, maybe it doesn’t surprise me.
Was the pension prefunding requirement passed in an attempt to force the USPS out of business and send business to the private sector? Did the House of Representatives refuse to accept the Senate fix or pass its own fix because of pressure from its rural constituents, letter carrier unions and/or private delivery services who would benefit from the closing of post offices or ending Saturday delivery? Congress has prevented the USPS from raising its first class mail rates as well as preventing it from necessary downsizing, but yet that same Congress claims that the USPS is being mismanaged.
It may surprise you that the USPS does not cost the taxpayers a dime. Esquire.com put it best. “The postal service is not a federal agency. It does not cost taxpayers a dollar. It loses money only because Congress mandates that it do so. What it is is a miracle of high technology and human touch. It’s what binds us together as a country.” Esquire
It is time for Congress to allow the United State Postal Service to act like any other governmental agency or private company when it comes to funding its pension and retiree health benefits. It is Congressional politics that has caused this dilemma and it is only Congress that can fix it. Doesn’t that worry you?