Elections Matter: The US Post Office are because of 2006 GOP congress


Elderly folks, rural communities and anyone with chronic conditions depend on the post office for medicine shipments from their private insurers. Saturday delivery helps that.

Many people who shop online (especially in sparse suburban and rural communities) and small packages (e.g. Netflix) depend on the post office for package delivery. And yes, that includes things ordered through UPS and FedEx who contract with the post office to deliver to rural and sparse suburban areas.

The post office is not bankrupt because of e-mail or Facebook. It’s because of unreasonable pension requirements passed into law by congress and signed by Bush:

But let’s not pretend its financial woes are the result of technological advances. It’s because the congress created rules for its pension plan that are designed to bankrupt it. This was no accident. Much like the teachers unions, postal workers are a strong Democratic constituency targeted for political reasons. (And yes, just as with ACORN, there are bunch of idiot Democrats who are helping to dig their own graves.)

These contribution levels have hurt the post office which runs on it owns profits (not taxpayer money), but pensions are not so independent:

A default of that magnitude sounds scarier than it actually is. Congress requires the Post Office to make inordinately huge pension-plan payments, for reasons which nobody can really understand. But in the final analysis, USPS pensions are a government obligation, and it doesn’t make a huge amount of difference whether they come out of a well-funded pension plan, a badly-funded pension plan, or just out of US government revenues.

What does make a lot of difference is the degree to which the Post Office is hamstrung by Congress. There’s still room for the Postal Service to reorient itself and become a successful 21st-century utility — but there’s no way that’s going to happen if it’s constantly on the back foot and if Congress prevents it from entering new businesses, possibly including banking.

Again, what did the Republican congress require the post office to do? Prefund it’s pensions in full for 75 years. There is no company or government agency that has to do that. none.

One prevalent myth is that delivering the mail to 150 million addresses six days a week, as more people turn to the Internet, puts taxpayers on the hook for multibillion-dollar losses. In fact, boosted by record worker productivity, the Postal Service is admirably weathering the worst economy in 80 years. In fiscal 2007 through 2010, if you subtract the related costs from the earned revenue from mail delivery (the Postal Service hasn’t received taxpayer money in 30 years), it had an operating profit of $611 million.

There is indeed red ink, but the reasons are unrelated to the mail. In 2006 Congress required that, within the next decade, the Postal Service pre-fund future retiree health benefits for the next 75 years — a burden no other agency or company faces. That accounts for 85 percent of all of the agency’s red ink since — and more than 90 percent of the $6.46 billion shortfall from the first half of fiscal 2012. Before pre-funding began in 2007, the Postal Service had annual profits in the low billions. It’s this unaffordable payment that the Postal Service is “simply not capable of making” next month, a spokesman said this week.

The US Congress can save the Post Office by allowing them not to pre-fund the pension for 75 years. Then the USPS could focus on increasing revenue by including basic services like basic banking services (e.g. check cashing with nominal fees), currency exchanges and even payment processing for government agencies. On another note, you will hear many conservatives say the USPS should be privatized. Nothing that’s wrong with the USPS that needs privatization. And FedEx and UPS don’t have to do what the USPS has to do which is deliver mail to every postal address as mandated by the US Constitution.