Mandate is killing US Postal Service
Although mail volumes are falling, it is not the Internet or even a bad economy that is killing the Postal Service.
By: Rachel Freehauf, West Fargo
The United States Postal Service has been making headlines lately and graced the Opinion and Metro pages of The Forum. The latest article stated that the agency can’t afford retirement and health benefits for its staff. Not so. The truth is that the USPS has fully funded pensions. In fact, the Office of the Inspector General and the Postal Regulatory Commission have studied and reported that the USPS has overfunded one of its pensions by $50 billion to $75 billion.
Although mail volumes are falling, it is not the Internet or even a bad economy that is killing the Postal Service. A huge congressional mandate is killing the Postal Service. The USPS is in trouble because of a 2006 congressional mandate that requires the USPS to massively prefund the cost of retiree health benefits over the next 75 years in just 10 years’ time. This cost covers not only current employees but employees who have yet to be hired – and it is on top of the cost for health benefits for current retirees.
No other company or agency in America is required by law to pre-fund future retiree health benefits. In the absence of this mandate, the Postal Service would have been profitable in the past four years, despite the worst recession in 80 years.
No rational company would choose to make pre-funding future retiree health benefits the highest corporate priority in today’s economy, and no company would use all its borrowing capacity to do so. But that is precisely what the Postal Service has been forced to do. As a result, it will soon exhaust its $15 billion borrowing authority – a line of credit established in 1970 to permit the USPS to invest in its retail and mail processing networks and to keep its huge vehicle fleet up to date.
The Postal Service and its employees don’t want a taxpayer bailout – they have not received any taxpayer funds in nearly 30 years. They want to use their own surplus pension funds to pay for pre-funding. This can only happen if Congress changes the current law.
Congress will be pivotal in the decisions about the future of the USPS. Proposed legislation exists in the House to fix this pre-funding mess and to get the USPS back on solid ground. Call your representatives and ask them to co-sponsor HR 1351.
Freehauf is North Dakota president of the National Association of Letter Carriers.