Friday, April 15, 2016

USPS Fiscal Crisis


By

C. Neuroticus Absolutus

The United States Post Office (USPS) is a quasi-federal agency of the federal government, meaning that it operates under the direction of the US Congress. In 2006, the Congress mandated the USPS to pay forward $5.5B for 75 years annually into an account for future retirees’ health coverage.
Note here that the USPS is mandated to pay $5.5B for health benefits for employees who haven’t even been hired or born yet. While a few corporations are doing the same, none are paying ahead for future retirees’ employee health benefits for such an extended time. As you might guess, the USPS defaulted on the payment on the first due date and has run a deficit since that time.
This past week, the postal service lowered the cost of a single stamp by $.02. This was touted as a savings to the consumers of $2 billion annually. But with the current annual deficit, this is an additional loss of $2 billion annually in revenue to the USPS.
Does that perk up your ears?
In a Republican controlled congress (for over 7-years now) that wants to privatize the USPS services, increasing the USPS deficit makes the postal service look like a financial drag on the government (they conveniently ignore the fact that the mandate of the $5.5B payout to the health fund is the cause of the rising deficit). What better proof to support those calling for privatization of the USPS? Get that burden off the government’s back!
Other tactics used by the congressional privatization group have been calls for 1) service degradation (change from 6-day delivery schedules to 5 days, doing away with Saturday deliveries. 2) raising postage costs to consumers to get their agreement that USPS services are getting too expensive and the USPS is doing a bad job. Sending Christmas cards last year for me cost $50 in postage and I’m certainly not happy about that. 3) The closing of some regional offices (Roanoke, VA, for example) and moving the sorting facilities farther away from the customers they serve. For USPS customers in the 24018 zip code area, the sorting is now being done is Greensboro, NC, causing a full day delay in delivery, even for addressees and addressers in the same zip code, a certain degradation of service.
Consider that the cost of a postage stamp before the congress mandated the $5.5B pay-forward health benefits for employee retirement (2005) was $.37. Today it’s $.50, an increase of 35% in 10 years, which I dare say is higher than the inflation rate of the same period.
My question is: Why has Congress mandated the fiscal failure of the USPS, especially when the USPS is already losing revenues to the Internet and competitors like UPS and FedEx? And why hasn’t the Congress relieved the USPS of this obvious burden by reducing the annual payments?
Further, what guarantees do we have that Congress will not “borrow” some (or all) of the billions accruing in the postal employees’ future health benefit fund, just like they ripped off the Social Security funds. Since they haven’t paid these loans back, they now say that Social Security is going bankrupt and want to put it on a better footing by privatizing it.
It’s obvious that any large pot of money just sitting there awaiting future use is too much of a temptation for the Republicans (Social Security and the USPS future employee retirement accounts and who knows what else?) They would rather privatize it all and let their banking cronies control our funds and charge us large fees for the privilege.

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