Congress crippled Postal Service

The latest announcement by the postmaster general (plan for five-day delivery) requires a little background.

Before 2006, Congress had unfairly forced the Postal Service to pay for pensions earned by employees for their service in the military. This money should have been paid by the Treasury. The Postal Accountability and Enhancement Act of 2006 fixed that.

But because Congress decided that the bill must be budget neutral, it concocted a scheme requiring the Postal Service to fork over $5.5 billion every year to prefund 75 yearsí worth of future retiree health benefits within 10 years, a burden no other company or agency is required to do.

Because the Postal Service has been an independent agency of the government since 1971, it makes its money from postage sales and services and pays its own bills. At the time the bill was passed, the USPS could afford it, so it wasnít a problem until the economy sank into recession. The USPS has defaulted for the past two years on the prefunding requirement. That account already has $45 billion in it, enough to take care of retiree health benefits for decades but the Postal Service isnít allowed to use it until 2016. Nice for Congress, right?

The USPSís money crisis has very little to do with being able to operate effectively and almost everything to do with this crippling and unnecessary prefunding mandate. Congress is lazy and unwilling to do the right thing.

Andrea House


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