Fixing the Postal Service?

A bill that has passed the House and expected to pass the Senate will reform the USPS to improve finances.

The bill, which the White House and postal unions sup­port, would elim­i­nate a re­quire­ment that the Postal Ser­vice pre­fund re­tiree health ben­e­fits, sav­ing what the Postal Ser­vice projects is $27 bil­lion over 10 years.

The bill would also re­quire postal work­ers to en­roll in Medicare when they reach 65 years old—some­thing that Con­gress said about a quar­ter of the agency’s work­ers don’t do. That change would save the Postal Ser­vice about $22.6 bil­lion over a 10-year pe­riod, the agency es­ti­mates. It also would make per­ma­nent six-day-a-week de­liv­ery, a pol­icy that Con­gress has put into

WSJ 3-4-2022

Don’t you like the use of “saving” and “save?” Those retiree health benefits are a cost to the postal service and those who use it regardless of when they are paid. As long as the benefits don’t change those costs are ongoing and increasing. It’s all accounting.

Requiring 65 year olds to enroll in Medicare is long overdue. However, as usual, the costs are merely moved from one area of government to another.

By the way, the unfunded liability for Medicare is estimated to be $33.7 trillion dollars

5 comments

  1. Bottom line, who entered into the contract with the postal workers, and who committed to maintaining retiree medical coverage? A quasi-federal government entity. So, if they don’t fund their commitments for retiree medical as part of current operations, who gonna pay?

    From the Q&A on the union website. Note that they call it a “legal obligation”. So, as Dick suggests, the benefits are likely still a “legal obligation”, but, funding those benefits, apparently, not so much …

    Pre-Funding Mandate
    Q4: What is the “Pre-Funding Mandate” and how does it impact the Postal Service?
    A: The Postal Accountability and Enhancement Act (PAEA) of 2006 required that the Postal Service “pre-fund” 100 percent of its retiree health benefit liabilities, 75 years into the future, at a cost of $5.5 billion a year over the first ten years. The USPS now “owes” the government over $35 billion of the unpaid portion of this legal obligation. The draconian pre-funding mandate is a large reason why the Postal Service slowed service and curtailed hours of operation, closed processing plants, increased subcontracting, and severely reduced staffing. It also hurt the Postal Service’s financial ability to upgrade buildings and infrastructure, and purchase a new vehicle fleet.

    Q5: How does this legislation address the pre-funding mandate?
    A: The Postal Reform Act will completely repeal this unfair law and absolve the USPS of the portion of the “mandate” that they were unable to pay. Retiree health care costs will return to the “pay as you go” system that was in place before the 2006 PAEA and was being successfully met by the USPS year after year. Repeal of this mandate has been a major legislative goal of the APWU.

    How many of you out there have access to taxpayer funded retiree health coverage beyond Medicare?

    Get your wallets out folks.

    Liked by 1 person

    1. And, if you think someone else is gonna pay, let me know who your candidate is – the French? When the union (multiemployer) pensions foundered, because of deliberate, intentional, criminal underfunding over decades, who got stuck with the bill? taxpayers. Think it was inadvertent? Well, it was President Jimmy Carter who was one of the first to recognize the funding issue, when he signed into law the Multiemployer Pension Plan Amendments Act of 1980!

      Liked by 1 person

  2. The USPS should be run more like a business. People spend $3 or more on a cup of coffee at Starbucks. So, why doesn’t Congress allow the USPS to raise first class mail rate to $1 or more. Why is it cheaper in many cases to mail a package at USPS, than at FEDEX or UPS. Also, why are the new trucks that the USPS wants to purchase not getting better MPGs than the old ones they are replacing and only 10 % will be EV??? With gas prices at an all time high, it is just crazy not to look at the bottom line costs and adjust prices accordingly. Who needs 6 day mail delivery??? pay back to the unions I am sure.

    Liked by 1 person

  3. You are right that the “savings” would be a shifting of costs from the Post Office to Medicare. But it would end the almost 20 years of wrangling over the Post Office budget and the requirement to prefund retiree health benefits. The net cost overall (to the PO and the federal government at large) will be zero I suspect and there would of course be no savings as you have stated.
    .

    Liked by 1 person

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