Mandates tying hands of postal service

Mandates tying hands of postal service

The other day there was a short blurb in the paper about the U.S. Postal Service defaulting on a $5.5 billion payment to the U.S. Treasury Department. I think this needs further explanation in regard to what it is, exactly.

In 2006, Congress passed a law called the Postal Accountability and Enhancement Act of 2006. This law required the postal service to completely pre-fund the next 75 years of postal retiree health care benefits to the tune of about $55.8 billion, within a 10 year period. (This pre-funding will cover retirees from the Postal Service who are not even born yet.) Payments of $5.5 billion have been made each year since 2007. This is a requirement that no other government agency or private corporation in America is required to do, let alone do so within a 10-year period. It is almost 50 percent funded; most other corporations run at a 28 percent pre-funding.

In first quarter of fiscal 2011 (Oct. 1 through Dec 31), the USPS logged a loss of $329 million; had it not been for this required pre-funding payment to the U.S. Treasury Department, they would have instead seen a net profit of over a quarter of a billion dollars. It is not (only) the Internet and e-billing that is damaging the USPS, it is certain Congressional mandates that tie the hands and profitability of the USPS.

Julia Doggett

West Chicago