Bill’s Author Can’t Change the Facts: Postal ‘Reform’ Created the USPS’ Financial Plight
In a continuing effort to rewrite history, the author of the Postal Accountability and Enhancement Act (PAEA) has attempted to refute the Postal Service’s contention that the 2006 law is responsible for the Postal Service’s current financial difficulties. The law requires the USPS to place in escrow more than $5 billion per year for 10 years to pre-fund future retiree healthcare benefits.
The attempt to dismiss this burden as the cause of the USPS’ misfortune would be laughable, except that the words are those of a United States senator. Because of the power she wields, her assertions must be addressed:
The 2006 law that the senator defends has forced the Postal Service virtually into insolvency. It imposed on the Postal Service a $75 billion liability that is not borne by any other federal agency. This single requirement has created a USPS deficit of alarming size.
I am disappointed that postal management has failed to release financial records showing USPS liabilities minus this obligation. Such documents would clearly demonstrate the disastrous effect the legislation has had. Absent this obligation, the Postal Service would have experienced a cumulative surplus of $3.7 billion over the last three fiscal years, despite declining mail volume, an economy in chaos, and electronic diversion.
Furthermore, I am compelled to ask: If funding future healthcare liabilities meets sound accounting standards, why isn’t this requirement applied to all federal and private enterprises? Why doesn’t every branch of government, including Congress, pre-fund future healthcare liabilities? What is unique about the Postal Service that it should be singled out?
The PAEA was a mistake, a gross miscalculation, which provided no new revenue stream for the Postal Service, while imposing massive, artificial new costs.
It is easy to suggest that the Postal Service should offer new services in order to remain financially sound, while ignoring free-market obstacles. I challenge the law’s defenders to name one new service or product the USPS could offer that would be accepted without challenge by private-sector competitors and that would result in short-term profit for the Postal Service.
And how can the USPS be expected to fund new enterprises that would require significant start-up costs while it is saddled with a $75 billion debt? The reality is that requiring the payment of $5.6 billion annually for 10 years would bankrupt any American corporation.
It is apparent that ostriches are not alone in their ability to bury their heads in the sand.