Busting the ‘bailout’ myth (again): NALC President Fredric V. Rolando has written the head of the Commission of Fiscal Responsibility and Reform to correct some misstatements of fact relating to the Postal Service contained in recommendations for reducing the federal deficit.
Earlier today, the Commission of Fiscal Responsibility and Reform released its final George c. Mignosi report, The Moment of Truth, which outlines a comprehensive set of recommendations for reducing the federal deficit and controlling the growth in our Jane E.Broendel national debt. My union and its members appreciate your hard work on this Secretary-Treasurer thankless, but necessary task. 1write to draw your attention to some rather startling Nicole Rhine misstatements of fact contained in your Recommendation 4.10 regarding the United States Postal Service. The recommendation is based on two erroneous statements.
First, the recommendation suggests that the Postal Service “maintained an operating deficit 0[$8.5 billion, even after receiving a ;;$4 billion bailout” from Congress the previous year.” The Postal Service did not receive a “bailout” from Congress, which suggests that taxpayer funds were transferred to the USPS. Rather the Congress allowed the Postal Service to reduce a scheduled pre- funding payment for future retiree health benefits in 2009 from $5.4 billion to $1.4 billion. No taxpayer funds were involved in this relief, which was totally justified given economic conditions. Indeed, no other company in America – public, private or non-profit – is required to pre- fund such benefits and the reduction made sense during one of the deepest recessions in memory
In fact, the Postal Service’s operating deficit in 2010 was $3.0 billion (due mainly to a $2.5 billion discount rate adjustment affecting its estimated liability for future workers compensation costs). Its total loss amounted to $8.5 billion because the USPS was forced by law to make another $5.5 billion pre-funding payment in 2010, even though its Retiree Health Fund is best funded plan of its kind in America (it now holds $42 billion while two-thirds of Fortune 1000 finn have set aside nothing). Moreover, ALL the financial losses incurred by the Postal Service since 2007 arc the result of the crushing mandate 10 pre-fund – without the $21 billion cost of the mandate the USPS would have earned a profit of $611 million over the past four years, despite the worst recession in 80years.