The ‘Big Lie’ about postal ‘bankruptcy’

National Association of Letter Carriers

Yesterday, in a mandatory stand-up talk, Postal Service management all across the country told letter carriers:

“If we were a private company, we would have already filed for bankruptcy and gone through restructuring—much like major automakers did two years ago.”

The Service repeated this claim in a press release distributed to the nation’s news media as well.

Of course, it’s not true. But the USPS seems to think that if it repeats this “Big Lie” often enough, most people—and especially members of Congress—will think it’s true.

So, let’s set the record straight: If the Postal Service were a private company, it would not have to file for bankruptcy because it would not be subject to a USPS-specific congressional mandate to pre-fund future retiree health benefits. As it is, it is the only federal agency required to do so: It must pre-fund these benefits some 75 years into the future on a massively accelerated schedule.

This postal-only mandate, which costs the USPS $5.5 billion per year, accounts for 100 percent of the Postal Service’s $20 billion in losses over the past four years. It also accounts for 100 percent of the rise in the Postal Service’s debt in recent years. Without the mandate, the USPS would have been profitable over the past four years and it would have significant borrowing authority to ride out the bad economy. It would not have had to file for bankruptcy.

In fact, no private company in America is required to pre-fund future retiree health benefits, either by law or private-sector accounting standards. The $47 billion the Postal Service has deposited into its retiree health fund over the past four years would have been available for operating costs. And those companies that voluntarily do pre-fund would never have adopted a crushing schedule to pre-fund 80 percent of future retiree health costs in just 10 years. Nor would they mindlessly stick to such an onerous schedule in the middle of the worst recession in 80 years.

Congress, aided and abetted by the Office of Personnel Management and the General Accountability Office, mandated the destructive pre-funding policy in 2006. The common-sense solution is obvious: Let the Postal Service use the massive surpluses in its pension plans, found by two independent audits, to cover the cost of pre-funding. Indeed, 181 members of the House—from both parties—have co-sponsored legislation to adopt this solution (H.R. 1351. But thanks to the dysfunctional nature of Congress, the bureaucratic blindness of OPM and the Office of Management and Budget, and the single-minded stubbornness of the Congressional Budget Office, which “scores” any change in the pre-funding provisions as increasing the deficit even though no taxpayer funds are involved, the Postal Service now faces a financial crisis in September when the next $5.5 billion payment is due.

Don’t believe the “Big Lie.” The Postal Service is not going bankrupt. Rather, Washington politics is killing it.

7 thoughts on “The ‘Big Lie’ about postal ‘bankruptcy’

  1. I love when the Republicans, Socialists, and online griefers say things like, “The gravy train is over.” OMG! My precious ‘working middle class’ wage is done for. I guess i won’t be buying this year’s Ferrari. I’ll keep last year’s around a little longer. I can’t believe most things people say on these forums when i bother to read them, anyway. If people who say that are the ‘minimum wage types and we hate middle class people’ then wth are they doing online? Posting on post office articles, no less? Got enuff dough to pay for the internet access, it seems, and plenty of time on your hands to look at boring stuff like this. If you gov’t haters were ‘real working class’ you wouldn’t even be online and you’d be happily slaving away at every hour you could get your hands on for your overpaid corporate masters.

  2. Yeah, I guess the Post Office will be the sacrificial lamb in the Fed. gov’t. spending cuts. Its’ a poor attempt to show the public that they’re trying reign in spending, even though we are self funded. Maybe they like to take all that supposedly unneeded and overfunded pension and healthcare fund. I don’t think top salaried postal workers who make between 50k and 60k, and who pay on average for family health plan with dental $200 per pay period, are not the problem. There too many supervisiors, and middle management, making a whole lot more and are virtually getting paid to nothing, while carriers and mailhandlers are working short staffed. What about Federal workers and the politicians, whose hefty salries and benefits are paid in full by the tax payers? At least as postal workers our benefits come from post office revenue. Oh yeah, maybe Postmaster should stop giving out bonuses to management, especially since their the ones that got us in this mess.


  4. The requirement to drastically overfund health and annuities for future postal retirees is a deliberate attempt to sabotage the USPS and turn it over to the private sector.Our congress people are looking at all that overfunded money, and want to use it for their purposes. USPS probably knew what they were going to do when they negotiated the most recent contracts with APWU and NALC. Congress is only going after postal workers, not federal workers. Who will support us against this tactic?
    The citizens won’t care nor those in Federal Service. Congress and President Obama will count this as creating private sector jobs. Never mind that up to 220,000 postal employees will lose their jobs.Don’t look for any help from Pres. Obama. He is not going to stick his neck out to save Postal Union jobs.. Think Wisconsin!

  5. Looks like a perfect storm is brewing for postal employees.
    Postal unions have little clout these days in congress, despite large money contributions to candidates. Incredibly, NALC actually gave Issa $10K of union funds before the last election.
    Anti-union fervor is at a fever pitch and republicans in congress hate government workers.
    The math seems simple. The gravy train is over.

  6. So true- and try to get one non-Postal employee or Congressman to understand it. BUSH MANDATED THIS CRAP IN 2006, WHERE IS OBAMA TO REPEAL IT???? This prez makes Jimmy Carter look like Charles Atlas. DO SOMETHING!

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