The Postal Service, Victim of the Long Con of Congress

The United States Postal Service has long been the black sheep of the federal government.  They were designed to operate autonomously, yet their ability to do so has always been at the behest of Congress.  Now the USPS is teetering towards bankruptcy, and they need to curb costs.  They don't want to have to cut services, but Congress is pushing hard to eliminate door-door service altogether, and will vote on it Wednesday.  I don't have a problem with that. Door-to-door service is expensive, from an hourly wage standpoint - curbside and cluster boxes are the efficient way to go.  But this move will cost a lot of mail carriers their jobs.  I have a couple of friends that do that very job, so I am now concerned for their job security, as the job market is tough, and has been for several years now.

But setting aside my personal feelings, I will now fill you in on something very few people even know about (I didn't know about it until one of my USPS friends filled me in):

In 2006, Congress passed the Postal Accountability Enhancement Act, or PAEA.  This act mandated forced the USPS to PRE-fund a 75-year liability for future retiree health benefits.  That's right, folks.  At 75 years, they are not just funding future retirees' benefits - they are funding people who will not have even been born for the next 10-15 years.  What's worse, current employees pay for their own health benefits.  So do retirees, minus whatever Medicare covers.  So there is no such thing as a "health care benefit" for current employees or retirees.  And pre-funding anything means employees have to pay out more from their paychecks.  So this mandate basically amounts to an agency-wide pay cut to fund something they have no access to.  And this is all paid into the Federal Employees Retirement System (FERS), which means - you guessed it - they are funding all federal employees from every other agency, who will have access to these benefits, while the people paying for it have no access.  And they are the only employees in the country that have been required to do this.

This pre-funding amounts to roughly $5 billion per year, and it accounts for about 70 percent of the USPS' net deficit for the last five years (through FY 2012).  Keep in mind, this is the only federal agency that generates a revenue stream, while consuming exactly zero tax payer dollars.  Postage and package delivery services, as well as postal merchandise products, are their revenue stream.  Many people, including much of Congress, have seriously discussed privatizing the USPS, portraying it to be an expensive, unprofitable relic of times gone by - a dinosaur, that needs to be out of the federal system.  But while mail service has decreased about 25 percent since 2006, when the PAEA was enacted, the biggest improvement in revenues in recent years has been from becoming more competitive in package delivery services.  So one has to wonder why the entirety of the USPS is being deemed  an unprofitable relic that needs to be shut down.  After all, if this kind of service is so unprofitable, why are so many of our congressmen so heavily invested in UPS, FedEx, and DHL?  Wait a minute...

And here is where I start to twitch:  The USPS fund in the FERS had about $46 billion total.  Just recently, the Treasury Department took money yet again from the FERS - and included the USPS fund - to pay down debt.  So the USPS is near bankruptcy, yet they can be pilfered by the Treasury Department?  And, naturally, the loss of those funds changes weakens the financial position of the USPS, making them look less fiscally stable than they already are.  All this, and Congress wants to get rid of the USPS, or privatize it, when they are the biggest reason the USPS is in the position they are.  And Congress has repeatedly refused to return the surplus payments to the USPS - meanwhile the agency has had to close thousands of post offices, mail sorting facilities, lower service standards, and delay mail delivery, including eliminating Saturday delivery beginning in August of this year.  

Only our government would force an agency it deems "failing" to over pay into a system it has no access to, while simulatneously strategizing the best way to get rid of the agency.  I wonder what happens to all the pre-funded payments into the FERS for "future federal employees," who won't ever exist once the federal agency is dissolved...?