Could this really happen -- the end of the Postal Service as we know it?
If Congress does not pass legislation that would save the Postal Service from financial collapse before the end of its current session, the future of the country’s mail service will be in the hands of a senator who opposes government unions and thinks the Postal Service should be privatized.
In January, Sen. Ron Johnson (R-WI) is slated to take over as chairman of the Senate Homeland Security and Governmental Affairs Committee, which oversees the federal workforce and the entire Postal Service. Johnson has said that the Postal Service should go through a bankruptcy process that would result in a downsized, private corporation that would lose the benefits of governmental oversight and regulation. It could also allow the revised entity to terminate or substantially modify its contracts, including its collective bargaining agreements with various postal unions.
This little gasp of horror at the unthinkable is from Think Progress -- this must be my day for peeking in on the lefties. Actually I think it would be a good thing for Congressz and the post office people to undergo a little reality check by facing the facts about how competition and the digital revolution have upended them. A downsized operation with a different mission, privatized and free from government oversight and regulation? Hallelujah, bring it on.
Yeah, I know, probably wishful thinking on my part. Bloated bureucracies supported by the federal government do not go away.
Comments
But what has been lost in the political debate over the Post Office is why it is losing this money. Major media coverage points to email or Internet services and the inefficiency of the post model as the major culprits. While these factors may cause some fiscal pain, almost all of the postal service’s losses over the last four years can be traced back to a single, artificial restriction forced onto the Post Office by the Republican-led Congress in 2006.
At the very end of that year, Congress passed the Postal Accountability and Enhancement Act of 2006 (PAEA). Under PAEA, USPS was forced to “prefund its future health care benefit payments to retirees for the next 75 years in an astonishing ten-year time span” — meaning that it had to put aside billions of dollars to pay for the health benefits of employees it hasn’t even hired yet, something “that no other government or private corporation is required to do.”
As consumer advocate Ralph Nader noted, if PAEA was never enacted, USPS would actually be facing a $1.5 billion surplus today:
By June 2011, the USPS saw a total net deficit of $19.5 billion, $12.7 billion of which was borrowed money from Treasury (leaving just $2.3 billion left until the USPS hits its statutory borrowing limit of $15 billion). This $19.5 billion deficit almost exactly matches the $20.95 billion the USPS made in prepayments to the fund for future retiree health care benefits by June 2011. If the prepayments required under PAEA were never enacted into law, the USPS would not have a net deficiency of nearly $20 billion, but instead be in the black by at least $1.5 billion.
This is simply GOP dogma to:
1. Destroy unions
2. prove government is always bad and inept
3. Privatize everything so well connected cronies can start a business and profit.
Leo forgets the Post Office was never intended to be a business but rather a government service. The Republican's in congress created the problem by mandating the postal service deliver to areas no private for profit company would go, while capping what can be charged for the services and making the Postal service prefund pensions 75 years ahead for workers no even born yet. Maybe Darrell Issa would make GM or FedEx or UPS do the same.
H.R. 6407 Postal Accountability and Enhancement Act
T0 add to Joe's comments.
The last defined amount to be put into this account is 5.8 billion on September 30, 2016.
On September 30, 2017 "and of each succeeding year" afterwards is basically to be announced.
I suppose the Republicans could be accused of trying to destroy the Postal Service. But it probably had more to do with keeping down the waste of resources. You know, fat reduction. This was passed before the ACA and before the housing market destroyed the economy.
Sorry, I left some other local info out. If Congress does nothing, the USPS will act on its own to survive.
In the last couple of years there has been serious talk about either closing the distribution center here in Fort Wayne or the one in South Bend. As it stands today, South Bend will be moving their mail processing to the Fort Wayne plant early next year. You may know how close we came to losing to South Bend.
What would have this meant to you if our distribution went to South Bend? Your mail, even to your neighbor if not caught, would go to South Bend first to be processed.
That mail from those long lines on April 15th would also.
I'm very far from being an expert on the situation, but I've been employeed at the Fort Wayne plant for 27 years.