Deficits and the Post Office

There is ongoing faux concern over the finances of the Post Office–it is running deficits because the Congress has passed ludicrous pre-funding retirement requirements (no private business could meet these requirements). But it’s worth remembering that the U.S. government actually owes the USPS money–fifty to seventy billion dollars (boldface mine):

Due to an unfair allocation methodology, the Postal Service has overpaid the CSRS by $50 to $75 billion. If a benchmark of 80 percent were used to measure the health of the two pension funds, the Postal Service has overpaid by another $50 billion. If the RHBF liability were put in perspective, there is more than enough in the fund right now to justify suspending the $5.5 billion payments.

That adds up to simply this. The Postal Service is not faced with retirement liabilities that it cannot meet. There is no taxpayer bailout on the horizon. Quite the opposite.

These overpayments amount to unnecessary transfers of billions of dollars from the Postal Service to the U.S. Treasury. As PRC Chairman Ruth Goldway put it so succinctly last September, “The Postal Service has been a kind of cash cow for the federal government for the last 40 years.”

Issa’s taxpayer-funded website has things backwards. It’s not that taxpayers may need to bail out the Postal Service. Rather, the Postal Service, its workers, and its ratepayers have been bailing out the government for decades. Now postal employees and customers are being repaid — with cuts to the workforce and cuts to service.

Congregation: This is yet another reason why we can’t have nice things.

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