For years, I’ve been writing about how both political parties–bipartisanship!–saddled the U.S. Postal Service with a massive retirement financing burden. Essentially, USPS had to generate 75 years worth of retirement funds over a ten year period, and when it was (obviously) unable to do so, it was accused of ‘losing billions of dollars every year.’ Well, both parties have finally decided the Postal Service is worth saving (boldface mine):
The House of Representatives voted Feb. 5 to remove a mandate that the U.S. Postal Service prefund its retiree healthcare, a requirement that has been responsible for significant financial losses at the agency.
“This mandate has cost the postal service billions of dollars since it was first imposed 14 years ago. The Postal Service has not made a payment into this fund since 2012,” Rep. Carolyn Maloney, D-N.Y., said on the House floor.
“Without major structural reforms, the Postal Service will run out of cash in about four years. At that point, it will not be able to pay its own workers and mail delivery would simply cease.”
USPS has reported consistent losses in recent years, most recently a net loss of $8.8 billion for fiscal year 2019. Much of those losses can be attributed to the defaulting on prefunding payments, which amount to about $5 billion per year.
The mandate to prefund retiree health insurance was put in place by Congress in 2006 and is a requirement that has been placed on no other federal agency.
I guess this is good, but it feels more like when your car breaks down, and you finally are able to get it fixed. Returning to a status of ‘not bad’–and in this case, it was self-inflicted–doesn’t feel like a cause for celebration. Still good news though.