We're all aware of the underfunding of retirement benefits for public sector workers, and for Social Security and Medicare recipients as well. But what about the postal service workers?
Well, our government knows best politicians have a temporary solution for postal employees, it seems. Just don't put any money into funding the shortfall. Pretend it's not necessary and let them use the cash instead to partially offset daily losses in post office operations.
Put it on the future taxpayers's tab, in other words.
Post Office Might Miss Retirees' Payment has the updated story:
"While lawmakers continue to fight over how to fix the ailing U.S. Postal
Service, the agency's money problems are only growing worse.
The Postal Service repeated on Wednesday that without congressional action,
it will default—a first in its long history, a spokesman said—on a legally
required annual $5.5 billion payment, due Aug. 1, into a health-benefits fund
for future retirees. Action in Congress isn't likely, as the House prepares to
leave for its August recess.
The agency said a default on the payment, for 2011, wouldn't directly affect
service or its ability to pay employees and suppliers. But "these ongoing
liquidity issues unnecessarily undermine confidence in the viability of the
Postal Service among our customers," said spokesman David Partenheimer.
The agency says it will default on its 2012 retiree health payment as
well—also roughly $5.5 billion, due Sept. 30—if there is no legislative action
Most everyone agrees the Postal Service needs an overhaul. It had a loss of
$3.2 billion in the second quarter of this fiscal year; it is to report
third-quarter results on Aug. 9. The agency blames factors including declining
mail volumes and the unusual 2006 mandate by Congress that it annually set aside
billions for future retirees. But while the Senate has passed legislation to
overhaul the agency, the House says it doesn't expect to take up its own
proposal until after August.
The two sides remain far apart. Senators voted in April, on a bipartisan
basis, for legislation that largely shores up the agency's finances by returning
an estimated $10.9 billion overpayment made into the federal employee pension
system. The legislation limits the agency's ability to close postal branches and
stop Saturday delivery.
Republican House leaders support legislation they say would require the
agency to operate more like a business, in part by setting up a panel to reduce
the network of post offices. Some rural-district House members, from both
parties, have been worried about closures in their areas."
Politics as usual. Senators want to ignore retirement funding requirements. Instead they'll use that money to offset losses in daily postal operations. They need to get their hands on those pre-funded billions of dollars since postal operations are already losing other billions BEFORE considering retirement funding needs and future payments. And they don't want to raise taxes right now---it's an election year.
Yes, that's right. The post office is a loser even without making provisions for future benefit promises. And it has been for a long time. Yet our public servants don't do anything about it.
Politicians refuse to cut costs and make a serious effort to get the postal service to break even on an operating basis only. To do that they'd have to close facilities and reduce lots of jobs. They would also have to curtail services to households and individuals. They also refuse to admit defeat and wind down loss making postal operations, letting the private sector fill the void.
This is a perfect example of free lunch syndrome. We the People like what the post office delivers, but we don't want to pay for it. As a private company, the post office wouldn't survive without wholesale, dramatic and immediate remedial action. And even then it probably would enter bankruptcy and eventually close its doors. Technology has evolved the past two hundred years. The postal operations haven't kept pace, to say the least.
So the preferred political solution is as always--- add it to the taxpayers' future bill, use accounting gimmicks and tricks and put off doing today what "can wait" until after the next election.
But remember this--- there's always a "next election."