The pending Aug. 1 “default” of the U.S. Postal Service is not primarily the result of a bad market or even bad operations, but of bad legislating by Congress, according to Fredric Rolando, president, National Association of Letter Carriers. The only thing that will happen on Wednesday is that the Postal Service will not pay $5.6 billion into a fund for future retiree health benefits—a fund that already has $45 billion, enough to pay for decades of future retiree health care, Rolando says.
“At the National Association of Letter Carriers (NALC), our two highest priorities are ensuring the long-term health of the Postal Service and protecting the well being of our country’s active and retired letter carriers. If we thought our retired members were in danger of losing their health care, we’d be screaming bloody murder about it. But the retirees are fine and so is their health insurance. And on August 1st, the mail will continue to be delivered and employees will continue to be paid,” he notes
“No other U.S. institution—private or government—is required by law to set aside money for future retiree health benefits. But in 2006, Congress imposed this requirement on the Postal Service, and the resulting annual payments are the reason the Postal Service’s financial problems, while very real, appear to be so much worse than they actually are. In fact, according to USPS financial statements, pre-funding accounts for 94 percent of the red ink in the first two quarters of fiscal 2012 and 85 percent of all red ink since pre-funding went into effect in 2007.
“Still, this bogus “default” has proved to be useful rhetoric to those who want to dismantle the Postal Service, especially those who for ideological or competitive reasons want it privatized. But we should all remember: the Postal Service doesn’t use any taxpayer money.
“As we have said before, the Postal Service does have very real challenges to address as the volume of first class mail declines and Americans rely more and more on the Internet to convey personal and business messages. On the other hand, there is real opportunity as an increasing number of products purchased online are shipped through the Postal Service,” Rolando continues.