Ross calls all USPS overpayments “myths” (including the one OPM says is real…)

Freshman Congressman Dennis Ross, the chairman of the subcommittee that oversees the US Postal Service, posted this analysis of what he calls “myths” about the USPS financial crisis:


Postal Service “Overpayment” – Myth v. Fact

Washington, Jun 24 –

Myth: The Postal Service has overpaid by $50-$75 billion into the Civil Service Retirement System and Congress owes this money back.

Fact: There is no Postal Service overpayment. In 1974, the Postal Service agreed to a formula to share the retiree costs of individuals who worked for both the Post Office Department and the Postal Service (which replaced the Department in 1971). Now, more than 40 years later, the Postal Service argues that that formula is unfair. The Postal Service argues that if a formula it considers to be fair had been used instead, than it would be owed $50-$75 billion by the US Treasury. This is an attempt to rewrite history. The original formula was instituted as part of a broader set of decisions concerning the creation of USPS. For instance, those decisions included not charging any fee to USPS in return for the postal monopoly it was granted. Another reason why it makes little sense to speak of an overpayment due to USPS is that the Postal Service had a clear requirement from 1971 until 2006 to raise postage rates to cover all costs, including its cost of retirement funding. If a different formula had been used all these years that had resulted in lower annual payments by USPS for its federal employee retirement costs, those savings would have been used to lower the cost of postage rates.

Myth: The Postal Service is unfairly saddled with an annual $5.5 billion retiree health care prefunding payment that is required of no other federal agency. If only the prefunding requirement were eliminated the Postal Service would be profitable again.

Fact: If the Postal Service were allowed to immediately cease prefunding of its retiree health care obligations, it would have an unfunded liability of nearly $100 billion by 2017. This would clearly be an unaffordable burden for an entity whose core business and revenue is steadily shrinking. It would likely result in a taxpayer funded bailout of postal workers’ retiree health care payments. USPS is under its statutory prefunding requirement because – although it was created to be a self-sustaining entity – taxpayers stand behind the large and growing retiree health care liability. Its also important to note that the annual deficit of the Postal Service now easily exceeds its entire annual prefunding payment, illustrating its fiscal problems run much deeper.

Myth: The Postal Service has a FERS surplus of $6.9 billion that should be immediately returned.

Fact: The Postal Service, in addition to a number of other federal agencies, has a temporary, projected surplus because interest rates have been at historically low rates. Once interest rates inevitably begin to rise, that projected surplus may melt away leaving the Postal Service with a deficit it can ill afford to pay back. Other federal agencies with temporary surpluses are not being granted refunds for “overpayments” as a result of these fluctuating balances.

Also today, Ross posted a link to the OPM Inspector General’s report on USPS finances on his Facebook page, along with this comment : “If anyone wants to read the reality of what the Postal Unions/USPS plans for the postal service would do to the taxpayer, just read the executive summary.” Curiously, the OPM IG’s report contradicts Ross’s third “myth”. In the executive summary that Ross says reflects “reality”, the IG’s office says it agrees with the USPS’s contention that either the FERS overpayment should be refunded to the agency, or that it be excused from making further payments until the excess is exhausted.

It should also be noted of course, that OPM is hardly an impartial observer here- every dollar of USPS pension overcharges is a dollar OPM doesn’t have to ask Congress to appropriate for the pensions of other federal employees. A further irony is that it was OPM, not the USPS, that uncovered the original CSRS overcharges (that are not in dispute) that Senator Susan Collins transformed into the “future retiree health benefits trust fund” in the 2006 PAEA law. The urgency of prefunding health benefits only came to light when it was discovered how much money the USPS had been overcharged, and the thought of having to give that money back provided a powerful incentive for Congress to come up with some rationale for keeping the money. That isn’t a myth- it’s reality.

The separate question of whether the USPS was overcharged for CSRS pensions by $50-75 billion over the course of its existence is open to debate. Even if it was overcharged, the question of who would actually be owed a refund is tricky- the mailers who paid the lion’s share of overcharges aren’t the same people who would benefit from lower postal rates today. But it seems clear that the mailing industry paid for more than its fair share of federal employees’ pensions over the years, relieving some of the burden that would have fallen on taxpayers. That industry, and the seven million people who depend on it for their livelihoods, deserve some consideration. Crippling the postal service will not help them, or the US economy.

  • Andre
  • Moondawg

    Dennis the Menace, is so misguided!! He is truly sad..

  • Larry

    another republican piece of crap. wake up people and vote democrat or loss your future

  • bubba

    on the count of 3 everyone say ross and issa are the biggest losers(but count slow ross and issa aren’t very quick)ok here we go 1.2.3 ROSS AND ISSA ARE THE BIGGEST LOSERS!!!!!GOOD JOB GUYS!!!!

  • bubba

    what does ross stand for=R=REPORTING,O=ONLY,S=STUPID,S=STUFF!!!!!!!!!!!!ROSS YOU NEED TO FIND ANOTHER JOB ,YOUR JOB IS TO GET THE USPS OUT OF DEBT YOUR SO LAZY ALL YOU WANT TO DO IS REPORT CRAP SO YOU CAN MAKE A NAME FOR YOURSELF!!!!DO YOUR JOB YOU IDIOT!!!!!!!

  • bubba

    YESTERDAY AT WORK WHILE TAKING HIS MORNING NAP AT THE STUPIDVISOR DESK OUR 204-B WOKE UP SCREAMING WE ASKED WHATS WRONG LITTE 204-B BUDDY HE SAID HE HAD A NIGHTMARE THAT HE WAS DUMBER THAN ROSS AND ISSA WE SAID NO YOUR NOT DUMBER LITTLE 204-B BUDDY YOUR JUST AS DUMB AS THEM HE SMILED AND WENT BACK TO SLEEP

  • postmaster

    Sure he’s going to come up with a reason to keep the money for him and all his crooked cronies have already spent the money stolen. Just like they were justified in going in and taking all 189 billion dollars of our retirement money to keep the government afloat. If we did something like that we would all be in jail just like Bernie Madoff

  • Mike

    Its about time Ross gave us his reasoning, however flawed it may be.

  • So there!

    bubba, the 204-B probably woke up because you were probably kissing his behind. Idiots like you think what you say is intelligent, but it just gives everyone the impression that all Postal Workers (including you!) are lazy and stupid. Grow up!

  • Fed up with the FED

    Why is it that the USPS was the only government entity to have to use this so called Formula to pay into the retirement fund? Also why is it that the USPS and OPM were aware that this so called formula was covering other Federal retirement groups if in fact it was not an overpayment?? Obviously there is more to this than meets the eye and I must say.. This reeks of POLITICS more than assistance to an old arm of government. The facts are skewered and obviously something is being covered up here. The OIG reports for years and I have read them all spoke of overpayments and reimbursements. I have also seen the formula.. specifically there is no possible way the stamp increases till today would even make a dent in what was given out and certainly what will be given out in the future.. This is just another excuse for this subcommitee to further their republican agenda of pushing around the USPS and their unionized workers.. dont think there wont be a fight with the unions on this because we are talking walk out right now as we speak.

  • Fed up with the FED

    Why is it that the USPS was the only government entity to have to use this so called Formula to pay into the retirement fund? Also why is it that the USPS and OPM were aware that this so called formula was covering other Federal retirement groups if in fact it was not an overpayment?? Obviously there is more to this than meets the eye and I must say.. This reeks of POLITICS more than assistance to an old arm of government. The facts are skewered and obviously something is being covered up here. The OIG reports for years and I have read them all spoke of overpayments and reimbursements. I have also seen the formula.. specifically there is no possible way the stamp increases till today would even make a dent in what was given out and certainly what will be given out in the future.. This is just another excuse for this subcommitee to further their republican agenda of pushing around the USPS and their unionized workers.. dont think there wont be a fight with the unions on this because we are talking walk out right now as we speak.

    Obviously they want to work on breaking a unionized workforce 2nd to none in our country. It is like a feather in their repub caps.. they have no need to assist the USPS nor will they. THE USPS going to them crying like babies needing a bottle and then asking for 20 bottles gave this commitee a good laugh and an excuse to bring down controls, regulations and laws.. not only for the USPS but for all of it’s workers.. we are talking collective bargaining being brought down publically and they will show our country exactly how it is done.

  • james

    mr Ross do not need to know anything about the postal service his goal is to weaken the unions and help make thepostal service fail so that private companies can take over a trillion dollar business.he gets his marching orders from those who put money in his swiss bank account.

  • Marcus

    USPS is funding other Feds retirements!!!!!!!!!!!!!!!!

  • Gregg

    More foolishness from Mr.Ross.He was like 7 years old when I started at the Post Office.Now,he’s acting like a 2 year old!!Please Mr.Ross,consider all the current USPS employees who have worked very hard through the good times and the bad times.We have done our jobs,no matter what.We have put up with all the uncertaintys.We have endured the sometime foolish management.And I’m sure we will have to deal with alot more of this in the future.Just think about the Postal Worker in general,Mr.Ross.

  • Graywolf

    Any monies that have been overpaid is surely gone! My question is why, if the Democrats are our “friends” did they not fix our financial problems in the first two years of this administration, when they could “run the table” unopposed? Oh, and why did that democrat Henry Waxman insert that provision into the PAEA?

  • BigAntG

    Ross is a Freshman who is flunking out.

  • Sandy

    If all the Postal employee’s are posting all this BS on the comments of each article it’s no wonder the folks in Washington don’t have an idea whats going on. I worked every clerk/carrier position in the service, then on to management. The 500,000 plus people that work for the Postal Service ARE the Postal Service. There are good one’s and bad one’s at both the top and bottom. To help
    get things moving start calling YOUR congressman and let
    them know the important work done by Postal Employee’s.
    And the impact of not having the Post Office will have on
    everyone in this country. The Post Office provided me with an income to support my family, put 3 kids thru college. Now I receive a nice retirement check each month, sure it could be more. But just as when I worked
    I live on what I make. Please think about the impact of what you put down in the comments.

  • MaxHeadroom

    Gee…how many people are still alive today that worked for the Post Office Department? That is nothing more than a red herring!

  • Bob

    They are afraid of losing there cash cow

  • Terry

    Regardless of the internal issues that everyone has felt from time to time, the employees of the USPS must stay focused on the “Big Picture” or there will be no future for workers, supervisors, or senior management. The issues that everyone must keep hammering their congressional delegation with (especially Congressman Ross) are the following:

    1. Overfunded pensions since 1971- $50-$75 Billion Dollars. (Congress involved)

    2. New prefunding of retirements already overfunded since 2006- Somewhere between $3-6 Billion a year. (Congressional mandate)

    3. Payment by the USPS for the Congressionally mandated Office of the Inspector General since 1996. To make it look more independent, Congress within the last two years has charged the USPS once a year for the annual OIG budget costs.

    4. SOX mandate 2006- Courts or Congress/UPS/Fed X?? Not a requirement for a non SEC organization that already had a tighter financial program before SOX.

    These are the big issues causing the monetary scare that we see today. Take away just item #2 and for the last three years for sure the USPS has made money. Again, we have cut many positions, made the public wait in lines, taken away the manual Consumer Service Cards creating a System only taking complaints from computers or telephones thus making it harder for all citizens to have equal appeal/complaint access. Rates have gone up on John Q Public, and Congress uses the USPS as a cash cow for whatever endeavers it chooses. The mail and the “Sanctity of that Mail” is the last binding tie that actually holds together our freedom as a Nation. Stay focused people, put full effort on the issues that are jeopardizing the USPS as a whole, and work daily to push for improvement within.

  • paul

    This Fact vs Myth is just another way of Ross saying “we’ve already spent that money and if were forced to pay it back, we will be unable to”. Fact: usps is the most trusted government agency. Fact: Politicians are not trusted.

  • RustyCannon

    This is the problem with electing teabaggers to congress. This guy Ross has ignored all the facts presented to him in testimony before his committee, such as the congressional prefunding mandates contained in the “Postal Accountability and Enhancement Act of 2006” and is simply leading a new battle front against organized labor based on fiction and ideology. Once again, Florida voters have failed the nation.

    We must elect progressives to congress and get this chairmanship back from this RWNJ.