The Big Lie about postal ‘bankruptcy’

From National Association of Letter Carriers President Fred Rolando:

Yesterday, in a mandatory stand-up talk, Postal Service management all across the country told letter carriers:

“If we were a private company, we would have already filed for bankruptcy and gone through restructuring—much like major automakers did two years ago.”

The Service repeated this claim in a press release distributed to the nation’s news media as well.

Of course, it’s not true. But the USPS seems to think that if it repeats this “Big Lie” often enough, most people—and especially members of Congress—will think it’s true.

So, let’s set the record straight: If the Postal Service were a private company, it would not have to file for bankruptcy because it would not be subject to a USPS-specific congressional mandate to pre-fund future retiree health benefits. As it is, it is the only federal agency required to do so: It must pre-fund these benefits some 75 years into the future on a massively accelerated schedule.

This postal-only mandate, which costs the USPS $5.5 billion per year, accounts for 100 percent of the Postal Service’s $20 billion in losses over the past four years. It also accounts for 100 percent of the rise in the Postal Service’s debt in recent years. Without the mandate, the USPS would have been profitable over the past four years and it would have significant borrowing authority to ride out the bad economy. It would not have had to file for bankruptcy.

In fact, no private company in America is required to pre-fund future retiree health benefits, either by law or private-sector accounting standards. The $47 billion the Postal Service has deposited into its retiree health fund over the past four years would have been available for operating costs. And those companies that voluntarily do pre-fund would never have adopted a crushing schedule to pre-fund 80 percent of future retiree health costs in just 10 years. Nor would they mindlessly stick to such an onerous schedule in the middle of the worst recession in 80 years.

Congress, aided and abetted by the Office of Personnel Management and the General Accountability Office, mandated the destructive pre-funding policy in 2006. The common-sense solution is obvious: Let the Postal Service use the massive surpluses in its pension plans, found by two independent audits, to cover the cost of pre-funding. Indeed, 181 members of the House—from both parties—have co-sponsored legislation to adopt this solution (H.R. 1351). But thanks to the dysfunctional nature of Congress, the bureaucratic blindness of OPM and the Office of Management and Budget, and the single-minded stubbornness of the Congressional Budget Office, which “scores” any change in the pre-funding provisions as increasing the deficit even though no taxpayer funds are involved, the Postal Service now faces a financial crisis in September when the next $5.5 billion payment is due.

Don’t believe the “Big Lie.” The Postal Service is not going bankrupt. Rather, Washington politics is killing it.

via Latest News | The ‘Big Lie’ about postal ‘bankruptcy’.

  • City Carrier

    Hmmmm, seems like Issa is up Donahoes ***!

  • Vicki SD

    “The Postal Service is not going bankrupt. Rather, Washington politics is killing it.” More like, the Government has spent it and it’s not there to give back to the USPS.

  • georg berthiaume

    usps saved 1billon dollars ayear closing 7 districts close 35 more districts and save 5 billion ayear wewould then have same number of districts as ups

  • ZACK

    Looks like APWU President Cliff Guffy got “PLAYED”!
    So the only question now is – will NALC & MH unions buy into the same dooms day fear tactics that Cliff did, and settle for a piece of crap contract that the USPS doesn’t intend to honor?

  • steve

    People still bashing Cliff. What a bunch of D-bags you are. This crap is real and we are all on the brink of losing our jobs. How about focusing this bull sh– negative energy where its actully needed. Letting the whole country know what is going on. Telling them, (everyone) the truth about everything. These little blogs might get read by what, maybe a percent of a percent of people. We need to get the truth out to all America.

  • Proud Product of the USA

    Hey Cliff Guffy bargained in good faith….The USPS did not. Everyone needs to do their part and get the message to their representatives and the american people. A union is only as strong as the membership. President Guffy is only a part of it. He is doing his part. Are you doing yours?