It’s gotten to the point that even the New York Times has bought in to the line that the US Postal Service is about to go under due to declining mail volumes and overly generous wages and benefits for its employees. This morning’s Times trumpets “Postal Service Is Nearing Default as Losses Mount“.
The Times mentions the true cause of the USPS’s money problems only in passing:
Missing the $5.5 billion payment due on Sept. 30, intended to finance retirees’ future health care, won’t cause immediate disaster.
The Times fails to explain that the $5.5 billion payment is not a normal, actuarially valid estimate of future retiree’s health benefits. It is a politically calculated number, equal to the amount the USPS was found to be overpaying its annual pension liabilities in 2003. The trust fund simply serves to keep postal funds flowing into the Treasury, artificially reducing the federal deficit.
The most glaring omission in the Times story is the fact that as of the end of the 2010 fiscal year, the USPS had amassed a total of $42.5 billion in the so-called “trust fund”. (See page 77 of the USPS Annual Report). The fact that the Times ignores this huge pile of cash, while parroting the cliche “The United States Postal Service has long lived on the financial edge” just shows how successful right wing politicians and the USPS leadership have been in shaping the perception of the USPS as a financial basket case, requiring draconian measures to “save” it. (Note: the $42.5 billion is in addition to the $50-75 billion the USPS is estimated to have overpaid the Civil Service retirement fund since 1972. While there are differing opinions on that overcharge, the $42.5 billion in the trust fund is not in dispute).
The simple, undisputed fact is that without Congress’s prefunding requirement, the USPS would have zero debt, billions in spare cash, and a $15 billion line of credit. But when your goal is to shut down post offices, get rid of unions, and slash wages and benefits, you need a better story. The politicians have managed to come up with that story, and so far, the news media have swallowed it whole.