New York Times buys in to the postal shell game

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.

  • Linda

    Look, mail volume is falling
    like a rock. It will continue
    that trend. That is the real

  • Alan Robinson

    There are other glaring problems with the article. Comparing the % of costs that are labor is a canard. The idea that the USPS would shut down next year was denied by the CFO on August 17 among others.

  • HMMMmmm…

    Mail volume may have fallen off since it’s highest point, but has not deminished at the rate indicated. Why not do an average decline based on a 10 or 20 year range instead of useing just a single years high? I work in a facility and we process just as much mail now with 2/3’s less employees as we did in 2005. The problems start with the unrealistic graphs and charts that the management use to scare people with.

    Do some indepth research before condeming the Postal Service. The first thing that is done in a company that is trying to make drastic changes is to show that the current plan has failed.

    Congress needs to pull there hand out of the USPS pants pocket and quit spending on there personal pet projects for self gain in the private sector. Right Mr. Issa!

  • Rich

    The sky is falling…the sky is falling…

  • John Miller

    I have several comments but not enough time to write them all. I’ll start and end with Linda’s short-sighted contribution. One problem with posting comments on a site like this is that ANYbody can post one. No need exists to be informed OR accurate. As a 30 year veteran of the USPS, I can tell you that the decline in mail volume is only one piece of the pie. However, as this article aptly points out, CONGRESS is holding on to dollars numbering in the billions that not only belong to the USPS but never should have gotten into the Federal coffer. The LARGEST piece of the pie is being consumed by CONGRESS. The question is, “How did OPM let these overpayments happen?” Congress can’t balance the Federal budget but without the Postal funds they are using, the budget would reflect the TRUE numbers which CONGRESS does not want to show.

  • Lexus 21

    The ones who do the least will cry the most when we go down for good. Step up and do your job ! Be part of the solution not the problem.

  • Duane

    Who in Congress received this money and where did it all go? Sounds like another of the politician’s slush funds! Maybe we need another independent prosecutor to find this money! How do you lose this much money without a trace? Politicians and money are like gasoline and automobiles!

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  • idiotland

    Reality and facts be damned. That’s the neocon way, right?

  • idiotland

    What else does anybody expect from a paper and media which trumpeted the Iraq war because we were at imminent threat by Saddam. The U.S media is now the ministry of propaganda.

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  • marilyn

    OMG! Really are there that many of you that don’t know whats going on? EVERYBODY needs to get on board and WRITE THEIR REPRESENTATIVES! DON’T WAIT TIL LATER DO IT NOW! Go to e_Activist and find out more.

  • my 2 cents

    >Hmmmm/John MIller: I’m with you. Issa wants to destroy the USPS- and the “Old Grey Lady” (NY Times) is known to stop short of telling the entire story!! 90% of Postal employees are dedicated – every org. has a few rotten apples. Postal Mgrs. are appointed to do a job, then micromanaged and harrassed/threatened. USPS touches each citizen. Can the bailed – out banks and automobile mfgers say that?

  • boss hogg

    the sh*t is fixing to hit the fan.

  • Ed

    Follow the money folks. The USPS made over $60 BILLION last year and no one profitted from it. Private industry will do whatever it can to carve out some of that for their own profit.
    Issa has taken advantage of an uneducated public to try to frame this as a bailout, hence garnering support because of the negative connotation alone. You can bet he has a good stake in any company figuing to profit from a privatized USPS.
    USPS has even positioned itself for partial privatization by segmenting it’s Market Dominant Products ( letters, which no one wants) and Competitive Products. ( packages, which everyone wants)
    Eventually, Issa will try to “help” the Post Office by relieving it of it’s obligation to deliver packages, and allowign it to further consolidate and reduce it’s workforce.

  • brian

    I’m assuming you mean the USPS had over $60 billion in revenue (NOT profits) last year?