Story on GAO report ignores the OTHER $50 billion

This morning the Washington Post reports that the Government Accountability Office will announce later today that it does not believe the US Postal Service has been overcharged by as much as $75 billion for employee pensions. This despite the findings of the Postal Regulatory Commission, the Postal Service inspector general and two independent accounting firms that the USPS had indeed been overcharged.

We’ll have to wait for the full report to see exactly how GAO came to this conclusion, but the idea that the USPS would actually get its money back was always shaky. Aside from the overwhelming political forces bent on weakening the USPS and its unions, there was also the perfectly valid question of who was really due a refund- after all, the USPS sets its rates to match its expenses, so if anyone was out of pocket, it was the postal customer, not the USPS itself.

But before jumping to the conclusion that this report validates Darrell Issa’s plan to destroy the USPS, let’s remember something that today’s Post story omits- the other $50 billion- the $50 billion that no one disputes, but the news media seems to forget.

As of the end of fiscal year 2010, the USPS has paid $42.5 billion into the “trust fund” established by the 2006 PAEA law- a fund set up to prefund the future health benefits of hypothetical future postal retirees (including many not yet born!). In addition, there is virtually universal agreement that the USPS has overpaid the FERS retirement fund by $6.9 billion. (According to the Post, the GAO report confirms the FERS overcharge). That’s over $50 billion in USPS profits that are sitting in the Treasury, out of reach. Despite that, the Post story states, without any supporting evidence, that “soaring labor costs are most responsible for USPS’s financial condition”.

Right. That extra $50 billion couldn’t have had anything to do with it, could it?

There is no dispute that the USPS needs to make big changes to its operations to respond to the drop in mail volume- even $50 billion wouldn’t be enough to support “business as usual” for long. But there is also no denying the fact that absent the trust fund charges and the FERS overpayment, the USPS would be facing its difficult future with zero debt and billions of cash in the bank. Maybe one of these days that truth will find its way into the mainstream media. Let’s hope it happens before its too late.

via The Postal Service isn’t owed a big refund, GAO says – The Federal Eye – The Washington Post.

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  • M. Jamison

    The GAO report makes little difference although, as you suggest, the timing is a bit questionable. Current accounting practice would have resulted in the obligations resulting from the 1971 PRA being handled differently. The Siegel report details those changes and the solid reasons for applying them but the fact remains that this money has always turned on Congress’ intent and at best that is a very mushy area.
    Regardless of what happens on that issue the fact remains that the Postal Service has essentially run in the black from operations over the last several years. Absent the prefunding mandate and with appropriate changes and improvements to workman’s compensation charges the Postal Service has managed the drop in volumes. And, it is arguable that the PMG’s “panic” mode may have scared some mailers away.
    The real problem is that the BOG and the past two PMGs have failed to articulate a strategic vision that embraces the USO. Instead they have been on a mission to paint employees as bogeymen while trying to redefine essential infrastructure as nothing more than another “stakeholder” in the mailing industry. Management and Congress have blundered their way into the possibility of eliminating 100,000 or more good middle class jobs that were essentially paid for. Given our economy that borders on criminal.

  • Ebay republican

    They stole our money and don’t plan on returning it just like the money stolen from social security will never be returned.

  • craft director

    I wish that Issa and Ross had the testicular fortitude to just admit that the 50 billion is gone….spent and that is why they keep calling it a bailout. WE BAILED CONGRESS OUT! What a bunch of thieves.

  • cpttuna

    Hi, I’m Congressman Issa. I’m from the government and I’m here to help.

  • David

    M. Jamison, I concur that what is happening with postal policy borders on criminal. However, that is somewhat like saying that the public misinformation campaign the Postal Service and those in congress bent on emasculating the labor contingencies have promulgated borders on the truth. Character counts, even today, and the foundational aspects of ethics, in thoughts, words and deeds, would be well-considered in these challenging times, across all economic strata, for the good of the nation as a whole.

  • OhioBoy78

    Wow, David. After reading that, I am pretty sure I feel a drop of blood leaking out of my eyeball.

  • David

    Good.