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.