Senator Susan Collins just wrapped up the first installment of the Senate debate on postal reform with some interesting revisionist history. She was apparently somewhat miffed by remarks Joe Lieberman had just delivered, noting that the USPS’s trust fund obligations, imposed by Collins’ 2006 PAEA law, were unique and responsible for much of the agency’s current financial situation.
Collins made two points- first, that the USPS had supported her legislation, because it knew that it would eventually need the money in the trust fund. Secondly, she said that the prefunding requirement was not responsible for the USPS deficit, since the USPS had run in the red for the last two years despite not having made the payments.
The first claim is cynical, to say the least. The US Postal Service is not a giant corporation that has the luxury of being able to give politicians millions in campaign contributions to influence their votes. The USPS is a giant business, but it is a creature of the Congress, which created it, and which can dismantle it, with the stroke of a pen. Jack Potter and the USPS leadership smiled and said nice things about PAEA in 2006, not because they thought Collins was a genius, but because the bill was going to pass, and there was nothing they could do about it.
Collins’s analysis of the causes of the USPS financial problems is simply bad math. Yes, the USPS has run in the red recently- but the operating deficits have been small given the economy and the structural problems the USPS faces in responding to the decline in mail volume. But the simple, indisputable fact is that before the USPS stopped paying into it, the trust fund already contained $46 billion! That’s $46 billion that would have offset all of the USPS’s current debt, and left $30 billion in profits.
You can certainly make an argument that the USPS needs to put aside money for future obligations, but to claim that the PAEA trust fund is not responsible for the postal service’s financial “crisis” ignores reality.