Here we go again- on Tuesday we told you about USA Today’s fuzzy understanding of postal finances. Today it’s the Wall Street Journal’s turn:
The agency says it will default on its 2012 retiree health payment as well—also roughly $5.5 billion, due Sept. 30—if there is no legislative action by then.
Most everyone agrees the Postal Service needs an overhaul. It had a loss of $3.2 billion in the second quarter of this fiscal year; it is to report third-quarter results on Aug. 9.
Amazing, isn’t it? USPS lost $3.2 billion in one quarter, and it owes another $5.5 billion that it doesn’t have!
Well, no… What the Journal doesn’t seem to grasp (or more likely, chooses to ignore), is that almost all of that quarterly “loss” is because of the $5.5 billion payment due on August 1, not in addition to it.
The USPS enters a charge on its books each month for a portion of the 2011 and 2012 trust fund payments due August 1 and October 1, respectively, even though it has said all along that it has no intention of making those payments. That accounts for $9.3 billion in losses so far this year- money that has never, and will never, actually change hands.
Even more bizarre is the fact that the monthly charges for the 2011 trust fund payment, the one due August 1, represent the same dollars that the USPS showed as trust fund charges on last year’s monthly financial reports. That’s right- $5.5 billion of the losses the politicians and pundits are clucking about this year are the same dollars they clucked about last year, and they’re also the same $5.5 billion dollars due August 1. Talk about stretching a dollar!