Video: USPS problems go back to 2006 law

SAN FRANCISCO KGO — We’ve heard about the effect of online bill paying and the impact of the great recession as reasons behind the U.S. Postal Service cutting Saturday services. But far less has been reported about a 2006 law that was really a poisoned pill for the Postal Service.

In 2006, the Postal Service wasn’t in debt. It was making money and handling a record amount of mail.

But then internet bill paying began cutting into the Postal Service’s bread and butter. The great recession pushed revenue down even further and Congress passed the Postal Accountability and Enhancement Act, requiring the USPS to prefund retiree health benefits 75 years into the future and to pay all of that money in the next 10 years.

“The Postal Service is the only agency required to make that retiree healthcare benefit,” USPS spokesperson James Wigdel said. “Every other agency is required to pay as you go.”

Read more: 2006 law contributed to today’s U.S. Postal Service problems |

  • John Donebar


  • Nalc

    Cut Saturday, and repeal the pre funding requirement.

  • Bob

    And I bet that most people don’t know that the PAEA was backed by UPS.

  • Jeff

    So after the ten years are up of prefunding ,All 3 USPS unions should get great new contracts agreement with BIG raises since there will be so much extra money. Big bonus too

    • JY

      Yeah, right. For every raise non managers (union workers) get, we usually have something that wipes out or minimizes the raises. This contract, letter carriers got 3.5% over five years, but our medical costs increased by 4% effectively wiping out any raise we receive. Only managers get bonuses.

    • South Dakota Carrier

      I’m sure upper mngt will get huge increases. Just like corporate American because of the great job they are doing. Will the workers will continue to be squeezed.

      Remember the USPS needs to be run like a real company. More for the executives and less for the rank and file workers.

  • JY

    The internet of anything helped the postal service (think eBay).