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Another View: The Myth of the Postal Service's Finances

Thursday, 21 June 2012 09:11 By Robert Weiner and George Clingan, Des Moines Register | Op-Ed

The future of the U.S. Postal Service has been in limbo for several years. It lost an astounding $25.4 billion between 2007 and 2011 and has already lost $3.2 billion in the first quarter of 2012. The service is on the road to bankruptcy.

The Des Moines Register reported last month that Iowa narrowly avoided 178 closures that the agency planned as part of a national cutback of 3,700 post offices. Because of political pressure against the closings, in their place, and for now, many outposts will see dramatically shorter operating hours.

The health of the Postal Service lies largely in the hands of Congress, which has made a tremendous accounting strategy error. In 2006, President George W. Bush signed the Postal Accountability Act that requires the agency for 10 years to pre-pay retiree pensions 75 years in advance. As a consequence, the agency has added a whopping $5.5 billion annually to its balance sheet and will continue to do so until 2017.

The post office is a part of our national identity. The Constitution of 1789 empowers Congress "to establish post offices and post roads" and "to make all laws which shall be necessary and proper for carrying into execution the foregoing powers." The post office helped to link together our fledgling nation. The first postmaster general was Benjamin Franklin.

Today, the agency maintains 32,000 outposts and employs more than 600,000 citizens, the second largest employer after Walmart. It supports every community in the country and provides the most efficient and cheapest delivery service among the world's top 20 largest economies.

The pre-payment strategy could bankrupt the post office as early as this year. No other government agency is required to pre-pay retiree pensions to this extent. Most agencies prepay pensions for 20 to 30 years.

It's true that the Postal Service is in need of restructuring to accommodate the decline in mail demand and adapt to the 21st century. However, the mails provide an important service to the public that is as valuable as education and defense. They cannot be replicated by the private sector. Just try sending a letter or light present or check to someone for 45 cents by any other carrier.

We cannot rely on the Internet to service our communication needs, nor could we rely on United Parcel Service or FedEx to pick up all of the slack. And they would they do it for the price.

The absence of the Postal Service would disproportionately hurt poor communities and individuals — those with the least access to the Internet depend on the mail to pay bills and taxes and to stay in touch with friends and family. A private sector solution would not serve all communities equally and would subject postage to market prices or higher. We don't want to pay dollars instead of pennies for the right to show our family and friends we love them.

It is paramount that Congress defends this important institution, lest it become a skeleton of its former self, or worse — completely dismantled. Congress can take the first step toward saving the Post-Office by passing H.R. 1351 proposed by Rep. Stephen Lynch, D-Mass., designed to eliminate various accounting games that have for years hijacked postal funds for the U.S. Treasury. Four Iowans are cosponsors of this bipartisan legislation: David Loebsack, D-Iowa City, Bruce Braley, D-Waterloo, Leonard Boswell, D-Des Moines, and Thomas Latham, R-Clive. The bill would be a financial lifesaver — stopping $55 billion to $86 billion of potentially unnecessary post office overpayments to the two federal retirement programs.

Despite the fact that the bill, introduced in April last year, has 229 co-sponsors, it has yet to reach a vote on the House floor. House Government Reform Chairman Darryl Issa, R-Calif., is blocking it because he "wants to privatize everything, and destroy union jobs," according to Sally Davidow, communications director for the American Postal Workers Union.

Thus far Congress has shown itself incapable of defusing the pension pre-pay time bomb. If this trend continues, the Postal Service may as well start packing up in preparation for its new home — in national museums.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

George Clingan

George Clingan is a policy analyst at Robert Weiner Associates.

Robert Weiner

Robert Weiner is a national columnist, White House reporter, radio-TV commentator, and former spokesman for the Clinton White House and senior aide to Congressmen John Conyers, Charles Rangel, Claude Pepper, Ed Koch and the late senator Edward Kennedy. He directed the Daily Press Briefing Room at the 2008 and 2012 Democratic National Conventions where President Obama was nominated.


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Another View: The Myth of the Postal Service's Finances

Thursday, 21 June 2012 09:11 By Robert Weiner and George Clingan, Des Moines Register | Op-Ed

The future of the U.S. Postal Service has been in limbo for several years. It lost an astounding $25.4 billion between 2007 and 2011 and has already lost $3.2 billion in the first quarter of 2012. The service is on the road to bankruptcy.

The Des Moines Register reported last month that Iowa narrowly avoided 178 closures that the agency planned as part of a national cutback of 3,700 post offices. Because of political pressure against the closings, in their place, and for now, many outposts will see dramatically shorter operating hours.

The health of the Postal Service lies largely in the hands of Congress, which has made a tremendous accounting strategy error. In 2006, President George W. Bush signed the Postal Accountability Act that requires the agency for 10 years to pre-pay retiree pensions 75 years in advance. As a consequence, the agency has added a whopping $5.5 billion annually to its balance sheet and will continue to do so until 2017.

The post office is a part of our national identity. The Constitution of 1789 empowers Congress "to establish post offices and post roads" and "to make all laws which shall be necessary and proper for carrying into execution the foregoing powers." The post office helped to link together our fledgling nation. The first postmaster general was Benjamin Franklin.

Today, the agency maintains 32,000 outposts and employs more than 600,000 citizens, the second largest employer after Walmart. It supports every community in the country and provides the most efficient and cheapest delivery service among the world's top 20 largest economies.

The pre-payment strategy could bankrupt the post office as early as this year. No other government agency is required to pre-pay retiree pensions to this extent. Most agencies prepay pensions for 20 to 30 years.

It's true that the Postal Service is in need of restructuring to accommodate the decline in mail demand and adapt to the 21st century. However, the mails provide an important service to the public that is as valuable as education and defense. They cannot be replicated by the private sector. Just try sending a letter or light present or check to someone for 45 cents by any other carrier.

We cannot rely on the Internet to service our communication needs, nor could we rely on United Parcel Service or FedEx to pick up all of the slack. And they would they do it for the price.

The absence of the Postal Service would disproportionately hurt poor communities and individuals — those with the least access to the Internet depend on the mail to pay bills and taxes and to stay in touch with friends and family. A private sector solution would not serve all communities equally and would subject postage to market prices or higher. We don't want to pay dollars instead of pennies for the right to show our family and friends we love them.

It is paramount that Congress defends this important institution, lest it become a skeleton of its former self, or worse — completely dismantled. Congress can take the first step toward saving the Post-Office by passing H.R. 1351 proposed by Rep. Stephen Lynch, D-Mass., designed to eliminate various accounting games that have for years hijacked postal funds for the U.S. Treasury. Four Iowans are cosponsors of this bipartisan legislation: David Loebsack, D-Iowa City, Bruce Braley, D-Waterloo, Leonard Boswell, D-Des Moines, and Thomas Latham, R-Clive. The bill would be a financial lifesaver — stopping $55 billion to $86 billion of potentially unnecessary post office overpayments to the two federal retirement programs.

Despite the fact that the bill, introduced in April last year, has 229 co-sponsors, it has yet to reach a vote on the House floor. House Government Reform Chairman Darryl Issa, R-Calif., is blocking it because he "wants to privatize everything, and destroy union jobs," according to Sally Davidow, communications director for the American Postal Workers Union.

Thus far Congress has shown itself incapable of defusing the pension pre-pay time bomb. If this trend continues, the Postal Service may as well start packing up in preparation for its new home — in national museums.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

George Clingan

George Clingan is a policy analyst at Robert Weiner Associates.

Robert Weiner

Robert Weiner is a national columnist, White House reporter, radio-TV commentator, and former spokesman for the Clinton White House and senior aide to Congressmen John Conyers, Charles Rangel, Claude Pepper, Ed Koch and the late senator Edward Kennedy. He directed the Daily Press Briefing Room at the 2008 and 2012 Democratic National Conventions where President Obama was nominated.


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