Americans have heard a lot in recent days about the “default” by the United States Postal Service. And the way that much of the media covered the story would lead those who have not followed the wrangling over the USPS’s future to imagine there’s a problem with the post office.
After all, the financial circumstance of the USPS sounds nightmarish.
“The Postal Service, on the verge of its first default on Wednesday, faces a cash shortage of $100 million this October stemming from declining mail volume that could balloon to $1.2 billion next year, “ declared the New York Times. “Confronting $11.1 billion in payments over the next two months for future benefits, the service said it would fail to pay about half that amount, which is due Wednesday, and does not foresee making the other half, which is due in September. An additional $5.6 billion payment due next year is also in question.”
But the real story of Wednesday’s default by the postal service was never one of declining mail volume or inefficiency.
“The ‘default’ is not primarily the result of a bad market or even bad operations, but of bad legislating by Congress,” explains National Association of Letter Carriers president Fredric Rolando.
Honest members of Congress agree. “Article 1, Section 8, Clause 7 of the U.S. Constitution gives Congress the responsibility to establish and ensure operation of the Postal Service,” noted Congressman Dennis Kucinich, D-Ohio, on Wednesday. “Today, August 1, 2012—224 years after the Constitution was ratified—Congress is presiding over the disestablishment of the Postal Service. Today a manufactured default created by Congressional legislation is pushing the Postal Service to the brink.”
In 2006, a Republican Congress—acting at the behest of the Bush-Cheney administration—enacted a law that required the postal service to “pre-fund” retiree health benefits seventy-five years into the future. No major private-sector corporation or public-sector agency could do that. It’s an untenable demand. “(The) Postal Service in the short term should be released from an onerous and unprecedented burden to pre-fund 75 years of future retiree health benefits over a 10-year period,” says US Senator Bernie Sanders, I-Vermont. “With $44 billion now in the fund, the Postal Service inspector general has said that program is already stronger than any other equivalent government or private-sector fund in the country. There already is more than enough in the account to meet all obligations to retirees.”
“The Postal Service should also be allowed to recover more than $13 billion in overpayments it has made to its pension plans,” adds Sanders. “With these changes alone, the Postal Service would be back in the black and posting profits.”