How Congress is ruining the postal service

You may have heard that the U.S. Postal Service is in financial trouble. They are steadily raising first class postage rates, and tried to end Saturday delivery. Why? Because our government is trying to cripple them.

Recent news of the postal service asking to raise the cost of mailing a first class letter to forty-nine cents, is being attacked by politicians. They forget that our government is forcing the postal service’s financial stress. How? Through the passage into law of the Postal Accountability and Enhancement Act of 2006.

So is this the reason that the post office doesn’t have any money? No, it’s because of Congress. Until 2006 the post office paid pension/health benefits from its current revenue and did well. After 2006 it was ordered to pay (pre-fund) up to seventy-five years worth of pension/health liabilities in a ten year period. That was the substance of the Title VIII section of the Postal Accountability and Enhancement Act of 2006.

I like the postal service. The people are friendly, efficient and first class postage rates are lower here than almost any other country that I found. For example, the U.K. charges 72 cents, Denmark, $1.46, Switzerland, 98 cents, Italy, 82 cents and Canada 57 cents. Yes, there are a few countries that charge less, Israel, 42 cents, Spain, 41 cents and South Korea, only 35 cents. But considering how large our country is, our first class rate is very reasonable.

It’s like buying a car over sixty months and then told that you have to pay for it in twelve. It’s very difficult to do. And by the way, you have to pay for your next five cars you plan on buying in the same twelve months!

That’s pre-funding.

So the post office is struggling. Today its pension fund is more than 100% funded with $42 billion in the bank. Other federal pensions are only 42% percent funded, and 80% funded for the typical Fortune 1000 pension plan.

My next question is where is the money kept that the post office is being forced to save or pre-fund? Unsurprisingly it’s turned over to the Treasury and lost in the general revenue funds; the Postal Service is given IOUs in return! As you may know, our government borrows over $40,000 a second to make ends meet, spending far more than its income, so that money is long gone.

Why? I can only think that Congress wants to get private carriers such as FedEx and UPS into the first class delivery business, but must first break the post office’s back with this huge annual expense. Shame on Congress.

The section of this law that is forcing our USPS into bankruptcy needs to be repealed before they fail. Fast. If elected next year, I’ll propose a bill to do just that.