GAO Doesn’t Grasp USPS Financial Crisis

Just what the hell does the Government Accountability Office mean when it says the U.S. Postal Service should prefund its retiree benefits “as far as its finances permit” http://gao.gov/products/GAO-13-112?

With the USPS losing a reported $25 million a day right now, how much do those finances permit?

The GAO, which generally has a reputation for offering constructive analysis and criticism about federal financial issues, seems to have lost its way here.

For one thing, the agency knows full well the postal service can’t afford to pay the more than $5.8 billion per year to prefund retiree healthcare benefits for the next 44 years

This provision was part of the last postal reform law that took effect in 2007. This act otherwise eased burdens on mailers by mandating small annual predictable postage rate increases, replacing a  more haphazard system in place beforehand.

But many have said the 2006 law was created essentially to drive the USPS out of business. Even a superficial look at the effects of the Postal Accountability and Enhancement Act would lead any rational sane person to the same conclusion.

Last year, the USPS defaulted on about $11.1 billion of this requirement, essentially because it could not make its last two payments,

As things stand now, it doesn’t look as if the postal service is gonna have the necessary bucks to cough up anytime soon. The USPS is the only federal agency to carry this burden.

This GAO report comes about as Congress is likely to begin considering postal reform again. Last year, the Senate passed a bill that included some reform provisions. A more far-reaching House version died before even reaching the floor of the chamber, effectively scuttling postal reform.

Even without the passage of new legislation, the USPS has already begun shutting some facilities nationwide, laying off postal workers and cutting other expenditures to save more than $22 billion by 2015. This amount doesn’t even make a dent in the USPS’s deficit.

In fact, something more sinister might be at play here.

According to one report, the USPS’s cost-cutting plan is just a precursor to privatization. In any case these cuts are already hurting individual communities http://truth-out.org/news/item/13804-massive-cuts-to-postal-service-ua-step-towards-privatization

Many in Congress and in the business community do not like the USPS’s heavily unionized workforce. They would like nothing more than to undercut it so they could have (they hope) much freer rein to cut labor costs. This would resemble what many if not most corporations have done over at least the past 30 years,

While they all fail to realize is that the postal service and its predecessor the U.S. Post Office has kept this country together even before it was a country.

A lot of people are saying the Internet and other forms of electronic communication have rendered the USPS nearly obsolete or at a minimum out of date.

They don’t seem to understand  how much business if not the public at large still depends on the USPS.

The USPS’s financial crisis should not be an opportunity for misinformed and reflexively anti-government forces to destroy one of our country’s most sacred institutions.

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One Response to GAO Doesn’t Grasp USPS Financial Crisis

  1. Lynn N says:

    Usually the GAO renders neutral, non-partisan reports, so one wonders where this is coming from. If the post office were ever to privatize, it would be a case of be careful, what you wish for, you might get it. Costs of doing business would skyrocket since private enterprises don’t need to get any sort of approval for rate increases. We’d all be paying more and getting a lot less. Can’t people look a little further down the road instead of an immediate knee-jerk reaction? As in “private good, government bad”. Just asking.

    Like

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