A few billion here and there


The latest report (pdf) from the Postal Service’s inspector general looks at the payment schedule for the retiree health care trust fund. It concludes that the Postal Service is overpaying. A lot.

If the Postal Service continues the payment schedule required by the Postal Accountability and Enhancement Act of 2006 (the Act), our calculations indicate that the Postal Service could overfund its retiree health care liability by $13.2 billion by the end of fiscal year 2016. The Postal Service could pay on average $4.0 billion less each year from FYs 2009 to 2016 to prefund its retiree health benefits and still achieve the same level of funding anticipated under OPM’s assumptions.

The problem, according to the IG, is that the PAEA estimates 7 percent annual inflation for health care costs; most Fortune 500 companies project 5 percent inflation.

This is a huge mistake. Consider the numbers for this year alone. The Postal Service is scheduled to pay $5.4 billion into the trust fund; it has already made half that payment, with the other half due by September 30. But the IG report says the Postal Service should only need to pay $1.6 billion — a difference of $3.8 billion, or more than half the Postal Service’s deficit for the year.

The Postal Service can’t just decide to pay the reduced amount, of course; Congress would have to amend the PAEA. But this IG report gives added weight to the Postal Service’s claim that the trust fund payments are an unfair burden.


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  1. The USPS has far bigger problems than pre-funding retiree health benefits. This is just another smoke and mirror distraction away from the real problem – – – the enormous ineptitude of postal management. I worked in the belly of the beast for more than 30 years and I can say with complete confidence that the USPS management has and is bringing on its own demise. There are numerous examples that any current, retired or former employee of the beast can state but – – – there is no one listening. How can one explain a total of five managers (including one local postmaster) standing and watching one letter carrier case a route? Explain why a 204b spends up to an hour every morning collecting explainations of why an experienced letter carrier was from 2 to 5 minutes over minimum time allowed between street scans? These are but two of thousands of examples of harassment that letter carriers experience on a daily basis. To anyone outside of the USPS these two complaints sound petty but you must take into account the total waste of time and money that is incurred by the sheer pettiness of management. The massive money that is thrown away on a daily basis by a management force that believes that all of its craft employees are, in essence, thieves, is mind boggling at the very least. The USPS and its archaic management mindset has been digging its own grave for many years now the least we can do now is to give it some more shovels so they can finish the job sooner.

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