What happens at the U.S. Postal Service doesn’t necessarily stay at the Postal Service.
The latest example: A federal workers’ compensation fund could run out of money within three months if the cash-strapped mail carrier skips a $1.2 billion payment due in mid-October, according to the Labor Department.
The department runs the fund under the Federal Employees’ Compensation Act. Should the Postal Service miss the October “chargeback” for past claims, officials estimate that the program would have no money to pay any benefits during the last four months of fiscal 2012, running from next June through September, according to a letter to Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee.
BUT, the fund could have to halt benefits by late this November if the Postal Service misses its required payment and—as is considered extremely possible—the government begins fiscal 2012 under a continuing resolution. The reason is that Congress generally doesn’t appropriate enough money under a short-term CR to cover the cost of annual lump sum benefits, Brian Kennedy, the Labor Department’s assistant secretary for congressional and intergovernmental affairs, said in the letter. On top of that, the workers’ comp fund wouldn’t have enough money to pay the vendor that processes medical claims under the compensation act, Kennedy wrote. His letter, dated Aug. 1, was first reported by Reuters news service.
So, will the Postal Service, which describes itself as effectively bankrupt, be able to ante up? At this point, the answer is yes, spokesman Dave Partenheimer said today in an email. But in its third-quarter report released earlier this month, the Postal Service suggested it could have “insufficient cash” to meet all of its federal obligations this fall, including the workers’ comp component.
The moral? To rewrite a famous line from English poet John Donne, no agency is an island. And for thousands of federal workers’ comp beneficiaries out there . . . keep your fingers crossed.