Postal Service woes could undermine federal workers' comp fund


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.


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  1. Why should USPS pay more into benefits more than other agencies. I would think because it is a non govt agency enjoying rights as a private operating entity. Its time to pull in the reins and bring back under the Federal govt control. THis agency has failed like no other. Unable to get money from Congress and no sympathy from the public it is in over its’ head. Too many local post offices, stations and branches. 6 day a week delivery is stupid. THe Board for Governors is a joke and another level of approval that always comes. The major mailers have USPS under their fingers. It is time to re-organize.

  2. Rep. Issa is a jaded politician with a questionable past. That anyone with half a brain or more listens to his proposals to gut the USPS tells how dumb people are. And how congressman, with past convictions can B.S. the public and get away with it. I’m a Republican, and Rep. Issa is a windbag not worthy of holding any office, even dog catcher. My guess is he stands to make money on this deal if he has his way. Big surprise. What a bum!

  3. The Post Office – once a proud organization that accomplished a needed task with strength of character. Now a aging dinosaur with an obese body that instructs its pea sized brain to eat more inorder to keep its bloated body alive. All at the expense of the the tax payer. The Workers Compensation issue is only of of serveral facing the US Post Office. They have people 90 years old still on WC and making more money than if they had retired on a federal pension which is well above what the rest of us have to live on. It’s time for a house cleaning and the first to should be the unions.

  4. @Bull Dog… you need to get a better education. Sounds like you dropped out of Home School. You make accusations without any facts.

    Here’s the facts, the postal service would be in the black fiscally if Issa wasn’t chair of the commitee. The postal service is the only oranization (public or private) that has to pre-fund its retiree health care at staggering $5.5 billion AND continue to pay into CSRS when it is over funded by $75 Billion. If the USPS didn’t have to pay into those funds, everything would be good.

    BUT… the Repugnicans want the USPS to fold! This way their corporate buddies can come in and sweep up the major money making areas and leaves everything else behind.

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