Congress Should Address USPS Fixes Now, Advocate Says

Close-up of the Capitol's dome with the US flag

November 7, 2018

The upcoming lame duck session of Congress after the elections is the perfect time for lawmakers to consider legislation that would address the choking debt faced by the U.S. Postal Service caused by prefunding of retiree health benefits, said the head of a USPS advocacy group.

But don’t hold your breath on that happening in the current climate of Washington, DC.

Art Sackler, manager of the Coalition for a 21st Century Postal Service, said the USPS has defaulted on $41 billion in payments since 2012 related to the pre-funding mandate, put in place as part of the 2006 Postal Accountability and Enhancement Act.

Members of the coalition include newspaper and magazine publishers, printing and paper companies, catalogers and direct marketers, packaging companies, banks and telecommunications providers.

Sackler said while there is $120 billion in liabilities on the USPS balance sheet, operationally it has been about break-even over the past decade, thanks in large part to double-digit gains in parcel delivery driven by ecommerce growth.

“What we need to do is try to stabilize (the USPS) in the short term, building a bridge to permit longer-term structural changes, maybe from (President Trump’s) postal task force,” Sackler said. “Structural changes can only be enacted through Congress, not Trump. And fundamental changes take several Congresses to accomplish.”

One bill in Congress that has bipartisan support, Sackler said, would move $10.8 billion from the prefunding account into Medicare, which 20% of USPS retirees qualify for, switching them into that coverage. The fund would get replenished over time through a combination of payments from the USPS, revenue from postage and sale of USPS property. Sackler said this should be able to more than replenish the fund and eliminate the liability without any taxpayer funding.

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Clayton Norris

So the Postal Service which is $41 BILLION behind in payments to the US Treasury is supposed to help fund $10.8 Billion to Medicare. Does anyone else see the insanity in this proposal?

Feduptwice

An immediate increase on rates for all classes of mail would solve the prefunding problem. It only has to be a modest increase. Medicare is not in good financial shape and forcing Postal retiree’s into Medicare is not going to help medicare financial woes. Mailers should be paying their way. They can always start using FedEx or UPS if they don’t want to for the increase, BUT they will pay much higher rates at FedEx or UPS.

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