Monday, September 27, 2010

Postal Service Fine Without Taxpayers

As the US Postal Service continues to struggle with revenue problems, many taxpayers have become worried about the possibility of another huge bailout effort. However, according to the Washington Times representatives from the USPS have no desire to request a taxpayer-funded bailout.

It's election time in an era of polarization, but that doesn't excuse misleading the public with claims that the U.S. Postal Service seeks a taxpayer bailout ("Time for another government bailout," Commentary, Sept. 21). Nor does it excuse congressional interference with bargaining between the Postal Service and its unions. Unfortunately, the article by Rep. Darryl Issa fails on both counts.

The Postal Service doesn't seek a taxpayer bailout. It proposes to use a surplus in its pension account within the Civil Service Retirement System (paid for by postage rate payers and postal employees - its own funds, not taxpayer funds) to cover the cost of future retiree health benefits. Congress imposed the cost of pre-funding these future retiree health benefits - $5.6 billion per year - on the USPS in 2007. This requirement, which no other agency or business in America faces, is the major cause of the recent financial crisis at the USPS, not the Internet or the recession. Without the pre-funding requirement, the USPS would have been profitable two of the past three years.

The USPS also has plenty of flexibility to downsize - it has cut more than 100,000 jobs since the recession began in late 2007. The no-layoff contractual clause the congressman criticizes covers only workers with more than six years of service - leaving some 160,000 career and noncareer employees subject to layoffs.

Sadly, these problems are worsened by congressional inaction on resolving the unfair pre-funding burdens on the Postal Service. Yet Mr. Issa proudly vows to block legislation to address the situation.

Politicizing one of America's great institutions by getting Congress involved in the collective bargaining process is the last thing we should do. The Postal Service has not received a dime of taxpayer support in more than 25 years and offers the best, most affordable service in the world.

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