Hidden in Obama’s 2012 Budget: USPS Bailout

As traditional mail volumes decrease and competition from companies like FedEx and UPS increase, the U.S. Postal Service is facing a $2.2 billion net loss in its second quarter.

The agency warned it might default on payments to the federal government at the end of the fiscal year – unless they get a bailout.  President Obama hid a small bailout in his 2012 budget, which would return overpayments to pension funds and allow the Postal Service to reschedule prefunding payments of future health benefits over the next forty years, beginning in 2017.  In other words, $4 billion dollars of “temporary financial relief.”

Allowing the agency to reschedule those payments amounts to money up front and not to be paid back until 2017 – and even then they will have 40 years to pay that back.  Taxpayers are footing the bill now, but won’t get all of that money back until 2057!

This is not the first time that the USPS has needed a bailout.  Just last year the agency was reporting a shortfall of about $7 billion.  At that time, Congress allowed the USPS to reschedule the future retiree health care benefits, which is what President Obama is proposing to do again.  Of course, at that time, APWU President Cliff Guffey had no qualms about blaming Republicans for the USPS’ problems.

“The Postal Service’s financial problems are the direct result of the onerous prefunding requirements of the Postal Accountability and Enhancement Act (PAEA) of 2006.  In fact, without the prefunding mandate, the USPS would have experienced a surplus of $3.7 billion in Fiscal Years 2007-2009, despite the worst recession in 80 years.”

Really Guffey?  A business in the decline reporting a surplus? That’s like saying DVD rental stores would have had a surplus.  The market is simply in less demand.

While the “bailout” discussion was taking place, Congressman Darrell Issa (R-CA) blamed the predicament on labor contract negotiations.  He said in an op-ed:

“Labor costs account for 80 percent of USPS operating expenses.  Yet because of union contracts that contain “no-layoff” clauses, thousands have less than a full day’s work, and some are even paid to sit in empty rooms.”

Taxpayers should not be giving this agency money so that workers can sit around twiddling their thumbs.  Force the unions to consent to lay-offs, and restructure the company.  Rep. Issa made it clear that he would not be a part of another bailout for the U.S. Postal Service, it’s time Congress decide on a way to fix USPS, instead of pouring more money into a failing agency.

Please Share Your Thoughts

3 thoughts on “Hidden in Obama’s 2012 Budget: USPS Bailout

  1. Privatize. It seems that this service has been taken over by inept, lazy people or union “workers”. I delivered mail on foot and made to deliveries a day.
    Now they drive and the expected delivery is anytime between 10 AM to 6 PM. Most have cell phones and park on side roads or in supermarket lots. I’ve spoken with a few carriers and they like to walk and they deliver there mail on time.

  2. Wow you guys really do conservatives a diservice with entirely slanted innacurate statements regarding the USPS. First off lets start by quoting this articles nonsensical statements.

    “which would return overpayments to pension funds” What do you not get about the word overpayment that means it is money that is rightfully ours that we didn’t owe and should be returned. This money did not come from taxes it came from postal revenue? How is getting your own funds back a bail out? Do you call your IRS tax refund a bail out? This money was wrongfully taken period!

    Next the prepayment mandate of 5.5 billion dollars a year. No we can’t afford to pay this who could especially in this economy. Does UPS, Fed Ex or any other company have to pay for retiree health care benefits 75 years into the future, and then over just 10 years? Does that make sense to anyone without a recent head injury? That money goes into the treasury and gets spent by an out of control governemnt and is not escrowed into a seperate account for it’s stated purpose. Sounds real fiscally conservative to me using the USPS postal revenue to support federal governments spending addiction then blaiming them for not making ends meet and claiming they want a hand out! The only hand out we need is out of our finances! Then to state the money is not going to be payed back until 2017 are you insane, there is no money to be paid back that is money taken wrongfully from the USPS not given to it? We are asking the treasury to steal it at a slower rate, but it didn’t originate from them. Almost all the rate increases of the last ten years are the result of surpluses taken from the USPS. This has resulted in unecessary rate increases that serve to hasten our mail volume decline!!! How do you think Fed Ex and UPS would fare if at every accounting period they had a surplus someone took it, and next accounting period when they needed it it’s already been spent by congress!

    As far as that scoundrel Issa the people sitting in empty rooms is orchestrated by managment, they took needed people from the retail service window changed their jobs so as to make them sit around and lose money while our customers have to wait in long lines. This was deliberatly done by management very recently. I’m often critical of unions but the cblatent lies of Issa and his deliberatly false portrayals now have me questioning those who I thought were my fellow conservatives, this is starting to smell like the weapons of mass destruction in Iraq!

    “A business in the decline reporting a surplus?” Not that reallity and facts seem to matter, but absolutely, we have reduce hours and overtime drastically. We have reduced our workforce through attrition by over a 100,000 from our peak in 2006. So while it is true that electronic bill payments and e-mail has impacted us and will only continue to do so, it is also true that our failures are due to external mandates and we can’t go to five day delivery with out congresses permissin despite the former PMG begging to before we were in the red years ago. We need to make changes like 5 day delivery, keep any revenue that is generated by postage not call it a surplus have congress appropriate the funds then raise rates a year later when it could have been taken from the previous surplus. So if this so called conservative group thinks lying is good practice I will not be voting for anyone they support. I say that as a lifelong conservative, pro life smaller government individual that hates liars of any political persuasion period!!!

    Planting a bomb in someones house then going see the structure was failing is tantamount to what this is. I’m almost embarrassed to have voted Republican what a shame.

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