a little truth about the manufactured losses of the once efficient usps

Es­ti­mated reading time is 7 min­utes.FOR A VERY LONG TIME, the United States Postal Ser­vice was run ef­fi­ciently and prof­itably. Then, al­most “all-of-a-sudden”-like, the USPS was one of the most in­ef­fi­cient and costly branches of our fed­eral gov­ern­ment. Ser­vice was still good—in fact, it was better in many respects—but money seemed to be going down the prover­bial toilet in op­er­ating costs. Even though postal workers are no longer con­sid­ered “well paid.”

Or so it seems. Read on:

“The un­seen hand of anti-government ide­ology can be found every­where nowadays—even in your mailbox. The proof is in what you won’t find there, like your an­nual state­ment of earned So­cial Se­cu­rity ben­e­fits. The gov­ern­ment stopped mailing those out in 2011.

It’s also get­ting a lot harder to find So­cial Se­cu­rity field of­fices, or to find someone to pick up the phone, as the So­cial Se­cu­rity Ad­min­is­tra­tion en­ters into yet more rounds of steep budget cuts.

So­cial Se­cu­rity cus­tomer ser­vice: now you see it, now you don’t.

The ques­tion is, why? So­cial Se­cu­rity may be the single most ef­fi­cient ben­efit pro­gram in the country. Its an­nual op­er­ating ex­penses are less than 1% of overall costs, a figure that pri­vate sector pro­grams should envy.

Slash funding for well-run gov­ern­ment pro­grams, then use the re­sulting chaos as ev­i­dence that gov­ern­ment isn’t the so­lu­tion, it’s the problem.

All the ev­i­dence points to one con­clu­sion: these cuts are mo­ti­vated by ide­ology, not gen­uine concerns.

Con­gress has cut four­teen out of the last six­teen So­cial Se­cu­rity Ad­min­is­tra­tion’s budget re­quests. There’s only one ra­tional ex­pla­na­tion for that: a hos­tility to­ward gov­ern­ment it­self, com­bined with the de­ter­mi­na­tion to place more public re­sources in cor­po­rate hands through pri­va­ti­za­tion.

It’s a simple game: slash funding for well-run gov­ern­ment pro­grams, then use the re­sulting chaos as ev­i­dence that gov­ern­ment isn’t the so­lu­tion, it’s the problem.

So­cial Se­cu­rity recipients—including the dis­abled, the el­derly, and children—pay a high price for this ide­o­log­i­cally mo­ti­vated cru­sade. That tells us that the people who govern us can be ex­tra­or­di­narily in­sen­si­tive to the human costs of their ac­tions. Many dis­abled and el­derly So­cial Se­cu­rity re­cip­i­ents de­pend on field of­fices, and the workers in them, to help them nav­i­gate the system.

The ra­tio­nale most fre­quently given for these cuts is that people can now ac­cess these ser­vices on­line. But se­niors are far less likely to use the In­ternet than other Amer­i­cans. Mi­nori­ties and lower-income house­holds are also far less likely to use the In­ternet, adding a dis­crim­i­na­tory el­e­ment to these decisions.

Here’s how cyn­ical this game gets: the very same Re­pub­li­cans who are using healthcare.gov’s prob­lems as proof that “gov­ern­ment doesn’t work” are dri­ving an ever-increasing share of So­cial Security’s ad­min­is­tra­tion onto the Internet—and then un­der­funding that ef­fort.

See where this is going?”

The ex­cerpts above were taken from an ar­ticle ti­tled “In­vis­ible So­cial Se­cu­rity Cuts: Now You See Them, Now You Don’t” by Richard Eskow for the Cam­paign for America;s Fu­ture (April 9, 2014). The orig­inal ar­ticle is just over 1,100 words in length; the pas­sages above total 340 words, so there is plenty left to read of Mr. Es­kow’s article.

Cartoon by the ever-efficient Khalil Bendip.

Car­toon by Khalil Bendib for Other Words.

The cause of the crisis

But wait—there’s more:

“For the third quarter of its 2012 fiscal year, the United States Postal Ser­vice re­ported a net loss of $5.2 bil­lion. With that came news that the Postal Ser­vice had failed to make a $5.5 bil­lion dollar pay­ment to the Trea­sury De­part­ment. An ad­di­tional $5.6 bil­lion pay­ment was missed today.

This re­port and the missed pay­ments fed the nar­ra­tive of the Postal Ser­vice as a dying in­sti­tu­tion, hope­lessly ill-equipped to adapt to the dig­ital age, with the in­evitable gov­ern­ment bailout at tax­payer ex­pense soon at hand.

Union leaders must un­der­stand that there is no easy fix to a crisis cre­ated by Rep*blicans in Congress.

The Postal Ser­vice’s losses are largely the product of a con­gres­sional man­date im­posed on no other public or pri­vate en­ter­prise in America. Since 2006, Con­gress has forced the Postal Ser­vice to make enor­mous an­nual con­tri­bu­tions into a fund for fu­ture re­tiree health ben­e­fits, in­cluding the $5.5 bil­lion and $5.6 bil­lion men­tioned above. In fact, since they began, these pay­ments have ac­counted for more than 80% of the Postal Ser­vice’s losses.

It is worth noting that the Postal pen­sion funds are over-funded and the re­tiree health care fund—into which these pay­ments are transferred—currently con­tains al­most $45 bil­lion dol­lars, enough to pay re­tiree health costs for decades to come.

This con­gres­sional man­date is the cause of the ‘crisis’ facing the Postal Ser­vice, and it has nothing to do with op­er­a­tions, de­creasing mail volume, or the Internet.”

The above ex­cerpt is from an ar­ticle ti­tled “A Re­ality Check on Postal Ser­vice Fi­nances” by Ron Bloom for the Huff­in­gton Post (Sep­tember 30, 2012). The orig­inal ar­ticle is just over 700 words; the pas­sages above total 210 words, so there is plenty left to read of Mr. Bloom’s ar­ticle. So, if this in­ter­ests you, click on over to the Huff­Post web­site and read the en­tire piece.

Cartoon by Mike Lukovich on how efficient the Rep*bican Congress is on hobbling the USPS.

Car­toon by Mike Luck­ovich of The At­lanta Journal-Constitution.

That’s absolutely false

And what do the Re­pub­li­cans who passed this bill that calls for the USPS to set aside an un­prece­dented figure nearly ten times that of any other gov­ern­ment agency for fu­ture re­tirees? For that we turn to Lori Ann LaRocco, who has thrived in the “new economy” and here lends a sym­pa­thetic ear to Chairman Dar­rell Issa, cer­tainly a man of im­pec­cable rep­u­ta­tion and ster­ling char­acter. (Damn—there I go using irony, the ef­fect of which is usu­ally lost on the internet!)

LaRocco: I asked Chairman Issa what his mes­sage is to the US Postal Ser­vice Unions who say Con­gress is to be blamed for this crisis.

Issa: Union leaders must un­der­stand that there is no easy fix to a crisis cre­ated by de­clining mail rev­enues. The often non-existent ac­counting is­sues unions want to talk about don’t ad­dress fun­da­mental changes to de­livery cre­ated by the growth of the In­ternet. Union leaders need to work with, not against, Con­gress on postal re­form, be­cause the al­ter­na­tive is a pos­sible shut-down of the Postal Ser­vice next summer.

Postal pen­sion funds are over­funded and the re­tiree health care fund cur­rently con­tains enough to pay re­tiree health costs for decades to come.

LaRocco: The Postal unions are urging Con­gress to allow the Postal Ser­vice to stop making these pre­funding pay­ments. What would happen?

Issa: The un­funded oblig­a­tions will be 25% higher than they were be­fore the Postal Ser­vice started its pre­funding pay­ments. With de­clining rev­enue, this huge un­funded li­a­bility would be a burden that the Postal Ser­vice could not af­ford to bear.

LaRocco: So bottom line, the unions claim of the postal ser­vice pre-funding pen­sions for fu­ture workers is false?

Issa: Ab­solutely false. The non-partisan Con­gres­sional Re­search Ser­vice re­cently found that pre-funding re­quire­ments match Con­gress’ in­tent when they were en­acted in 2006. The in­tent is to en­sure that the growing un­funded li­a­bility for re­tiree health care for cur­rent em­ployees is cov­ered. These em­ployees ne­go­ti­ated for and earned these ben­e­fits with their work, so USPS should pay for them.

LaRocco: Are the postal unions re­sorting to fear tac­tics and myths to scare Amer­i­cans about what is re­ally going on?

Issa: Postal workers who have been writing their mem­bers of Con­gress or protesting are just re­sponding to the in­for­ma­tion that they have been given by their own union lead­er­ship. They have been told this money is not cov­ering their ben­e­fits, but in fact cov­ering ben­e­fits of people who haven’t been born yet. That’s ab­solutely false.

They have been told there is an over­pay­ment in an­other pen­sion ac­count that could cover their re­tiree health care ben­e­fits. The non-partisan Gov­ern­ment Ac­count­ability Of­fice, which au­dits fi­nan­cial re­ports for the en­tire fed­eral gov­ern­ment, has weighed in to clearly state that al­le­ga­tion is false.

They have been led to be­lieve out­ra­geously false things about Con­gress “stealing” their money to pay for other things.

The truth will get out there and postal union mem­bers will fi­nally un­der­stand we’re looking out for them as well as the tax­payer. Postal re­form is nec­es­sary to se­cure their earned benefits.”

The above ques­tions and an­swers are taken from an ar­ticle ti­tled “The Truth About The Post Of­fice’s Fi­nan­cial Mess” by Lori Ann LaRocco for CN­BC’s NetNet site (Oc­tober 24, 2011). The orig­inal ar­ticle is just over 1,500 words; the pas­sages above total 210 words, so there is plenty left to read of Ms. LaRoc­co’s ar­ticle. So, if this in­ter­ests you, click on over to the CNBC web­site and read the en­tire piece.

Photo of a USPS delivery truck as a super-efficient, souped-up hotrod.

FEA­TURED IMAGE: The USPS has tried many in­no­v­a­tive methods to please the people they serve. In southern Cal­i­fornia, where large dis­tances have to be cov­ered for even the most mun­dane de­liv­eries, speed is often of the essence. The still-existing hot rod cul­ture once so promi­nent in the 1950s and ’60s served as in­spi­ra­tion for this souped-up postal vehicle.

Well, they’re not brag­ging so don’t put them down, but they’ve got the fastest set of wheels in town. When some­thing comes up to them, they don’t even try, be­cause if the USPS had a set of wings, man, they know she could fly! Alas, all this sped was for nothing in a grid-lock on 5 or any of the other high­ways sur­rounding Los Angeles.

USPS union leaders un­der­stand there is no easy fix to a crisis cre­ated by Con­gress. Click To Tweet

One last question

This ques­tion is not from Ms. LaRocca, but from me: “How many United States Postal Workers gen­uinely be­lieve that Dar­rell Issa and his fellow Re­pub­li­cans are ‘looking out for them’?”

One last an­sweralso from me: “Prob­ably postal em­ployees who are Re­pub­lican voters who be­lieve that we found weapons of mass de­struc­tion in Iraq, who don’t be­lieve in man-affected global cli­mate change, and who are still waiting for Rea­gan’s promised trickle-down ef­fect to trickle down to them.”


Leave a Comment