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Wed Aug 1, 2012, 05:25 PM

Congress Pushing Postal Service into "Manufactured Default"


Congress Pushing Postal Service into "Manufactured Default"

By Dennis Kucinich August 1 2012

~snip~

Today the Postal Service will not make a payment that it should never have had to make in the first place to pay for prefunding 75 years of retiree benefits in 10 years. A manufactured default encouraged by banks and other interest groups. A move toward privatization of one of America's most vital services.

The Congress has a responsibility to stand up, but here in the U.S.A., under Citizens United, everything is up for auction including the Postal Service.

Wake up, America. Universal service is on the line. Wake up, America and stand up for the Constitution. 575,000 Postal Service workers and our obligation to the American people to see to it that the Postal Service is rescued from those who want to push it into default or privatize it for their own profit.


Full editorial:

http://www.opednews.com/articles/Congress-Pushing-Postal-Se-by-Dennis-Kucinich-120801-859.html

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Reply Congress Pushing Postal Service into "Manufactured Default" (Original post)
think Aug 2012 OP
think Aug 2012 #1

Response to think (Original post)

Wed Aug 1, 2012, 07:20 PM

1. To summarize as to how I see this I would state the following

The 2006 congress had to know that the law they were passing in regards to the US Postal Service would intentionally cause the Postal service to go broke and default on their financial obligations.

They did this to destroy the Postal Service. And the congress people who pushed and voted for this legislation should be held morally in contempt and shoulder the blame for this colossal policy failure. To be perfectly clear the failure is that of the 2006 congress and not the Postal Service.

This is an excellent summary of the current crisis written almost one year ago:

A Manufactured ‘Crisis’: Congress Can Let The Post Office Save Itself Without Mass Layoffs Or Service Reductions
By Zaid Jilani on Sep 28, 2011 at 11:40 am

~snip~

But what has been lost in the political debate over the Post Office is why it is losing this money. Major media coverage points to the rise of email or Internet services and the inefficiency of the post model as the major culprits. While these factors may cause some fiscal pain, almost all of the postal service’s losses over the last four years can be traced back to a single, artificial restriction forced onto the Post Office by the Republican-led Congress in 2006.

At the very end of that year, Congress passed the Postal Accountability and Enhancement Act of 2006 (PAEA). Under PAEA, USPS was forced to “prefund its future health care benefit payments to retirees for the next 75 years in an astonishing ten-year time span” — meaning that it had to put aside billions of dollars to pay for the health benefits of employees it hasn’t even hired yet, something “that no other government or private corporation is required to do.”

As consumer advocate Ralph Nader noted, if PAEA was never enacted, USPS would actually be facing a $1.5 billion surplus today:

By June 2011, the USPS saw a total net deficit of $19.5 billion, $12.7 billion of which was borrowed money from Treasury (leaving just $2.3 billion left until the USPS hits its statutory borrowing limit of $15 billion). This $19.5 billion deficit almost exactly matches the $20.95 billion the USPS made in prepayments to the fund for future retiree health care benefits by June 2011. If the prepayments required under PAEA were never enacted into law, the USPS would not have a net deficiency of nearly $20 billion, but instead be in the black by at least $1.5 billion.

~snip~

Full article:
http://thinkprogress.org/economy/2011/09/28/330524/postal-non-crisis-post-office-save-itself/

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