Postal Service $8.5 Billion Loss : Prefunding Retiree Benifits

Here is a good reason, perhaps the best reason, not to have the federal government be in charge of anything - just think of how they would run health care! Oh wait a minute, we are already seeing how the government is ramming health care down our throats and what it is costing us.

If the government is involved, rest assured it will cost more. We also can rely on the fact that what ever the government tells us it will be untrue, misleading or an out right lie.

It is imperative that the new people that are taking over in congress in January reestablish confidence. Without it we are doomed.


Postal Service Announces $8.5 Billion Loss
Source: Tad DeHaven, "Postal Service Announces $8.5 Billion Loss," Cato-at-Liberty.org, November 17, 2010.

The U.S. Postal Service (USPS) has announced a net loss of $8.5 billion for fiscal 2010. Since 2006, the USPS has lost $20 billion, and the organization is close to maxing out its $15 billion line of credit with the U.S. Treasury. Although the USPS has achieved some cost savings, they haven't been enough to overcome a large drop in revenue due to the recession and the greater use of electronic alternatives by the public, says Tad DeHaven, a budget analyst on federal and state budget issues for the Cato Institute.

The USPS is required to make substantial annual payments to prefund retiree health care benefits.

Last year, Congress allowed the USPS to postpone $4 billion of its fiscal 2009 into the future.
However, Congress did not provide similar relief on this year's required payment of $5.5 billion.
Critics of the retiree health care prefunding requirement argue that no other federal agencies or private companies face such obligations. The argument is largely irrelevant for two reasons. First, the federal government's financial practices are nothing to emulate. Second, very few private sector workers even receive retiree health care benefits.

In 2008, only 17 percent of private sector workers were employed at a business that offered health benefits to Medicare-eligible retirees, down from 28 percent in 1997. The actual number of private sector workers receiving these benefits is even lower, as not all employees employed at the 17 percent of businesses that offers retiree health benefits are eligible to receive them.

Policymakers should properly view the retiree health care benefit as a symbol of postal labor excess, which continues to weigh the USPS down like an anchor. Therefore, they should avoid allowing the USPS to further postpone these payments into the future, which could lead to a taxpayer bailout, says DeHaven.