Yesterday, the Government Accountability Office released a report concerning the grim financial future of the Postal Service. It may not come as a shock, but GAO refutes the USPS claim of paying billions of dollars in surplus to the federal government pension fund and the USPS plan to attain fiscal solvency as a whole.
USPS estimates their pension over-payment is in the ballpark of $50-$85 billion. Even if USPS had paid a surplus to the federal government and the full $85 billion was reimbursed, it would only briefly loosen their liquidity constraints. USPS annual losses would dissolve the funds shortly. USPS the past two years lost $8.5 and $10 billion.
GAO’s report exposes the faulty solutions of the USPS plan and for that matter Rep. Stephen Lynch’s quick-fix postal bill. Their plans do not attempt to reform USPS structural problems or lack of flexibility to meet market demand, the true plagues preventing USPS profitability. USPS and Rep. Lynch rely solely on taxpayer bailouts to remedy USPS fiscal woes.
The lack of real solutions from USPS makes their response to the report all the more disheartening. The USPS statement on the GAO conclusions claims the office “ignores actuarial principles that would govern in the private sector, as well as fundamental principles of fairness.” And “GAO’s discussion of ‘fairness’” was “flawed and incomplete.”
Is USPS really trying to claim it is against the “principles of fairness” if Congress does not mandate a taxpayer bailout? Sadly, it is clear the USPS and some members of Congress associate the concept of “fairness” with taxpayer bailouts.