U.S. Postal Service officials and postal unions have long pushed Congress to relieve the agency of its obligation to prefund retiree health benefits. It’s a burden other agencies don’t share and one that officials say the Postal Service can’t afford. Defaults on prefunding payments total $11.1 billion.
But not everyone agrees that removing or substantially reducing the prefunding requirement is the best way out of the USPS hole.
A recent Government Accountability Office report says the “USPS should prefund its retiree health benefit liabilities to the maximum extent that its finances permit.”
The GAO said that deferring the prefunding payments “could increase costs for future ratepayers and increase the possibility that USPS may not be able to pay for some or all of its liability.”
The report said the Postal Service’s financial condition makes it difficult for the agency “to fully fund the remaining $48 billion unfunded liability over the remaining 44 years of the schedule” set up by the 2006 Postal Accountability and Enhancement Act.
USPS officials say they can pay $0.00. The Postal Service is losing $25 million a day.
“If Congress was to eliminate the requirement for USPS to pay down its unfunded liability on retiree health care, taxpayers would almost certainly pick up the bill,” said House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.). “USPS needs to cut costs, not cheat taxpayers or its own employees.”
The GAO report gives something to both sides, saying that the USPS should prefund its retiree health benefits, while acknowledging that it currently is too broke to do it.
In a response included in the GAO report, Joseph Corbett, the USPS chief financial officer and executive vice president, said the Postal Service “does not have the financial resources to make the prefunding payments required by current law.”
He criticized the GAO for releasing a report that did not include the controversial USPS proposal to sponsor its own health-care plan, outside of the Federal Employees Health Benefits Plan that now covers postal workers.
“Allowing the Postal Service to gain control of its own health care program would save money, reduce or eliminate the current unfunded liability, and allow for better management of health care costs going forward,” Corbett said.
Fredric Rolando, president of the National Association of Letter Carriers, called on Congress to “reject the GAO’s policy myopia. . . . Government records show that 80 percent of all the USPS red ink stems directly from prefunding.”
Report: Close the digital divide
Uncle Sam needs to get with the digital program.
That’s the takeaway from a report — with the appropriate title #ConnectedGov — on the government’s use of technology and social media. It is being released Wednesday by the Partnership for Public Service, in collaboration with the Booz Allen Hamilton consulting firm.
The report identifies innovative digital programs in seven agencies, demonstrating that “there are places in government that are doing immensely creative and impactful things,” said Max Stier, president and chief executive of the Partnership.
GAO calls on Postal Service to prefund retiree benefits
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GAO calls on Postal Service to prefund retiree benefits
