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Here's the relevant data: [The USPS's] unfunded liability grew 76% between 2007 and 2015, to $125.2 billion. The Tax Foundation, a think-tank, doubts it can ev

Here's the relevant data: [The USPS's] unfunded liability grew 76% between 2007 and 2015, to $125.2 billion. The Tax Foundation, a think-tank, doubts it can ever repay this money. The service has done much to improve its financial state—hours have been cut at rural branches and it has reduced work hours by 420m since 2002, saving some $17 billion annually. It has shrunk its staff by nearly 300,000, but it still has staggering labour costs. About 80% of its budget goes to its workers. Under a law of 2006, the service has to pre-fund 75 years’ worth of health benefits for retired workers, something no other company, much less a government agency, is required to do. Privatization isn't looking too bad. I'm all for strong employee benefits and organized labor, but 75 years' pre-funded benefits for retired workers seems excessive. We might end up losing a few of the more rural branches, but the employee/employer negotiations and business model would be much more sane under a private for-profit structure.

dragonwriter 11y ago
> Privatization isn't looking too bad. I'm all for strong employee benefits and organized labor, but 75 years' pre-funded benefits for retired workers seems excessive. The whole purpose of that unique mandate is to make privatization look better by making the state of the USPS look bad.
ta0o0o0 11y ago
I'm all for strong employee benefits and organized labor, but 75 years' pre-funded benefits for retired workers seems excessive Those two things are not related. The prefunding requirement was specifically added for political reasons to screw over the Postal Service.
- roymurdock 11y ago
  So you're both [edit: all] saying that Congress is being paid (by who? UPS/Fedex?) to screw USPS over. Do you have any citations? Why wasn't this mentioned in the article if it's such a well-known scheme?
  - mmanfrin 11y ago
    So you're both saying that Congress is being paid (by who? UPS/Fedex?) Nowhere in his/her comment was anything even remotely close to what you inferred here.
  - sophacles 11y ago
    How do you get that congress was paid to make this happen? It could just be normal republican tactics for proving that government is bad by making laws to move the goalposts when things are bad.
    - roymurdock 11y ago
      Sure, it could be purely political. The bill might also be a result of regulatory capture, which is what I was suggesting and seems fairly plausible to me. And I still have yet to see any actual citations rather than speculation.
  - ta0o0o0 11y ago
    One stipulation of the PAEA has caused controversy. It stipulates that the USPS is to make payments of $5.4 - $5.8 billion into the Postal Service Retiree Health Benefits Fund, each year, from 2007 to 2016 in order to prefund 50 years of estimated costs. https://en.wikipedia.org/wiki/Postal_Regulatory_Commission https://en.wikipedia.org/wiki/Postal_Regulatory_Commission How many retirees do you know that live fifty years in retirement? If the Post office were liquidated, the retirees would be dead two decades before the mandated fund would run out. Republicans hate public services as a matter of ideology. They don't need to be paid to do this, they do it for fun.
  - dragonwriter 11y ago
    > So you're both [edit: all] saying that Congress is being paid (by who? UPS/Fedex?) to screw USPS over. I don't see anyone saying that Congress is being paid to do that. Congress has lots of members who favor privatization of government services in general and the post office in particular, but outright privatization seemed like it would have a political cost that they weren't willing to bear. So they put in that measure, with the intent of building political support for privatization over time. Whether the preference for privatization is honest ideology, corruption, or something else is its own issue. > Why wasn't this mentioned in the article if it's such a well-known scheme? The article mentions the mandate as one of the central problems facing the USPS, and the fact that it is a requirement that neither private businesses nor other public institutions face.
- crdoconnor 11y ago
  Those two things kind of are related. The prefunding requirement was added to give the impression of financial problems so as to manufacture consent for privatization among the public. A quick look around this thread demonstrates that it's mostly been a successful ploy ("Privatization isn't looking too bad."). I've no doubt that any privatization that does occur will dump these existing pension liabilities on the federal government, raise prices and strip employee benefits to the bone while jacking up executive compensation. Textbook private equity stuff. Whomever buys the USPS will get a cheap monopoly which they can milk indefinitely. This will be declared a success for the free market or something.
mmanfrin 11y ago
The prefunded benefits was a move to kill the postal service so that private companies could take over the space. If the conclusion you draw from this is "[p]rivatization isn't looking too bad", then you haven't looked at the problem.
SilasX 11y ago
I think it's the opposite: any org (private or public) should be required to pre-fund infinite years of benefits. That is, if you're compensating the employee with benefit X, you should book (the ROR-discounted present value of) that full liability now, irrespective of when you would have to eventually pay it. That one extra month of employee work earned them $100, 80 years from now? Great, that should be $0.71 less you have to spend. No 75-year cutoff. (Or 50, or 40, or 25). Any other arrangement is forcing the employee to become an investor, in which case the usual protections should attach. No company should be able to play the game of "oh, man, we totally thought we'd be making bank 40 years on, bummer we can't pay the rest of our worker's employment compensation, tough s---." And then you have situations like GM, Bethlehem Steel, etc. Why is anyone cool with "don't worry, we'll be profitable later" when it comes to worker's wages? Why do people like gambling with workers' promised benefits?
- danharaj 11y ago
  I don't see why this logic does not equally apply to debt and financing, which are the structural foundation of capitalism.
  - SilasX 11y ago
    I answered that here: >>Any other arrangement is forcing the employee to become an investor, in which case the usual protections should attach. The return is speculative? Then you're an investor. The return is part of your promised compensation package? It shouldn't be (modulo the ability to predict reasonable RoRs, etc.)
  - sophacles 11y ago
    I think there is an aweful lot of handwaving that goes on... Largely the justification for owners of equity get rewarded for taking a risk, and the employees get wages less than the full value of their output because they take no risk. If they are taking no risk, then any pension plan should also be risk free, not a hidden tie-in to the risk used to justify their pay.
- dragonwriter 11y ago
guelo 11y ago
The cynical ploy by Bush era Republicans has worked. It was a machiavellian two-for-one, destroy a public service and get people like you to blame unions for it.
kirsebaer 11y ago
> We might end up losing a few of the more rural branches In many rural "towns" the post office is basically the only public building or store, everything else is miles away. Rural post offices serve an important public function even if they are not profitable.

dragonwriter 11y ago

> Privatization isn't looking too bad. I'm all for strong employee benefits and organized labor, but 75 years' pre-funded benefits for retired workers seems excessive. The whole purpose of that unique mandate is to make privatization look better by making the state of the USPS look bad.

ta0o0o0 11y ago

I'm all for strong employee benefits and organized labor, but 75 years' pre-funded benefits for retired workers seems excessive Those two things are not related. The prefunding requirement was specifically added for political reasons to screw over the Postal Service.

roymurdock 11y ago
So you're both [edit: all] saying that Congress is being paid (by who? UPS/Fedex?) to screw USPS over. Do you have any citations? Why wasn't this mentioned in the article if it's such a well-known scheme?
- mmanfrin 11y ago
  So you're both saying that Congress is being paid (by who? UPS/Fedex?) Nowhere in his/her comment was anything even remotely close to what you inferred here.
- sophacles 11y ago
  How do you get that congress was paid to make this happen? It could just be normal republican tactics for proving that government is bad by making laws to move the goalposts when things are bad.
  - roymurdock 11y ago
    Sure, it could be purely political. The bill might also be a result of regulatory capture, which is what I was suggesting and seems fairly plausible to me. And I still have yet to see any actual citations rather than speculation.
- ta0o0o0 11y ago
  One stipulation of the PAEA has caused controversy. It stipulates that the USPS is to make payments of $5.4 - $5.8 billion into the Postal Service Retiree Health Benefits Fund, each year, from 2007 to 2016 in order to prefund 50 years of estimated costs. https://en.wikipedia.org/wiki/Postal_Regulatory_Commission https://en.wikipedia.org/wiki/Postal_Regulatory_Commission How many retirees do you know that live fifty years in retirement? If the Post office were liquidated, the retirees would be dead two decades before the mandated fund would run out. Republicans hate public services as a matter of ideology. They don't need to be paid to do this, they do it for fun.
- dragonwriter 11y ago
  > So you're both [edit: all] saying that Congress is being paid (by who? UPS/Fedex?) to screw USPS over. I don't see anyone saying that Congress is being paid to do that. Congress has lots of members who favor privatization of government services in general and the post office in particular, but outright privatization seemed like it would have a political cost that they weren't willing to bear. So they put in that measure, with the intent of building political support for privatization over time. Whether the preference for privatization is honest ideology, corruption, or something else is its own issue. > Why wasn't this mentioned in the article if it's such a well-known scheme? The article mentions the mandate as one of the central problems facing the USPS, and the fact that it is a requirement that neither private businesses nor other public institutions face.
crdoconnor 11y ago
Those two things kind of are related. The prefunding requirement was added to give the impression of financial problems so as to manufacture consent for privatization among the public. A quick look around this thread demonstrates that it's mostly been a successful ploy ("Privatization isn't looking too bad."). I've no doubt that any privatization that does occur will dump these existing pension liabilities on the federal government, raise prices and strip employee benefits to the bone while jacking up executive compensation. Textbook private equity stuff. Whomever buys the USPS will get a cheap monopoly which they can milk indefinitely. This will be declared a success for the free market or something.

mmanfrin 11y ago

The prefunded benefits was a move to kill the postal service so that private companies could take over the space. If the conclusion you draw from this is "[p]rivatization isn't looking too bad", then you haven't looked at the problem.

SilasX 11y ago

I think it's the opposite: any org (private or public) should be required to pre-fund infinite years of benefits. That is, if you're compensating the employee with benefit X, you should book (the ROR-discounted present value of) that full liability now, irrespective of when you would have to eventually pay it. That one extra month of employee work earned them $100, 80 years from now? Great, that should be $0.71 less you have to spend. No 75-year cutoff. (Or 50, or 40, or 25). Any other arrangement is forcing the employee to become an investor, in which case the usual protections should attach. No company should be able to play the game of "oh, man, we totally thought we'd be making bank 40 years on, bummer we can't pay the rest of our worker's employment compensation, tough s---." And then you have situations like GM, Bethlehem Steel, etc. Why is anyone cool with "don't worry, we'll be profitable later" when it comes to worker's wages? Why do people like gambling with workers' promised benefits?

danharaj 11y ago
I don't see why this logic does not equally apply to debt and financing, which are the structural foundation of capitalism.
- SilasX 11y ago
  I answered that here: >>Any other arrangement is forcing the employee to become an investor, in which case the usual protections should attach. The return is speculative? Then you're an investor. The return is part of your promised compensation package? It shouldn't be (modulo the ability to predict reasonable RoRs, etc.)
- sophacles 11y ago
  I think there is an aweful lot of handwaving that goes on... Largely the justification for owners of equity get rewarded for taking a risk, and the employees get wages less than the full value of their output because they take no risk. If they are taking no risk, then any pension plan should also be risk free, not a hidden tie-in to the risk used to justify their pay.
dragonwriter 11y ago

guelo 11y ago

The cynical ploy by Bush era Republicans has worked. It was a machiavellian two-for-one, destroy a public service and get people like you to blame unions for it.

kirsebaer 11y ago

> We might end up losing a few of the more rural branches In many rural "towns" the post office is basically the only public building or store, everything else is miles away. Rural post offices serve an important public function even if they are not profitable.