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It's the usual story: capture of the USPS by its unions Except, you know, not really. You might want to read this: http://www.buffalonews.com/editorial-page/vi

It's the usual story: capture of the USPS by its unions Except, you know, not really. You might want to read this: http://www.buffalonews.com/editorial-page/viewpoints/article476402.ece http://www.buffalonews.com/editorial-page/viewpoints/article... Especially this bit: What about those news reports of multibillion losses? Well, the $20 billion in losses over the last four years has nothing to do with what you’ve been told about a failing business model or obsolete mail. Here’s the real skinny: In 2006, Congress mandated that the Postal Service prefund future retiree health benefits for the next 75 years, and do so within a decade—something no other public agency or private firm does. The resulting annual payments run $5.5 billion a year, costing the Postal Service $21 billion since 2007. That’s the difference between a positive and a negative balance sheet, as it would be for virtually any entity facing a similar burden — if any did. Remove that unreasonable obligation and the Postal Service would have been profitable.

nhebb 15y ago
But the unions do have influence. The Business Week article is from May. A few days ago, the USPS proposed a plan that would break existing labor contracts in order to keep it solvent. The plan includes cutting the workforce by 120,000 and running their own health care plan. Naturally, the service unions opposed it, making congressional highly approval doubtful. Here's the related article from the Washington Post: http://www.washingtonpost.com/politics/usps-proposes-cutting-120000-jobs-pulling-out-of-health-care-plan/2011/08/11/gIQAZxIM9I_print.html http://www.washingtonpost.com/politics/usps-proposes-cutting...
- ubernostrum 15y ago
  There's a difference between "influence" and "bad influence", and between "influence" and "running it into the ground". The union quite reasonably objects to cutting 120,000, because there's no need to. The postal service could be quite solvent if Congress -- which is not the union and not, so far as I know, acting at the union's behest -- would take away the idiotic mandate to fund 75 years worth of benefits. In other words, this is something the union should oppose.
three14 15y ago
I don't get it. Why is it unreasonable? If I promise to pay somebody $40,000 every year after they retire, but I don't set aside money to do it, you can guarantee that down the road, I'll come crying to the government to get them to pay for it. It's not like they have to set aside the future value of that promise, just the present value - in other words, the amount that they're effectively promising to the employees today. It should be considered fraud if they don't do this.
- deleted 15y ago
  [deleted]
- _delirium 15y ago
  That's a reasonable argument for a general change in accounting standards, requiring all pension plans to be pre-funded. Specifically requiring the USPS and nobody else to do that, though, feels more like something political is going on.
  - three14 15y ago
    ...and I strongly support the general accounting change, particularly for government or semi-governmental entities that might be counting on taxpayers footing the bill they run up. Just because USPS suffers by having to do something reasonable because of politics doesn't mean that it's a bad idea.
    - ubernostrum 15y ago
      It's unreasonable to impose a much tougher standard on one and only one organization, even if you think that standard would be good if applied to everyone.
      - three14 15y ago
        Even if true that it's only the USPS, and yummyfajitas implies that it's actually a broader requirement, here it's a difference between a mistake and not making a mistake. It's not simply an accounting treatment. It's not a defense of the USPS to suggest they should be allowed to make the same mistake that other companies make.
loso 15y ago
Exactly. I worked for the USPS for a short time 13 years ago & my dad still does. A lot of the postal workers want to get rid of this clause as well. They realize that it is a giant albatross hanging over their necks and they are willing to work something out. It is Congress that will not allow it.
patio11 15y ago
If a) you're borrowing $10 billion from taxpayers, b) you are telling future retirees that you're going to give them gold-plated pensions, and c) you claim to be profitable, you are lying. My heuristic as to who is being lied to is simple: you guys actually get a check every month and I don't? Drats, you're lying to me.
- jcitme 15y ago
  The problem is, they don't HAVE to A) if they were not forced to prefund. I don't see the problem with B) and C). Just because you are sore, you don't have to hate on a profitable company.

nhebb 15y ago

But the unions do have influence. The Business Week article is from May. A few days ago, the USPS proposed a plan that would break existing labor contracts in order to keep it solvent. The plan includes cutting the workforce by 120,000 and running their own health care plan. Naturally, the service unions opposed it, making congressional highly approval doubtful. Here's the related article from the Washington Post: http://www.washingtonpost.com/politics/usps-proposes-cutting-120000-jobs-pulling-out-of-health-care-plan/2011/08/11/gIQAZxIM9I_print.html http://www.washingtonpost.com/politics/usps-proposes-cutting...

ubernostrum 15y ago
There's a difference between "influence" and "bad influence", and between "influence" and "running it into the ground". The union quite reasonably objects to cutting 120,000, because there's no need to. The postal service could be quite solvent if Congress -- which is not the union and not, so far as I know, acting at the union's behest -- would take away the idiotic mandate to fund 75 years worth of benefits. In other words, this is something the union should oppose.

three14 15y ago

I don't get it. Why is it unreasonable? If I promise to pay somebody $40,000 every year after they retire, but I don't set aside money to do it, you can guarantee that down the road, I'll come crying to the government to get them to pay for it. It's not like they have to set aside the future value of that promise, just the present value - in other words, the amount that they're effectively promising to the employees today. It should be considered fraud if they don't do this.

deleted 15y ago
[deleted]
_delirium 15y ago
That's a reasonable argument for a general change in accounting standards, requiring all pension plans to be pre-funded. Specifically requiring the USPS and nobody else to do that, though, feels more like something political is going on.
- three14 15y ago
  ...and I strongly support the general accounting change, particularly for government or semi-governmental entities that might be counting on taxpayers footing the bill they run up. Just because USPS suffers by having to do something reasonable because of politics doesn't mean that it's a bad idea.
  - ubernostrum 15y ago
    It's unreasonable to impose a much tougher standard on one and only one organization, even if you think that standard would be good if applied to everyone.
    - three14 15y ago
      Even if true that it's only the USPS, and yummyfajitas implies that it's actually a broader requirement, here it's a difference between a mistake and not making a mistake. It's not simply an accounting treatment. It's not a defense of the USPS to suggest they should be allowed to make the same mistake that other companies make.

loso 15y ago

Exactly. I worked for the USPS for a short time 13 years ago & my dad still does. A lot of the postal workers want to get rid of this clause as well. They realize that it is a giant albatross hanging over their necks and they are willing to work something out. It is Congress that will not allow it.

patio11 15y ago

If a) you're borrowing $10 billion from taxpayers, b) you are telling future retirees that you're going to give them gold-plated pensions, and c) you claim to be profitable, you are lying. My heuristic as to who is being lied to is simple: you guys actually get a check every month and I don't? Drats, you're lying to me.

jcitme 15y ago
The problem is, they don't HAVE to A) if they were not forced to prefund. I don't see the problem with B) and C). Just because you are sore, you don't have to hate on a profitable company.