Another view...not from mother jones. The key term here..."unfunded obligation."
The rest of the gov't has an $860B pot of money - that makes $79M in interest per day - that serves to fund Federal retirements. Before the law, OPM had to constantly borrow from that fund to pay the Postal retirees.
I agree the Postal Service should be made profitable...but before this it was being run like Greece. Greece had to eventually get austerity, and so did the Post Office.
The Truth About The Post Office's Financial Mess
http://www.cnbc.com/id/45018432
Excerpt....
Thanks to these prefunding payments, the Postal Service has greatly reduced its unfunded obligations for retiree health benefits. At the end of fiscal year 2010, these obligations were under $49 billion – a substantial sum, but much more manageable. If the Postal Service continues making its prefunding payments, its unfunded obligations for retiree health benefits will be around $33 billion by the end of the decade. And the postal service will be on course to pay these benefits over time," a Congressional insider explained.
But this pre-funding has become a lightning rod of controversy.
Members of the postal workers union say the pre-funding requirement has created a fiscal mess. Some people have even claimed that law has the effect of requiring the postal service to fund retirement obligations for people who are not yet employed by the USPS--potential future employees.
No one ever intended the law to work that way. And, in fact, it doesn't. Although accounting rules require the postal service to calculate future liabilities, including those for projected future employees, the law only requires pre-funding of obligations to actual current and past employees.
LL: So bottom line, the unions claim of the postal service pre-funding pensions for future workers is false?
Chairman Issa: Absolutely false. The non-partisan Congressional Research Service recently found that pre-funding requirements match Congress’ intent when they were enacted in 2006. The intent is to ensure that the growing unfunded liability for retiree health care for current employees is covered. These employees negotiated for and earned these benefits with their work, so USPS should pay for them.
Likewise, USPS must be self-sustaining, and not funded by the taxpayers. Prefunding is a prudent measure to protect employee’s earned benefits and taxpayer money.
LL: Are the postal unions resorting to fear tactics and myths to scare Americans about what is really going on?
Chairman Issa: Postal workers who have been writing their members of Congress or protesting are just responding to the information that they have been given by their own union leadership. They have been told this money is not covering their benefits, but in fact covering benefits of people who haven’t been born yet. That’s absolutely false.
They have been told there is an overpayment in another pension account that could cover their retiree health care benefits. The non-partisan Government Accountability Office, which audits financial reports for the entire federal government, has weighed in to clearly state that allegation is false. They have been led to believe outrageously false things about Congress “stealing” their money to pay for other things.
The truth will get out there and postal union members will finally understand we’re looking out for them as well as the taxpayer. Postal reform is necessary to secure their earned benefits.
