Postal Service Follies: It’s No Laughing Matter –Michelson

One thing is certain, though. With another $9 billion operating loss expected for fiscal 2011 and a large prepayment soon due for its retiree health care plan, the USPS is on the verge of insolvency. Congress and the White House most likely won’t let that happen, but Congress itself is also a major source of the problem. For instance, a law passed in 2006 mandates that the USPS alone prefund much of its retiree health care obligations. The agency also claims it’s been required to overpay into its pension plans since the 1970s. And, as the postal expert blogger Dead Tree Edition points out, Capitol Hill doesn’t want to eliminate the existing health care prefunding requirement because it serves as “an accounting trick used to understate the size of the federal budget deficit.”