The House should take action regarding USPS troubles
Anyone at the Treasury Department waiting for a $5.6 billion check in the mail from the U.S. Postal Service last week was disappointed. The USPS defaulted on the payment, the second time this year it has done so on a major payment due to the Treasury, for a total of $11.1 billion.
In fairness, the USPS legitimately could have marked the Treasury's demand for payment: "Return to Congress."
Last year postal officials notified Congress that it would not be able to make a payment to the Treasury by the due date of Sept. 30, 2011. Congress pushed back the due date to Aug. 31 of this year as it worked on legislation to resolve some of the systemic financial problems afflicting the USPS. Congress missed its own deadline, failing to adopt any reform legislation. The USPS then missed the 2011 payment in August and, a month later, the 2012 payment.
Those missed payments are the largest components of $15 billion deficit the service reported at the end of the federal fiscal year, Sept. 30.
Now, the USPS has a $1.5 billion workers compensation insurance payment due to the Labor Department, which it says it will make. Doing so, however, will leave the service with a $100 million cash shortage, which it hopes to make up over the impending holiday season.
The post office faces obvious business problems because of the conversion of so much correspondence and bill-paying to online systems.
But its most pressing problem is the result of a 2006 law requiring the USPS to pre-pay retiree health benefits 75 years into the future. That is meant to preclude deficits down the road but no other federally related enterprise faces such a mandate, and the USPS clearly can't meet it.
The Senate passed a bill in April that would mitigate those payments and return to the USPS, for operations, about $11 billion that it has overpaid into a pension fund. The bill would not, however, allow the USPS to carry out all of its planned closings of distribution centers, nor would it allow the service to end Saturday delivery to save cash.
That bill is imperfect yet helpful. The House has failed to act on its version. It should do so immediately after the elections to enable the USPS to tighten its operations and end unrealistic and unfair up-front obligations that threaten its ability to provide services.