A first-class stamp is more costly than ever. The federal government recently provided a $10 billion loan to the Postal Service (USPS), as part of an important pandemic relief package.
Now, Congress might force taxpayers to cover the cost of retired postal workers’ health care—something for which the supposedly self-financing agency has always been responsible.
This week, with minimal fanfare and widespread bipartisan support from the House of Representatives, the House of Representatives passed the Postal Relief Act of 20022. This bill will allow retired postal workers to be enrolled in the already stressed Medicare system. It also excuses the USPS from having to pay for health care benefits for their retirees.
The Washington PostEuphemistically, the arrangement can be described as “relieving.” [USPS]”of tens to billions in liabilities”, the bill says. It also wipes away $57billion of future USPS healthcare costs that the USPS was expected to be responsible for. Of course, those liabilities will still exist—retired postal workers will get routine medical care, require hospitalization, receive prescriptions, and the like—but those costs will no longer show up on the service’s ledger. The bill will now be paid by the American rest of the workforce via payroll taxes.
The USPS needs a major overhaul. It’s been hemorrhaging money for years—more than $78 billion in red ink since 2007—thanks to a business model that the Government Accountability Office has termed “unsustainable.”
However, it is not clear how this new plan will resolve the root causes. The USPS and the union that represents postal workers seem more interested in shifting costs onto taxpayers—something they are also trying to do with the USPS’s massive pension obligations—than make the changes necessary to keep this monopolistic, archaic government service functional.
A lot of the USPS’s problems are due to “inability to adjust to changing markets and congressional impediments” wrote conservative and free market organizations in opposition to the Postal Service Reform Act. Many of the reforms proposed in H.R. USPS’s 756 move it away from its core mission and shifts money onto Americans. It also fails to fix many of the fundamental problems that face the Postal Service.
As There are reasonsChristian Britschgi, a journalist at’s, wrote last year that the idea of putting retired postal workers in Medicare is not logical. Britschgi explained that the USPS should stop putting money down now to provide benefits for tomorrow’s retired postal workers. This would create obvious problems both for the pensions of those employees and for taxpayers. They could have to foot the bill.
It’s even more true, as Medicare has also been struggling financially. Parts of the program are on track to be insolvent—meaning that Medicare will be unable to pay the full cost of promised benefits—in less than five years.
Congress’ plan for shifting workers from the USPS to Medicare wouldn’t be fair to call the reorganization of deck chairs on the Deck. Titanic. No, it’s more like moving deck chairs from the TitanicThe Lusitania.