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The Postal Service is in trouble because of a Bush‐era (2006) law that requires the USPS to massively prefund the cost of retiree health benefits over the next 75 years in just 10 years’ time. This cost covers not only current employees, but employees who have yet to be hired – and it is on top of the cost for health benefits for current retirees. No other company or agency in America is required to pre‐fund future retiree health benefits. No rational company would choose to make pre‐funding future retiree health benefits the highest corporate priority in today’s economy – and no company would use all its borrowing capacity to do so. But that is precisely what the Postal Service has been forced to do. As a result, it will soon exhaust its $15 billion borrowing authority ‐‐ a line of credit established in 1970 to permit the USPS to invest in its retail and mail processing networks and to keep its huge vehicle fleet up to date. In 2005, the Postal Service did not even have to use its borrowing authority. It had no outstanding debt; today it has $13.2 billion in debt. Virtually all this debt has been used to finance the pre‐funding of retiree health benefits ‐‐ not to restructure the Postal Service’s network of facilities, or to replace its old vehicle fleet, or to invest in new products and services to meet the emerging needs of the nation’s economy. No other federal agency in any of the three branches of government is required to pre‐fund future retiree health benefits. Congress mandated prefunding for the USPS, but it does not pre‐fund and none of its special agencies ‐‐ the General Accountability Office, the Congressional Research Service, the Congressional Budget Office or the Library of Congress – do either. The USPS is financially self‐sufficient. It pays for its operations through the sale of postage and has not received any taxpayer subsidy since 1982. In 1971, before postal reorganization took effect, Treasury appropriations covered nearly 25% of the P.O.D.’s budget. In today’s dollars, that would cost taxpayers approximately $16.25 billion. So postal reorganization has saved taxpayers tens of billions of dollars since 1970. The Postal Service delivers 40% of the world’s mail Critics complain that labor costs make up a higher percentage of total USPS costs (80%) than they do in the private companies (50%‐65%). But the comparison is misleading. The USPS is a universal service provider of basic services that requires daily delivery to 7 ‐8 times as many addresses each day than the private companies, which focus on parcels and freight services that are targeted to a much narrower range of recipients. The USPS function is inherently more labor intensive. Indeed, the Postal Service’s last mile delivery network is so efficient that the private companies rely on it to reach places they don’t serve. The Parcel Select product allows private companies to drop ship to post offices for last mile delivery by letter carriers – the Fed Ex version of this service, FedEx SmartPost is the fastest growing division within the Memphis‐based company. Facts...they are a terrible thing. Freepers with USPSDS should be ashamed of their ignorance. You look like a bunch of knee-jerk libs. Astounding! Conservatives claim to be against government mandates. Wonder what the response would be from Freepers if Obama mandated all companies with more than 250 employees follow the same mandate the USPS must follow on prefunding. Lets see any other company that can survive that mandate!

So what your saying is,
It's Bush's fault.

Thank you for this post. Lots of information distributed all over boiled down into one post. WAY too much knee-jerking on FreeRepublic when it comes to the Post Office.

570,000 employees and they don’t know how to balance their budget.

Thank you. A Caller to Bill Bennett's program noted this, but besides the pre-funding were their some benefit issues they were trying to solve or pension benefits? I seem to remember that.

What was the reason for this 2006 law?

Why has this account been suspended?