They can’t pay their bills and they’re about to default at midnight. You can blame e-mail. You can blame the rise of private carriers like UPS and FedEx. You can blame the higher cost of doing basically anything in this country.
You can place the blame on the rightful owners: Congress. Because Congress is a shitbag and they can’t stand to see a well-oiled machine doing its thing without stepping in and fucking it all to hell.
So, I remember hearing something about this $5billion-loan deadline a few months ago, but it slipped my mind until I was browsing the HuffPo today and realized the deadline is today.
Postal Service To Default On $5.5 Billion Payment As Congress Heads Into Recess
Posted: 07/31/2012 4:33 pm
At midnight Wednesday, the U.S. Postal Service is expected to default on a multi-billion dollar payment owed to the Treasury, highlighting financial struggles that could affect not only mail service but hundreds of thousands of jobs.
The agency’s failure to make good on a $5.5 billion payment toward retiree health benefits comes as no surprise, and the default won’t have any immediate effects on the postal service’s day-to-day operations, the agency assured in a statement. But the missed payment — reportedly the first of its kind in the post office’s history — will no doubt ramp up the debate over how best to address the agency’s growing red ink.
On Tuesday, some proponents of reform blamed not the postal service but Congress itself for the default, citing a controversial 2006 law that increased the agency’s financial obligations and lawmakers’ failure so far to pass legislation this session that would address the agency’s problems.
“The word ‘default’ sounds ominous, but in reality this is a default on the part of Congress,” Fredric Rolando, president of the National Association of Letter Carriers union, said in an email to HuffPost.
Under the law passed in 2006, the postal service must pay at least $5.5 billion a year into a retiree health benefit fund, a steep “prefunding” requirement that doesn’t apply to normal corporations. Although the agency has suffered a significant drop in first-class mail over the last five years, the prefunding payments have accounted for most of the postal service’s losses in recent quarters.
Let me spell out for you how Congress screwed the Post Office.
Ok. Most government employees have 7% of their earnings taken away and given to the Civil Service Retirement System. That’s your retirement healthcare money when you’re too old to do whatever you used to do. The Postal Service used to contribute to the fund as well until one day Congress looked at them and said, “Why y’all got so much money? Y’all got too much. Gimme some.”
They nixed the Postal Service contribution to the retirement fund and told them that they could no longer operate at a surplus, using their extra money to pay down debts. Any surplus money, from now on, had to go toward the Postal Service Retiree Health Benefit Fund. Ok, so the Post Office has to fund its employees retirement instead of going through the CSRS. That’s fine…
Except Congress told the Post Office they needed to pre-fund 75 years worth of employee benefits. And they only have 10 years to do it. Why these random arbitrary numbers? Nobody knows. But clearly they got screwed. They essentially had 10 years to pay for expenses that haven’t happened yet, and to pay them seven times over. That is crazy. And you know it’s crazy and random because no other government agency has been ordered to do anything like that.
This was in 2006. Five years later in 2011, the Postal Service had managed to save up $6 billion dollars for this crazy fund. But they had $8 billion in debts that they couldn’t pay back because every extra dime was going to future retirees. They stopped making their weekly $115 million dollar payments to the government, and now their lump sump $5 billion dollar payment is due today.
I know what a bill collector sounds like. They will go HAM over a few hundred dollars. I would not want to be Mr Post Office Head dodging those government calls, deleting voicemails all day with some angry black woman screaming “Where our money at? You owe us $5 billion dollars! You better have a check on the way or we are repossessing your Ford Escort!”
Way to go Congress. You guys are awesome.