May 20, 2020

The Postal Service Crisis and It’s Importance to Seniors


The Problem:

In 2006 Congress passed a law that imposed extraordinary costs on the U.S. Postal Service.  The Postal Accountability and Enhancement Act (PAEA) required the USPS to create a $72 billion fund to pay the cost of its post retirement health care costs, 75 years into the future.  This burden applies to no other federal agency or private corporation.

If the costs of this retiree health care mandate were removed from the USPS financial statements, the Post Office would have reported operating profits in each of the last six years.  This extraordinary mandate created a financial “crisis” that has been used to justify harmful service cuts and even calls for postal privatization.  Additional cuts in service and privatization would be devastating for millions of postal workers and customers.

In its December 2018 report, President Trump’s Task Force on the US Postal service reformed current rules related to postal retiree health benefits, calling it “part of a mandate for postal self-sustainability. However the Task Force also recognized that the aggressive and accelerated timetable for funding the mandate has proved unworkable. They call for past deficits to be restructured with the payments amortized with new actuarial calculation based on the population of employees at or near retirement age.”

While this would have a modest positive effect by spreading payments over a longer period of time, it does little to address the underlying problem caused by the USPS being burdened with a mandate that no other federal agency or private corporation faces.

The Heroes Act, passed by the House on Friday, included $25 billion in assistance to the Us Postal Service, which is expected to run out of money by late September without congressional assistance.  This despite the fact that without the PAEA the Postal Service would be operating in the black. Additionally the Heroes Act mandates universal no excuse absentee voting, meaning mail in ballots and allocating $3.6 billion in additional funding to state election officials to prepare their states for holding elections in the middle of the current pandemic.  The President has threatened to veto any bill giving or loaning money to the postal service until they raise their prices on package and shipping rates by approximately four times.  Trump claims that  his enemy Jeff Bezos, CEO of Amazon and the Washington Post is taking advantage of the Post office and that’s why the USPS must increase prices on packages.

Who Would be Impacted if the Postal Service Were to Fail

1.    In this crisis it is the lone government agency that visits our home.  With stores shut down the USPS is delivering food, clothing distance schooling materials for children, prescription drugs.  Pri

2.    Private delivery (For Profit) companies move a lot of packages but don’t go to every household especially rural delivery.

3.    If the USPS went under and without the reasonably priced competition the private delivery companies could raise their prices and still not deliver 6 days a week or to sparse  rural areas. This would impact the consumers to which the mail is critical (Seniors, poor people etc.)

4.    Mail in ballots during the pandemic.

5.    The postal service delivered 1.2 billion prescriptions in 2019 including close to 100% of the prescriptions from the VA.  Seniors especially depend on the mail for their prescriptions.

6.    A significant percentage of seniors do not have a computer or e mail and rely on the mail for the census, bills and all other communication.

7.    It would make a large impact on unemployment as the US Postal Service employs 630,00+ people and 100,000 military and veterans.


1.    Repeal the pretending mandate and allow the USPS to use accumulated post-retirement reserves to fund future pay as you go costs.

2.    Adopt generally accepted accounting principles (GAAP) as set forth by the financial accounting standards Board for determining liabilities.

3.    Medicare Integration for future postal retirees.

4.    Eliminate the requirement to invest assets solely in Treasury bonds

All NYSARA members should click on the link below

NYSARA members should consider writing a letter to the editor or op ed on this subject and identify yourself as a member of the NYS Alliance for Retired Americans.

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