Statement from R Street’s Kevin Kosar on HR. 2382, the USPS Fairness Act
The Postal Service currently has more than $70 billion in unfunded health benefits. These are benefits the Post Office promised to its workers.
In 2006, Congress saw this looming fiscal crisis, and took action to head it off. Congress directed the Postal Service to set aside funds to cover the costs of these benefits. Which the USPS did for a few years, and then the Postal Service chose to violate the law and quit paying into the retiree health benefits fund. The Postal Service has not paid into the Retiree Health Benefits Fund since 2010.
Which is terrible for postal workers. The GAO has deemed the retiree health benefits fund to be in “poor” health, and points out that the fund will run out of money in 10 years. When that happens, the U.S. taxpayers will be forced to bail out the agency.
H.R. 2382 does nothing to reduce the Post Office’s $70 billion obligation to postal workers. Astonishingly, H.R. 2382 would wave the problem away, and tell the Postal Service, “It is o.k. to not set aside funds to cover your workers’ healthcare benefits. And go ahead and continue to drain money from the retiree health benefits fund.” This is fiscally reckless. And, make no mistake—abolishing the retiree health prefunding requirement will do nothing to improve the USPS’s cashflow or actual finances. Nothing.
The House of Representatives would better serve the public if spent its valuable time on legislation that addressed the causes of the USPS’s troubles: falling revenues due to a 30% drop in mail volume and rising annual operating costs due to high labor costs and all sorts of antiquated mandates.
—Kevin R. Kosar, R Street Institute senior fellow (2014-present); Congressional Research Service analyst (2003-2014)