Taxpayers fund USPS mess
The March 11 letter “Stamp out falsities” is flat wrong in claiming that the taxpayer is not funding the massive operating losses of the Post Office. Since the USPS was reorganized in 1971, it has ran up of an accumulated operating loss of $37.9 billion through fiscal 2012. At the end of fiscal 2012, USPS owed the Federal Finance Bank $15 billion.
In addition to this “bank” debt, the USPS also had an unfunded retirees health insurance liability of $11.2 billion plus other significant unfunded liabilities for workers compensation and various contractual benefits.
Excluding the GAAP mandated accrued expense for retiree benefits and workers compensation in 2012 which every corporation in the U.S. is required to record, the USPS would have had an operating loss of $2.4 billion in 2012. With this kind of operating performance, how is the USPS going to repay the Federal Finance Bank let alone meet the unfunded benefit obligations? When it can’t, the taxpayers will have to pick up the tab.
The real problem of the USPS profit model is that the average annual total wage and benefit compensation of USPS workers is nearly double that of their competitors, FedEx or UPS.