CBO Report Proves Senate Postal Reform Bill Falls Short

Last week, Heritage Action sent out a key vote alert opposing the 21st Century Postal Service Act of 2011 (S. 1789). Amazingly, the bill doesn’t even take into consideration some the reforms that the United States Postal Services (USPS) requested, and because of this, we, the taxpayers, would be forced to bailout the agency to the tune of $41 billion.

Instead, it mandates the USPS to continue Saturday delivery for two more years and forces them to follow lengthy procedures in order to close processing facilities. In an effort to remain solvent, the USPS wanted to end Saturday Delivery sooner and trim the workforce by about 220,000 employees, close 3,700 local post offices and 252 processing centers.

A CBO cost analysis of the Senate’s postal bill reveals the USPS would lose $6.3 billion over the next decade. The bill allows the USPS to spread their prepayment of retiree health care costs over 40 years, instead of 10 years. It also gives them back $7 billion which the USPS claims to have overpaid in order to incentivize retirement. This, the CBO says, would lead to the agency neglecting its need to reduce costs (i.e., cut spending).

The USPS is supposed to support itself with “products and services,” like stamps and postage. However, because of the exorbitant cost of pensions and benefits the post office regularly runs out of money and needs to be bailed out by taxpayers. In the era of bailout fatigue, such expenditures are becoming unacceptable to the American peopl.

You may have seen the commercials paid for by the American Postal Workers Union (APWU) that claims that the post office is funded solely by stamps and postage. This should have raised some eyebrows, because we all know that federal tax dollars go to the post office.

The USPS is part of the government; the bailout would come from other government departments, diverting funds from other programs in order to pay for the bloated pensions of postal workers.

We can’t afford to give the USPS a $41 billion bailout when there are steps that the Senate could be taking to fix the agency that would not require such a bailout.

The CBO estimated a deficit in the Senate bill. Conversely, the CBO report for the House postal bill showed that it would save $18.5 billion over the next decade. Unfortunately, the House bill is not perfect either: it has been amended to partially include the bailout.

The Senate should listen to the USPS’ suggestions, and find a way to reform the agency that won’t result in a taxpayer-funded bailout.

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