LETTER TO THE EDITOR: Healthy Postal Service up to Congress

OPINION:

Your editorial “Delivering debt” (Jan. 3), about the long-term funding of health benefits of postal retirees, suggests that the Postal Service sought to “hide this mound of debt” and seeks to “push off” this problem to another day. The opposite is true.

First, to correct the record, the Postal Service has accumulated $41 billion of net losses, not debt as stated in the editorial, over the last six fiscal years. This is due mostly to $32 billion of congressionally mandated expenses for prefunding retiree health benefits. Our debt level with the U.S. Treasury has in fact increased by $13 billion in those six years, due to the retiree health prefunding obligations, less operating funds generated prior to the recession. While we currently have $94 billion of obligations for retiree health benefits, you neglected to note that we also separately funded 49 percent of that obligation, or $46 billion. This is a position much better than the rest of the federal government which has not separately funded any of its retiree health obligations of $222 billion.

For the past several years, the Postal Service has strongly advocated for federal legislation that would reform its business model and provide greater flexibility to control costs, generate additional income, and operate with fewer constraints. Under the right legal framework, the Postal Service could quickly return to profitability, long-term financial stability, and meet all of its obligations to retirees.

A vital component of the Postal Service’s future plan is to sponsor our own health care program, independent of other federal health insurance programs. A Postal Service-sponsored health care program could achieve over $7 billion of projected annual savings, and it would allow for the elimination of the retiree health benefit prefunding obligations imposed by Congress in 2006. However, to achieve these objectives, legislation is required to transfer current retirees into the Postal Service-sponsored health care program.

The funding of long-term health benefits can be managed effectively, but not under the current set of laws — especially those that require excessively large $5.5 billion annual prepayments, along with the payment of annual retiree health premiums of $2.6 billion.

The Postal Service need not become a burden to the taxpayer — and such an outcome is entirely avoidable — if the new Congress acts to enable greater flexibility in the postal business model.

Ronald A. Stroman

Deputy Postmaster General

Washington