The House of Representatives passed the bill this week with little fanfare and broad bipartisan support.
Premium postage costs more than ever, and the US Postal Service (USPS) recently received a $10 billion loan from the federal government as part of a major pandemic relief package approved in 2020.
Now Congress could force taxpayers to pay for postal workers' health care after retirement, something for which the supposedly self-funded agency has always been responsible.
With little fanfare and broad bipartisan support, the House of Representatives voted earlier this week to pass the Postal Service Relief Act of 2022. The bill draws retired postal workers into the already strained Medicare system, wanting to join or not, and forgive the USPS. for health benefits for their own retirees that they have to finance.
The Washington Post euphemistically describes the deal as "relieving [the USPS] of tens of billions of dollars in liabilities" and says the bill eliminates "$57 billion of future health care costs that the USPS is expected to pay ". Of course, those liabilities will still exist — retired postal workers get routine health care, need hospital stays, get prescriptions and the like — but those costs will no longer show up on the service's ledger. Instead, it will be the rest of the American workforce that funds Medicare through payroll taxes and foot the bill.
There is no question that the USPS needs a serious overhaul. It has lost money for years — more than $78 billion in the red since 2007 — thanks to a business model the Government Accountability Office describes as "unsustainable."
However, it is not clear how this latest plan will address the underlying problems. The USPS and the union that represents postal workers seem more interested in shifting the cost onto taxpayers -- something they're also trying to do with the USPS's huge pension obligations -- than in making the changes needed to end this monopoly and archaic to keep the government running services.
Many of the USPS's underlying problems stem from an "inability to adapt to changing markets, Congressional impediments, and union quagmires," a collection of conservative and free-market groups wrote in a letter to Congress opposing the bill. of law that reforms the USPS postal service. "Many of the H.R. 756 reforms further move USPS away from the core mission of mail delivery, unfairly shift the financial burden from the postal service to the American public, and fail to address many of the underlying problems facing USPS."
As Reason's Christian Britschgi wrote last year in a feature-length investigation into the many, many problems facing the USPS, the idea of putting retired postal workers on Medicare doesn't make much sense to anyone. “If the USPS stops paying money today to cover tomorrow's retirement benefits, there are obvious risks both for postal workers, whose pensions would be less secure, and for taxpayers, who could be asked to pay the cost of those pensions. unfunded obligations to everyone. into account," explained Britschgi.
That's doubly true, because Medicare is also on shaky ground financially. Some parts of the program are in default in less than five years, which means that Medicare will not be able to pay the full cost of promised benefits.
It would be wrong to describe Congress's plan to move underfunded USPS health care plan workers to Medicare as rearranging the deck chairs on the Titanic. No, it's more like transporting sun loungers from the Titanic to the Lusitania.
