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FRONT PAGE CONTRIBUTOR

Another Capitulation on Postal “Reform”

As we’ve noted in recent weeks, there is an effort to bail out the Postal Service with phony accounting measures.  Democrats are currently voting on amendments to  a bailout bill (S. 1789) that leaves taxpayers on the hook, without reforming the USPS with structural changes that the Postmaster General himself supports.

This bill will offer a backhanded channel to grant the USPS $41 billion from the Treasury.  This is accomplished in two ways.  First, the bill would rebate $11.1 billion in “overpayments” to the Treasury.  The problem is that these are not overpayments. Last year, the GAO ruled that the Postal Service was wrong in their assertion that they overpaid for employee retirement benefits. After all, like anyone who pays a fixed amount into a pension fund with a variable rate of interest, there are ups and downs depending on the market. As such, any money recouped from the Treasury would engender more taxpayer funding.

Second, this bill would re-amortize the entire prefunded payment structure, denying the Treasury of nearly $30 billion. Supporters of the bill refer to it as an intra-governmental transfer. In reality, it is a backhanded bailout.
Even the Postmaster General, Patrick Donahoe, wants to reform the Post Office and cut $22 billion in costs by closing offices and ending Saturday delivery.  This bill precludes those reforms and ensures that the USPS will remain insolvent, exposing taxpayers to future bailouts.

Earlier in the day, Senator Sessions tried to raise a point of order against the bill, noting that it would violate the Budget Control Act by increasing the debt through reduced funding in the treasury.  This is yet another example where Republicans could have blocked a bad piece of legislation by denying Democrats the 60 votes they needed to waive the point of order.  But with the help of 9 Republicans, they defeated the point of order and proceeded with debate on the bill that will likely pass.

Later on, Senator McCain proposed a substitute amendment (S. 1625), which would create a new postal oversight board (similar to BRAC)  to close $3 billion worth of facilities over a two-year period and seize financial authority over the Postal Service if it defaults with more than a $2 billion deficit for more than two years.  It would also allow them to make reforms, such as ending Saturday delivery.  This will ensure that the USPS either succeeds on its own merits or becomes a private entity – free of government regulations, but also free of its government-sponsored monopoly on first class mail.  The bill closely mirrors the Issa-Ross bill in the House.  Yet, once again 16 Republicans joined with Democrats to defeat this modest reform bill.

This is going to be a long week on the Hill….

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