How The GOP Broke The Post Office with GW Bush as the initial predator (1 Viewer)

[Razoo]

How George Bush broke the Post Office

what's really dragging down the Postal Service is something else entirely.


Namely, the Postal Accountability and Enhancement Act of 2006.

Passed by a Republican-led Congress and signed into law by President George W. Bush, the PAEA gave the Postal Service new accounting and funding rules for its retiree pension and health benefits. Up until 2006, the USPS funded those obligations on a pay-as-you-go-basis, pulling out of its pension fund and adding to it as retirees' costs came in. But the PAEA required the Postal Service to calculate all of its likely pension costs over the next 75 years, and then sock away enough money between 2007 and 2016 to cover most of them.

This is one of those ideas that sounds responsible on the surface but is actually pretty nuts.

Consider your average 30-year mortgage. What if you had to set aside a few hundred thousand dollars right now, enough to pay the whole thing, even if you were still going to make payments over 30 years? No one would ever take out a mortgage. That's the whole point: the costs only come in over time, and the income you use to pay them comes in over time as well. It works exactly the same for retiree pensions and benefit funds. Which is why, as economist Dean Baker pointed out to Congress, pretty much no one else does what the PAEA demanded of the Postal Service.

Meeting Congress' arbitrary mandate required putting away an extra $5.6 billion per year. "It is equivalent to imposing a tax of 8 percent on the Postal Service's revenue," Baker said. "There are few businesses that would be able to survive if they were suddenly required to pay an 8 percent tax from which their competitors were exempted."

Eventually, the burden became too great, and the USPS began defaulting on the PAEA payments in 2012. But the damage was done. The Postal Service lost $62.4 billion between 2007 and 2016, and its own Inspector General attributed $54.8 billion of that to prefunding retiree benefits. Without the PAEA, the Postal Service wouldn't be doing stellar. (Though you could plausibly blame many of its remaining struggles on the Great Recession.) But it probably would've spent at least part of the last decade making comfortable profits.

 

[Razoo]

Late last week, Trump created a task force to audit the Postal Service. "The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout," the executive order stated. The task force is supposed to deliver recommendations within 120 days, and to look into "the expansion and pricing of the package delivery market and the USPS's role in competitive markets."

The order didn't mention Amazon by name. But many observers assume the online retail giant is the target of the inquiry — and for good reason. Trump has been on a tear recently, claiming the USPS gives Amazon discounted rates for delivering its packages, and gets fleeced in the process.

Amazon relies on around 230,000 USPS workers to deliver many of its packages. As my colleague Ryan Cooper explained, the Postal Service is definitely giving the company some sort of deal, though the details are secret. Defenders point out the Postal Service is forbidden by law from charging less than the cost of delivery, though it could still be charging below-market rates.

Yet that means the real victims of this arrangement are other private businesses. The Postal Service is basically helping Amazon under-price its competitors and secure monopoly market power. But for the USPS itself, e-commerce deliveries have actually been a recent source of revenue growth. While the Postal Service can and should get a better deal from Amazon, the one it's got is working out pretty well.

How George Bush broke the Post Office

 

[aociswundumho]

Meeting Congress' arbitrary mandate required putting away an extra $5.6 billion per year. "It is equivalent to imposing a tax of 8 percent on the Postal Service's revenue," Baker said. "There are few businesses that would be able to survive if they were suddenly required to pay an 8 percent tax from which their competitors were exempted."

The post office isn't a business. It's a stupid, unnecessary government agency. It's basically a jobs program designed to flush taxpayer dollars down the proverbial toilet.

 

[Razoo]

The U.S. Postal Service is older than the country itself, delivers to 153 million homes and businesses six and increasingly seven days a week and consistently ranks as the public's most trusted federal agency.

Yet misinformation about it abounds, including in the commentary by James Gattuso about the Postal Service's recent financial report for Fiscal Year 2015. The piece painted an unrelentingly negative picture of postal finances while referring frequently to a possible taxpayer bailout.

In fact, the USPS annual report detailed not only challenges but also several highly positive trends. It illustrated that the past fiscal year yielded a $1.2 billion operating profit—the second consecutive year that revenue earned delivering the mail exceeded the costs of delivering the mail by more than $1 billion. And it's the third straight year that postal operations have been in the black—with $2.9 billion in total operating profits over that period.


All this, mind you, without a dime of taxpayer money. For decades the USPS has by law relied on the revenue it earns.

These impressive performances are no fluke; rather, they're based on structural factors. Following the worst recession in 80 years, mail fell sharply, dropping 10 percent in 2009 alone. But as the economy gradually improves, letter revenue has stabilized. Meanwhile, with online shopping growing because of the Internet, package revenue is skyrocketing—which augurs well for the future. In fiscal 2015, package revenue increased by 11.4 percent over the prior year.

The timing of the good news contained in the report couldn't be better, with the holidays approaching. The Postal Service projects the delivery of 15.5 billion cards, letters and packages from Thanksgiving to New Year's Eve—including a record 600 million packages.

It's also true that the Postal Service faces challenges; albeit not as often pictured. The major one has nothing to do with the mail and everything to do with congressional politics.

 

[What if...?]

The post office isn't a business. It's a stupid, unnecessary government agency. It's basically a jobs program designed to flush taxpayer dollars down the proverbial toilet.

Yet it is in the constitution and predates same.

As a service, not a for-profit business.

And also delivers mail to people nobody else does.

Your narrative was created to cover the sabotage of the USPS to suppress votes during a pandemic.

I simply don't understand why you're still not mad at the people who.lie to you on the daily, instead of at the folks who point it out.

 

[Craig234]

You're quite right. A couple points.

1. There's a more complicated history to the Republican Act that did so much destruction: The Post Office union SUPPORTED the act at the time, not realizing the provision about prefunding healthcare; they liked other things it did about modernizing the equipment as I understand.

2. This isn't 'one big conspiracy', it's two different ones.

The first is the Republican war on the Post Office, in order to try to destroy the largest union as an anti-worker action, and to be able to privatize it for their donors to profit.

The second is trump's specific sabotaging the Post Office's functioning for the 2020 election, trying to steal the election by taking advantage of the Pandemic making vote by mail the primary method of voting.

I'd bet money that the sham trump 'Post Office review' to address profitability will not recommend undoing the Republican prefunding sabotage, the thing that would actually help it.

 

[Razoo]

The USPS has some very cool stamps for our first class mail and some fast delivery service for our packages by way of First Class shipping = voice of experience.

 

[jotathought]

How George Bush broke the Post Office

what's really dragging down the Postal Service is something else entirely.


Namely, the Postal Accountability and Enhancement Act of 2006.

Passed by a Republican-led Congress and signed into law by President George W. Bush, the PAEA gave the Postal Service new accounting and funding rules for its retiree pension and health benefits. Up until 2006, the USPS funded those obligations on a pay-as-you-go-basis, pulling out of its pension fund and adding to it as retirees' costs came in. But the PAEA required the Postal Service to calculate all of its likely pension costs over the next 75 years, and then sock away enough money between 2007 and 2016 to cover most of them.

This is one of those ideas that sounds responsible on the surface but is actually pretty nuts.

[Removed text due to size of post]

Eventually, the burden became too great, and the USPS began defaulting on the PAEA payments in 2012. But the damage was done. The Postal Service lost $62.4 billion between 2007 and 2016, and its own Inspector General attributed $54.8 billion of that to prefunding retiree benefits. Without the PAEA, the Postal Service wouldn't be doing stellar. (Though you could plausibly blame many of its remaining struggles on the Great Recession.) But it probably would've spent at least part of the last decade making comfortable profits.

The highlighted statement is factually correct ..The Government Accountability Office published a report in 2012 discussing the financial status of the Post Office and made recommendations on alternative approaches to fund retiree health benefits. What's factually incorrect is the funding of retiree benefits was collected over the 10 year period. In reality, it is a much broader window: For the first 10 years, fixed payments amounts were collected to cover current retirees and the projected liability for current employees with a followup in 2017 to develop a 40-year amortization schedule. It's a myth that 75 years of retiree benefits were collected in the first 10 years.

Page 2: Findings

The Postal Service Retiree Health Benefits Fund (PSRHBF) covered about 49
percent of the U.S. Postal Service’s (USPS) $94 billion retiree health benefit
liability at fiscal year-end 2012. USPS’s deteriorating financial outlook, however,
will make it difficult to continue the current prefunding schedule in the short term,
and possibly to fully fund the remaining $48 billion unfunded liability over the
remaining 44 years of the schedule on which the 2006 Postal Accountability and
Enhancement Act (PAEA) was based. The liability covers the projected benefits
for about 471,000 current postal retirees and a portion of the projected benefits
for about 528,000 current employees; it does not cover employees not yet hired.
Under PAEA, USPS is responsible for contributing an additional $33.9 billion to
the PSRHBF by fiscal year 2017, including the $11.1 billion USPS has defaulted
on over the past 2 years. PAEA also requires the Office of Personnel
Management (OPM) to calculate the remaining unfunded liability in 2017 and
develop an initial 40-year amortization payment schedule. USPS, however,
projects further declines in mail volume and revenues that may continue to limit
its ability to prefund the remaining retiree health benefit liability.

Page 13: Background

Contrary to statements made by some employee groups and other stakeholders,
PAEA did not require USPS to prefund 75 years of retiree health benefits
over a 10-year period. Rather, pursuant to OPM’s methodology, such
payments would be projected to fund the liability over a period in excess
of 50 years, from 2007 through 2056 and beyond (with rolling 15-year
amortization periods after 2041). However, the payments required by
PAEA were significantly “frontloaded,” with the fixed payment amounts in
the first 10 years exceeding what actuarially determined amounts would
have been using a 50-year amortization schedule.

Status, Financial Outlook, and Alternative Approaches to Fund Retiree Health Benefits - Government Accountability Office

 

[Razoo]

How George Bush broke the Post Office

what's really dragging down the Postal Service is something else entirely.


Namely, the Postal Accountability and Enhancement Act of 2006.

Passed by a Republican-led Congress and signed into law by President George W. Bush, the PAEA gave the Postal Service new accounting and funding rules for its retiree pension and health benefits. Up until 2006, the USPS funded those obligations on a pay-as-you-go-basis, pulling out of its pension fund and adding to it as retirees' costs came in. But the PAEA required the Postal Service to calculate all of its likely pension costs over the next 75 years, and then sock away enough money between 2007 and 2016 to cover most of them.

This is one of those ideas that sounds responsible on the surface but is actually pretty nuts.

Consider your average 30-year mortgage. What if you had to set aside a few hundred thousand dollars right now, enough to pay the whole thing, even if you were still going to make payments over 30 years? No one would ever take out a mortgage. That's the whole point: the costs only come in over time, and the income you use to pay them comes in over time as well. It works exactly the same for retiree pensions and benefit funds. Which is why, as economist Dean Baker pointed out to Congress, pretty much no one else does what the PAEA demanded of the Postal Service.

Meeting Congress' arbitrary mandate required putting away an extra $5.6 billion per year. "It is equivalent to imposing a tax of 8 percent on the Postal Service's revenue," Baker said. "There are few businesses that would be able to survive if they were suddenly required to pay an 8 percent tax from which their competitors were exempted."

Eventually, the burden became too great, and the USPS began defaulting on the PAEA payments in 2012. But the damage was done. The Postal Service lost $62.4 billion between 2007 and 2016, and its own Inspector General attributed $54.8 billion of that to prefunding retiree benefits. Without the PAEA, the Postal Service wouldn't be doing stellar. (Though you could plausibly blame many of its remaining struggles on the Great Recession.) But it probably would've spent at least part of the last decade making comfortable profits.

bumper

 

[Razoo]

Yet it is in the constitution and predates same.

As a service, not a for-profit business.

And also delivers mail to people nobody else does.

Your narrative was created to cover the sabotage of the USPS to suppress votes during a pandemic.

I simply don't understand why you're still not mad at the people who.lie to you on the daily, instead of at the folks who point it out.

bumper up

 

[rickc]

The post office isn't a business. It's a stupid, unnecessary government agency. It's basically a jobs program designed to flush taxpayer dollars down the proverbial toilet.

And where did you come up with this rediculus assumption?

 

[aociswundumho]

And where did you come up with this rediculus assumption?

Well to start with, the Post Office has a government-granted monopoly and it still lost 8.8 billion dollars last year.

 

[Razoo]

How George Bush broke the Post Office.

 

[Razoo]

Well to start with, the Post Office has a government-granted monopoly and it still lost 8.8 billion dollars last year.

A monopoly EXCEPT for FEDEX, UPS ..... etc etc etc

USPS is a best bang for the buck kind of deal ......

Go buy a bunch of very cool stamps for the mail .......... to help keep hundreds od thousands on the job getting a paycheck instead of putting more people on unemployment insurance then pissing and moaning = conservatives know nothing about managing anything.

How George Bush broke the Post Office.

 

[Razoo]

18 U.S. Code § 1701. Obstruction of mails generally
U.S. Code

Whoever knowingly and willfully obstructs or retards the passage of the mail, or any carrier or conveyance carrying the mail, shall be fined under this title or imprisoned not more than six months, or both.

(June 25, 1948, ch. 645, 62 Stat. 778; Pub. L. 103–322, title XXXIII, § 330016(1)(B), Sept. 13, 1994, 108 Stat. 2146.)

 

[Razoo]

How George Bush broke the Post Office

what's really dragging down the Postal Service is something else entirely.


Namely, the Postal Accountability and Enhancement Act of 2006.

Passed by a Republican-led Congress and signed into law by President George W. Bush, the PAEA gave the Postal Service new accounting and funding rules for its retiree pension and health benefits. Up until 2006, the USPS funded those obligations on a pay-as-you-go-basis, pulling out of its pension fund and adding to it as retirees' costs came in. But the PAEA required the Postal Service to calculate all of its likely pension costs over the next 75 years, and then sock away enough money between 2007 and 2016 to cover most of them.

This is one of those ideas that sounds responsible on the surface but is actually pretty nuts.

Consider your average 30-year mortgage. What if you had to set aside a few hundred thousand dollars right now, enough to pay the whole thing, even if you were still going to make payments over 30 years? No one would ever take out a mortgage. That's the whole point: the costs only come in over time, and the income you use to pay them comes in over time as well. It works exactly the same for retiree pensions and benefit funds. Which is why, as economist Dean Baker pointed out to Congress, pretty much no one else does what the PAEA demanded of the Postal Service.

Meeting Congress' arbitrary mandate required putting away an extra $5.6 billion per year. "It is equivalent to imposing a tax of 8 percent on the Postal Service's revenue," Baker said. "There are few businesses that would be able to survive if they were suddenly required to pay an 8 percent tax from which their competitors were exempted."

Eventually, the burden became too great, and the USPS began defaulting on the PAEA payments in 2012. But the damage was done. The Postal Service lost $62.4 billion between 2007 and 2016, and its own Inspector General attributed $54.8 billion of that to prefunding retiree benefits. Without the PAEA, the Postal Service wouldn't be doing stellar. (Though you could plausibly blame many of its remaining struggles on the Great Recession.) But it probably would've spent at least part of the last decade making comfortable profits.

The GOP represents dumb ass economics .....

 

[Razoo]

How George Bush broke the Post Office

what's really dragging down the Postal Service is something else entirely.


Namely, the Postal Accountability and Enhancement Act of 2006.

Passed by a Republican-led Congress and signed into law by President George W. Bush, the PAEA gave the Postal Service new accounting and funding rules for its retiree pension and health benefits. Up until 2006, the USPS funded those obligations on a pay-as-you-go-basis, pulling out of its pension fund and adding to it as retirees' costs came in. But the PAEA required the Postal Service to calculate all of its likely pension costs over the next 75 years, and then sock away enough money between 2007 and 2016 to cover most of them.

This is one of those ideas that sounds responsible on the surface but is actually pretty nuts.

Consider your average 30-year mortgage. What if you had to set aside a few hundred thousand dollars right now, enough to pay the whole thing, even if you were still going to make payments over 30 years? No one would ever take out a mortgage. That's the whole point: the costs only come in over time, and the income you use to pay them comes in over time as well. It works exactly the same for retiree pensions and benefit funds. Which is why, as economist Dean Baker pointed out to Congress, pretty much no one else does what the PAEA demanded of the Postal Service.

Meeting Congress' arbitrary mandate required putting away an extra $5.6 billion per year. "It is equivalent to imposing a tax of 8 percent on the Postal Service's revenue," Baker said. "There are few businesses that would be able to survive if they were suddenly required to pay an 8 percent tax from which their competitors were exempted."

Eventually, the burden became too great, and the USPS began defaulting on the PAEA payments in 2012. But the damage was done. The Postal Service lost $62.4 billion between 2007 and 2016, and its own Inspector General attributed $54.8 billion of that to prefunding retiree benefits. Without the PAEA, the Postal Service wouldn't be doing stellar. (Though you could plausibly blame many of its remaining struggles on the Great Recession.) But it probably would've spent at least part of the last decade making comfortable profits.

18 U.S. Code § 1701. Obstruction of mails generally U.S. Code

Whoever knowingly and willfully obstructs or retards the passage of the mail, or any carrier or conveyance carrying the mail, shall be fined under this title or imprisoned not more than six months, or both.

(June 25, 1948, ch. 645, 62 Stat. 778; Pub. L. 103–322, title XXXIII, § 330016(1)(B), Sept. 13, 1994, 108 Stat. 2146.)

 

[Razoo]

The Bush family of criminals keep coming .......

 

[Razoo]

How George Bush broke the Post Office.

What in the world was the NOT GOP thinking? Their fiscal responsible brain waves must be burned out with by cocaine......

 

[Razoo]

Some wealthy can certainly be too dumb to be in government .....

“Postmaster General Louis DeJoy does not know the cost of sending a postcard, he said during a congressional hearing Monday, and could not answer several other questions about the agency he was recently appointed to run.”

 

[Craig234]

Let's remember WHY the Republicans are attacking the Post office, even before trump trying to steal the election.

It's the biggest union in the country, IIUC.

One reason the oppose it is like they oppose any unions, to keep workers powerless and paid less, and from organizing politically against them.

Another reason is that the more they privatize the post office, the more then can let more expensive private businesses make money, who will donate to the Republicans.

And finally, it's simply an example of a popular government agency that works, and they want the public thinking government doesn't work at all and supporting their anti-government propaganda, so they let the Republicans attack the people having a government that protects them from the plutocrats Republicans serve.

 

[Razoo]

Let's remember WHY the Republicans are attacking the Post office, even before trump trying to steal the election.

It's the biggest union in the country, IIUC.

One reason the oppose it is like they oppose any unions, to keep workers powerless and paid less, and from organizing politically against them.

Another reason is that the more they privatize the post office, the more then can let more expensive private businesses make money, who will donate to the Republicans.

And finally, it's simply an example of a popular government agency that works, and they want the public thinking government doesn't work at all and supporting their anti-government propaganda, so they let the Republicans attack the people having a government that protects them from the plutocrats Republicans serve.

How many on here want to make less money? Just stick with conservatives and they will keep your wallets drained.

Exactly ....... couldn't have said it better myself .

 

[Checkerboard Strangler]

How George Bush broke the Post Office

what's really dragging down the Postal Service is something else entirely.


Namely, the Postal Accountability and Enhancement Act of 2006.

(B) Not later than June 30, 2017, the Office shall compute, and by
June 30 of each succeeding year shall recompute, a schedule including a
series of annual installments which provide for the liquidation of any
liability or surplus by September 30, 2056, or within 15 years,
whichever is later, of the net present value determined under
subparagraph (A), including interest at the rate used in that
computation.
``(3)(A) The United States Postal Service shall pay into such Fund--
``(i) $5,400,000,000, not later than September 30, 2007;
``(ii) $5,600,000,000, not later than September 30, 2008;
``(iii) $5,400,000,000, not later than September 30, 2009;
``(iv) $5,500,000,000, not later than September 30, 2010;

[[Page 120 STAT. 3252]]

``(v) $5,500,000,000, not later than September 30, 2011;
``(vi) $5,600,000,000, not later than September 30, 2012;
``(vii) $5,600,000,000, not later than September 30, 2013;
``(viii) $5,700,000,000, not later than September 30, 2014;
``(ix) $5,700,000,000, not later than September 30, 2015;
and
``(x) $5,800,000,000, not later than September 30, 2016.

``(B) Not later than September 30, 2017, and by September 30 of each
succeeding year, the United States Postal Service shall pay into such
Fund the sum of--
``(i) the net present value computed under paragraph (1);
and
``(ii) any annual installment computed under paragraph
(2)(B).

Oh looky ^^^, I think we found an extra 61,400,000,000 dollars.
Can you or anyone GUARANTEE that this sixty-one billion actually WILL BE PAID to postal employees seventy five years into the future?
I ask because if it wasn't for the annual five billion in ransom, the USPS would not be in so much debt.
Is there a PAEA for Congress? The Pentagon (they can't account for two trillion dollars, you know) or how about the military as a whole?
Is there ANY agency OR private corporation required to do such a thing?


How Congress Manufactured a Postal Crisis — And How to Fix it

And if we DON'T fix it, here's FedEx letter rates.