There's a dastardly conspiracy afoot to shut down the United States Postal Service, Lefty screamer Ed Schultz has informed his MSNBC audience. The culprits? Republicans, match. The USPS recently announced its decision to end Saturday mail service, an attempt to stanch its years-long budget bleeding; the federal entity lost $16 billion in 2012. Though this move is only projected to save the Post Office roughly $2 billion annually, it's still an important nod to reality. I discussed this issue on CNBC last night, where even the liberal panelist seemed to agree that major reductions are in order and that it might be time for the postal service to be cut loose from Congress' umbilical cord:
I borrowed one of the president's preferred buzz phrases -- "teachable moments" -- to argue that the USPS' forthcoming cuts can be instructive in budget battles to come. These will be genuine and deep cuts to a prominent arm of the federal government. They're being made out of economic necessity, to partially correct an unsustainable and insolvent business model. And once they're implemented, human life on planet earth will somehow manage to endure. People who need to mail something on a weekend will choose from an array of private sector options, and life will go on. "Draconian" spending cuts are often not the catacysmic events they're hyped up to be by people whose ideology won't countenance pared back government. Speaking of whom, host Ed Schultz and two like-minded guests, Rep. Gerry Connolly (D-VA) and a postal worker, are blaming Republicans for the ongong woes of the USPS, fretting that the GOP is trying to "starve" it to death (via the Free Beacon):
In the 2006 legislation, what is so monstrous about this, Ed, and you got it is they created this crisis in that lame duck legislation of the Republican Congress in 2006, and now they say, well, there is a crisis we created, and there is no choice but all these horrible decisions that will further kill a viable and vibrant postal service.
The "monstrous" legislation in question requires the Post Office to employ honest accounting on its pension and benefits obligations and fund them in real time, rather than use gimmicks to hide the true cost and shove them off to some future date. As a result, the true nature of the service's fiscal state is laid bare for all to see. Liberals are hopping mad about this because they prefer Happy Face Accounting, wherein the USPS' books could be distorted to appear, well, "viable and vibrant." This strikes me as yet another teachable moment. Most federal programs aren't bound by these guidelines -- so many existing, unfunded promises remain helpfully off the books. But that doesn't mean that those bills aren't still going to come due. If the "monstrous" Post Office-style bookkeeping standards were applied to massive programs like Medicare and Social Security, the public may be more aware of the fact that our true national debt (including real-time accruals of unfunded liabilities) is closer to $90 trillion than it is to the official figure of $16.5 trillion.
UPDATE - The indispensable Philip Klein argues that even under magical government accounting, the CBO's recent report on America's balance sheet decisively settles the big-picture budget debate in conservatives' favor:
Even as circumstances change, most budget battles boil down to the following dynamic: Liberals push to raise taxes and cut defense spending, while conservatives argue that entitlements are the true driver of the nation's deficits. A new report by the Congressional Budget Office settles the debate, unequivocally, in conservatives' favor. Taking into account the flood of new tax revenue from the "fiscal cliff" deal that raised taxes on higher income earners, and assuming that scheduled deep defense cuts go into effect, the CBO still projects that the national debt will skyrocket over the next decade. The reason is that spending on programs such as Medicare, Medicaid and Social Security will soar, and in turn increase the burden of interest payments.
Read Phil's full piece, which runs through the stats. Here's one stunning offering: "By 2020, Congress could vote to eliminate all military spending and it wouldn't even be enough to cover interest payments on the national debt." Yikes.