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New Study Suggests the Post Office Needs Serious Reform

The post office is in dire straits. An aging workforce, generous retirement benefits, and an increasingly-electronic communications world mean that the USPS is looking down a long corridor of red ink. (Sounds familiar when thinking about the government.) Regardless, the postal unions are in denial about this. With an eye to preserving incredibly generous public union benefits, they've been running advertisements across the country advocating for a solution from Congress.

Long story short, the USPS is now legally obligated to fund retiree benefits beforehand (rather than on a pay-as-you-go model) so that they don't face a massive payment shortage all at once. The postal unions want that stipulation taken away so that they can preserve the unsustainable status quo.

Via Tad DeHaven comes a new study:

Because the Service was ignoring a very expensive fringe benefit in its income statement, its reported costs were artificially low and its reported income artificially high. The unfunded retiree health care obligation had mushroomed to $74.8 billion by September 30, 2006.

This is similar to the retirement entitlement crisis facing Social Security and Medicare, with one difference: the federal government has been more responsible than the USPS (shocking, I know), and the feds have (in theory at least) been running a "trust fund" for their retirement programs. No such luck for the USPS.


The USPS is in dire need of reform. There are multiple reform bills that have been making their way through Congress, led by Sen. Lieberman in the Senate and Rep. Issa in the House.

For more on USPS reform, check out the upcoming May issue of Townhall Magazine!


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