The U.S. Postal Service has had positive cash flow the past two fiscal years to the tune of $7.9 billion according to the Office of Management & Budget. Then we ask, why are the postal rates going up almost 6 percent this January?
The only reason is PL 108-18 passed by Congress and signed by the president in 2003.
This new law appropriated the $78 billion overpayments by the USPS to the Civil Service Retirement Fund since 1971 (due to an erroneous actuarial assumption) to an escrow account controlled by Congress otherwise known as (like the Social Security Trust Fund) a funnel to the U.S. Treasury General Fund. The law gratefully allowed the USPS to use the money that under the old method would be overpayments towards operational expenses for fiscal years 2004 and 2005.
However, this was only a short-term fix ostensibly to be corrected during that time. Well, the provision granting this to the USPS was to expire at the end of FY 2005 and has, now automatically reverting back to the original faulty accounting method. The USPS is again contributing the overpayments estimated to be $3.1 billion in 2006 and totaling an additional $42 billion by 2015 to the infamous escrow account. This is the only reason the service required the rate/tax increase this January. The $120 billion will be spent or reduce the national debt, i.e., a "stamp tax."
PL 108-18 also graciously puts an additional demand on the USPS, by now stealing another $28 billion for the U.S. Treasury according to the OMB. This provision forces the USPS to pay the military and other federal service portion of the CSRS postal retirements unlike pre-2003 law. The almost $150 billion will be more tax on postal customers as rate increases unless we make a remedy.
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There is one. A bipartisan group of 163 congress people, including our own Rep. Colin Peterson, D-Minn., co-sponsored HR 22 (Postal Accountability and Enhancement Act) passed in July, 410 to 20 in the House. The Senate has not taken any action. Why not? The current administration strangely is against this reform and the president's senior advisers are recommending he veto the bill. The reason ostensibly is because it has a negative effect on the budget. These people claim to be for reducing taxes and spending. Ya, right!
Should HR 22 not pass this session then the USPS will be forced to raise rates substantially again in 2007 to continue these subsidies to the federal coffer.
Voice your concern please to our U.S. senators: no 'hidden' stamp tax.
Lucier, Moorhead, is a former U.S. Department of Defense budget officer and veteran of 22 years with the Postal Service. E-mail lmlucier@afo.net
