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(The Hill)   Postal Service to default again. Official papers sent by USPS so that should give them at least another 6-8 months   (thehill.com) divider line 40
    More: Fail, postal services, U.S. Postal Service  
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769 clicks; posted to Business » on 27 Sep 2012 at 3:41 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-09-27 02:33:18 AM  
USPS has lost billions of dollars in recent years, both due to new technology and the downbeat economy.

Postal unions and some on the left also chalk up many of the agency's financial woes to what they call the unneeded prepayments for retiree healthcare.

In all, the agency lost $5.1 billion in fiscal 2011, even without having to make a healthcare payment. The Aug. 1, 2012, default came only after Congress pushed back the due date on that particular payment, which was originally due at the end of September 2011.


Not sure how to reconcile that with this:

As consumer advocate Ralph Nader noted, if PAEA was never enacted, USPS would actually be facing a $1.5 billion surplus today:
By June 2011, the USPS saw a total net deficit of $19.5 billion, $12.7 billion of which was borrowed money from Treasury (leaving just $2.3 billion left until the USPS hits its statutory borrowing limit of $15 billion). This $19.5 billion deficit almost exactly matches the $20.95 billion the USPS made in prepayments to the fund for future retiree health care benefits by June 2011. If the prepayments required under PAEA were never enacted into law, the USPS would not have a net deficiency of nearly $20 billion, but instead be in the black by at least $1.5 billion.
 
2012-09-27 03:25:34 AM  
I've always had great service from USPS. Never had anything lost or misplaced--unlike fedex or UPS.

The Republican Congress wanted to get rid of USPS..so they put a large amount of debt on them by making them fund retirement programs in each years budget and put that away instead of putting it retirement funds....as all other corporations do. Except the USPS was required to have the cash "on hand" for 75 years into future; that is what is killing them. Instead of putting those funds even into low interest acct would fund those retirement accts..instead of it in year to year budget.

No other corporation is required to take money out of accounts to fund things for 75 years..without putting those funds into investment, or low interest accounts.

Basically, the GOP wanted USPS gone..and came up with a sneaky way in 2006 to make it happen.
 
2012-09-27 04:00:01 AM  

optikeye: I've always had great service from USPS. Never had anything lost or misplaced--unlike fedex or UPS.

The Republican Congress wanted to get rid of USPS..so they put a large amount of debt on them by making them fund retirement programs in each years budget and put that away instead of putting it retirement funds....as all other corporations do. Except the USPS was required to have the cash "on hand" for 75 years into future; that is what is killing them. Instead of putting those funds even into low interest acct would fund those retirement accts..instead of it in year to year budget.

No other corporation is required to take money out of accounts to fund things for 75 years..without putting those funds into investment, or low interest accounts.

Basically, the GOP wanted USPS gone..and came up with a sneaky way in 2006 to make it happen.


The USPS is facing a decline in revenue which will most likely continue into the future. Like social security things work great when you have plenty of revenue and only a few retirees. But when there are more retirees and revenue drops then funding the benefits to the retirees gets difficult. This is why the USPS has to pre-fund, because they won't be able to fund in the future. This would leave tax-payers on the hook to pay for the retirees pensions and benefits.

Although companies don't have to pre-fund about a quarter actually do even though they aren't obligated to. It's up to how they put it in the books.

There is still the 5.1B loss beyond the pre-fund, if the pre-fund is the only issue then explain that loss.

The house at the time was controlled by the Democrats and the bill in question was passed by a vote of 410 to 20, it passed the Republican senate by a voice vote. You can try to spin Republican but the Democrats voted for it as well.
 
2012-09-27 04:02:07 AM  
The only solace I get in watching the USPS get drowned in Grover Norquist's bathtub is knowing that dumbfark rural "KEEP THE GUBMINT OUTTA MY MEDICARE!!!1" types who approve of this will wind up paying a recurring $5 charge just to have their bills delivered to them by private courier.
 
2012-09-27 04:13:27 AM  
For those unaware, the USPS is required to turn a profit while at the same time required to do things that UPS, FedEx, et al say will bankrupt anyone. Things like providing a fully staffed post office, open six days per week, for every cluster of people across the US. Daily delivery to residential properties many tens of miles apart at the same cost as daily deliveries to thousands of people in a single building. And my favorite, snail mail spam paid for by the USPS because it puts money into the pockets of congressmen.

It's like requiring an Olympic sprinter to compete using a potato sack (both legs must remain within the bag), while their competitors not only don't have any such requirement, they get a 10 second head start. And they're only racing 100m.
 
2012-09-27 04:22:14 AM  
Tthe overall problem is this uncomforable, half-private half-public structure. I do believe that anything the government touches turns into a bloated inefficient mess, but if you're going to require service equal in cost and extent to every person in the country regardless of costs to provide, it's already a fully social service; attempts to pretend otherwise will only cost money.
 
2012-09-27 04:49:59 AM  

Lt_Ryan: The house at the time was controlled by the Democrats and the bill in question was passed by a vote of 410 to 20, it passed the Republican senate by a voice vote. You can try to spin Republican but the Democrats voted for it as well.


Actually, it was signed by Bush and passed through the House unanimously, and by the Senate through a voice vote. The ayes and nays were not recorded per Congressperson. Both the House and Senate were both still under GOP control even though the Democrats had won in November, because that's how elections work. So yes, the Democrats helped pass this atrocity, but it was devised by the Republicans.
 
2012-09-27 05:03:20 AM  

Mike Chewbacca: Lt_Ryan: The house at the time was controlled by the Democrats and the bill in question was passed by a vote of 410 to 20, it passed the Republican senate by a voice vote. You can try to spin Republican but the Democrats voted for it as well.

Actually, it was signed by Bush and passed through the House unanimously, and by the Senate through a voice vote. The ayes and nays were not recorded per Congressperson. Both the House and Senate were both still under GOP control even though the Democrats had won in November, because that's how elections work. So yes, the Democrats helped pass this atrocity, but it was devised by the Republicans.


"They came up with it! We only went along with it without bothering to fight against it!"

The rallying cry of the Democratic Party.
 
2012-09-27 05:06:49 AM  

Jensaarai: Mike Chewbacca: Lt_Ryan: The house at the time was controlled by the Democrats and the bill in question was passed by a vote of 410 to 20, it passed the Republican senate by a voice vote. You can try to spin Republican but the Democrats voted for it as well.

Actually, it was signed by Bush and passed through the House unanimously, and by the Senate through a voice vote. The ayes and nays were not recorded per Congressperson. Both the House and Senate were both still under GOP control even though the Democrats had won in November, because that's how elections work. So yes, the Democrats helped pass this atrocity, but it was devised by the Republicans.

"They came up with it! We only went along with it without bothering to fight against it!"

The rallying cry of the Democratic Party.


Yep, the Democrats should have voted against it. But it wouldn't have mattered because the GOP had total control of our government. Both parts of Congress, the Presidency, and the Supreme Court. So blow me.
 
2012-09-27 05:07:58 AM  

Mike Chewbacca: Jensaarai: Mike Chewbacca: Lt_Ryan: The house at the time was controlled by the Democrats and the bill in question was passed by a vote of 410 to 20, it passed the Republican senate by a voice vote. You can try to spin Republican but the Democrats voted for it as well.

Actually, it was signed by Bush and passed through the House unanimously, and by the Senate through a voice vote. The ayes and nays were not recorded per Congressperson. Both the House and Senate were both still under GOP control even though the Democrats had won in November, because that's how elections work. So yes, the Democrats helped pass this atrocity, but it was devised by the Republicans.

"They came up with it! We only went along with it without bothering to fight against it!"

The rallying cry of the Democratic Party.

Yep, the Democrats should have voted against it. But it wouldn't have mattered because the GOP had total control of our government. Both parts of Congress, the Presidency, and the Supreme Court. So blow me.


Filibuster.
 
2012-09-27 05:13:25 AM  

Jensaarai: Mike Chewbacca: Jensaarai: Mike Chewbacca: Lt_Ryan: The house at the time was controlled by the Democrats and the bill in question was passed by a vote of 410 to 20, it passed the Republican senate by a voice vote. You can try to spin Republican but the Democrats voted for it as well.

Actually, it was signed by Bush and passed through the House unanimously, and by the Senate through a voice vote. The ayes and nays were not recorded per Congressperson. Both the House and Senate were both still under GOP control even though the Democrats had won in November, because that's how elections work. So yes, the Democrats helped pass this atrocity, but it was devised by the Republicans.

"They came up with it! We only went along with it without bothering to fight against it!"

The rallying cry of the Democratic Party.

Yep, the Democrats should have voted against it. But it wouldn't have mattered because the GOP had total control of our government. Both parts of Congress, the Presidency, and the Supreme Court. So blow me.

Filibuster.


Hey now, this was a DEMOCRAT minority. Get your parties straight. Sheesh.
 
2012-09-27 05:16:06 AM  

Mike Chewbacca: Hey now, this was a DEMOCRAT minority. Get your parties straight. Sheesh.


Silly me. ;)

Ah well, I suppose if they ever got into the majority after 2006, they totally would have undone it.
 
2012-09-27 05:19:03 AM  

Jensaarai: Mike Chewbacca: Hey now, this was a DEMOCRAT minority. Get your parties straight. Sheesh.

Silly me. ;)

Ah well, I suppose if they ever got into the majority after 2006, they totally would have undone it.


I already agreed the Democrats should have voted against it. That doesn't mean the GOP doesn't own more than 50% of the blame for this fiasco. I repeat: BLOW ME.
 
2012-09-27 05:29:15 AM  

Mike Chewbacca: Jensaarai: Mike Chewbacca: Hey now, this was a DEMOCRAT minority. Get your parties straight. Sheesh.

Silly me. ;)

Ah well, I suppose if they ever got into the majority after 2006, they totally would have undone it.

I already agreed the Democrats should have voted against it. That doesn't mean the GOP doesn't own more than 50% of the blame for this fiasco. I repeat: BLOW ME.


What about the fact that two Democrats co-sponsored the bill, one of whom is a senior member in the House who wouldn't have attached his name to it if Democrats didn't want it?

Cling to that 50.00001% of blame for that evil other side, I guess.
 
2012-09-27 05:41:09 AM  

Jensaarai: The only solace I get in watching the USPS get drowned in Grover Norquist's bathtub is knowing that dumbfark rural "KEEP THE GUBMINT OUTTA MY MEDICARE!!!1" types who approve of this will wind up paying a recurring $5 charge just to have their bills delivered to them by private courier.


Pretty much how I look at it, except I live in an area where continued local postal service would be questionable. It's very sad - the USPS is a very cheap way to send things around the country, and I don't have a problem with keeping it funded even if it DOES produce a net loss. However, with the continued frequency of shopping online, I doubt that'd be a huge concern if it weren't for the whole "fund retirements for 75 years" thing. I can imagine that the remote USPS outposts would be paid for by those remote citizens doing more and more of their product shopping online and having it delivered by ye olde postale service.
 
2012-09-27 06:11:03 AM  

Mike Chewbacca: Jensaarai: Mike Chewbacca: Lt_Ryan: The house at the time was controlled by the Democrats and the bill in question was passed by a vote of 410 to 20, it passed the Republican senate by a voice vote. You can try to spin Republican but the Democrats voted for it as well.

Actually, it was signed by Bush and passed through the House unanimously, and by the Senate through a voice vote. The ayes and nays were not recorded per Congressperson. Both the House and Senate were both still under GOP control even though the Democrats had won in November, because that's how elections work. So yes, the Democrats helped pass this atrocity, but it was devised by the Republicans.

"They came up with it! We only went along with it without bothering to fight against it!"

The rallying cry of the Democratic Party.

Yep, the Democrats should have voted against it. But it wouldn't have mattered because the GOP had total control of our government. Both parts of Congress, the Presidency, and the Supreme Court. So blow me.


You realize Jensaarai is trying to bring you down to his level, where he will beat by sheer experience, right?
 
2012-09-27 06:52:53 AM  
my New Yorker Magazine didnt come this week.
 
2012-09-27 06:55:32 AM  

optikeye: I've always had great service from USPS. Never had anything lost or misplaced--unlike fedex or UPS.

The Republican Congress wanted to get rid of USPS..so they put a large amount of debt on them by making them fund retirement programs in each years budget and put that away instead of putting it retirement funds....as all other corporations do. Except the USPS was required to have the cash "on hand" for 75 years into future; that is what is killing them. Instead of putting those funds even into low interest acct would fund those retirement accts..instead of it in year to year budget.

No other corporation is required to take money out of accounts to fund things for 75 years..without putting those funds into investment, or low interest accounts.

Basically, the GOP wanted USPS gone..and came up with a sneaky way in 2006 to make it happen.


The extra added irony here is that the existence of the USPS is mandated by the very Constitution
that the GOP-tards seem to regard as unchangable holy writ.
 
2012-09-27 08:07:14 AM  
I remember when people used to point at the USPS as the only government agency that worked because it made money. I also remember when 20 oz bottles of soda were under a dollar. I remember... the Alamo and Pearl Harbor. Also, when I could still get a boner.
 
2012-09-27 09:55:35 AM  
Republicans have been trying to force it to default for years now by forcing the PO to pay in pensions years in advance, far more than any private company would be required to. They want to privatize the PO because socialism and so they can harvest the sweet sweet taxpayer dollars going to support it.
 
2012-09-27 10:12:00 AM  
Ok, after some quick research, here's what is going on with USPS as best I can tell. In 2006, the prefunding bill was passed, which required USPS to make ten annual payments of $5.5B each to prefund the pensions for the next 75 years. They made the first few, but after the financial crisis, they were too short of cash to make the 2011 one, so they got an extension until August of this year. So, no payment in 2011, and two payments due in 2012. They were unable to make the August payment (left over from 2011) and now they're announcing that they're not going to be able to make the 2012 payment, either.

Now, here's the rub: That 2006 bill imposed a prefunding obligation of $90.3B to completely cover all the benefits. Of that total, $44.1B has already been paid as of the end of fiscal 2011 according to an Inspector General report from last June. And the formula used to calculate the pension cost wasn't set up correctly - USPS has actually paid 105% of its pension costs since the bill was enacted, resulting in a surplus of pension payments of $13.1B, according to the same IG report.

Now, about profits and losses: For the first four years after the prepayment bill was passed, the USPS would have turned a roughly $1B profit without the prepayments. Since then, however, revenues have been dropping like a stone, with a major loss (at least $5.7B, as best I can tell) for fiscal 2011 and an $11.6B loss for the first three quarters of fiscal 2012. Mail volume has dropped 3.6% this year, which is a large reason why.

So, USPS has called for several changes - an $11B refund of the pension overage, changing the product mix (to offer office supplies and the like, more like a mailbox store), five day delivery, change the prefunding requirement, and redesign the worker's comp system by having the USPS pull out of the federal plan and set up its own. The union is opposed to the worker's comp changes and going to five day delivery, but supports the other measures. The Senate has currently passed a bill to implement some of this, but the house hasn't done anything at all. There's hope that it will get taken up in the lame duck session, but with sequestration also being addressed, it's more likely to get tossed to the next congress.
 
2012-09-27 11:01:16 AM  

optikeye: I've always had great service from USPS. Never had anything lost or misplaced--unlike fedex or UPS.

The Republican Congress wanted to get rid of USPS..so they put a large amount of debt on them by making them fund retirement programs in each years budget and put that away instead of putting it retirement funds....as all other corporations do. Except the USPS was required to have the cash "on hand" for 75 years into future; that is what is killing them. Instead of putting those funds even into low interest acct would fund those retirement accts..instead of it in year to year budget.

No other corporation is required to take money out of accounts to fund things for 75 years..without putting those funds into investment, or low interest accounts
.

Basically, the GOP wanted USPS gone..and came up with a sneaky way in 2006 to make it happen.


This.
 
2012-09-27 11:25:31 AM  
The biggest problem I have with the USPS is that they're so slow to update their tracking. On several occasions, I've had an item in my paws and the tracking still shows it as having not been "Accepted"
 
2012-09-27 11:26:32 AM  

Lt_Ryan: The house at the time was controlled by the Democrats and the bill in question was passed by a vote of 410 to 20, it passed the Republican senate by a voice vote. You can try to spin Republican but the Democrats voted for it as well.


Wrong. In 2006, both the House and Senate were controlled by the Republicans. The Democrats took control of both chambers in the elections that year, but the new Democratic majorities were not seated until January of 2007.
 
2012-09-27 11:32:00 AM  

DjangoStonereaver: optikeye: I've always had great service from USPS. Never had anything lost or misplaced--unlike fedex or UPS.

The Republican Congress wanted to get rid of USPS..so they put a large amount of debt on them by making them fund retirement programs in each years budget and put that away instead of putting it retirement funds....as all other corporations do. Except the USPS was required to have the cash "on hand" for 75 years into future; that is what is killing them. Instead of putting those funds even into low interest acct would fund those retirement accts..instead of it in year to year budget.

No other corporation is required to take money out of accounts to fund things for 75 years..without putting those funds into investment, or low interest accounts.

Basically, the GOP wanted USPS gone..and came up with a sneaky way in 2006 to make it happen.

The extra added irony here is that the existence of the USPS is mandated by the very Constitution
that the GOP-tards seem to regard as unchangable holy writ.


Not quite; the Constitution says Congress has the power to establish a post office, but doesn't say there must be a post office.
 
2012-09-27 12:32:43 PM  

Lt_Ryan: The house at the time was controlled by the Democrats and the bill in question was passed by a vote of 410 to 20, it passed the Republican senate by a voice vote. You can try to spin Republican but the Democrats voted for it as well.


Shhh! You're screwing up the talking points.
 
2012-09-27 12:33:15 PM  

KarmicDisaster: Republicans have been trying to force it to default for years now by forcing the PO to pay in pensions years in advance, far more than any private company would be required to. They want to privatize the PO because socialism and so they can harvest the sweet sweet taxpayer dollars going to support it.


I don't think you are correct about that. Private companies are required to fund their pension plans as well. Any deficit between Projected Benefit Obligation and fair value of plan assets has to be made up over something like seven years, under the pension protection act of 2006, any pension that is underfunded has to fund that difference over seven years.

Link

Let's be sure we understand what's going on with the postal service and pension funding. "Pre-funding" means putting funds aside for promises you've already made. Postal workers have been promised pensions and health care benefits, as part of their compensation. In 2006 congress told them to start putting some cash aside to pay for that liability. They're still 40 or $50 billion underfunded relative to the benefits they've promised, I believe.
 
2012-09-27 12:48:12 PM  

Debeo Summa Credo: KarmicDisaster: Republicans have been trying to force it to default for years now by forcing the PO to pay in pensions years in advance, far more than any private company would be required to. They want to privatize the PO because socialism and so they can harvest the sweet sweet taxpayer dollars going to support it.

I don't think you are correct about that. Private companies are required to fund their pension plans as well. Any deficit between Projected Benefit Obligation and fair value of plan assets has to be made up over something like seven years, under the pension protection act of 2006, any pension that is underfunded has to fund that difference over seven years.

Link

Let's be sure we understand what's going on with the postal service and pension funding. "Pre-funding" means putting funds aside for promises you've already made. Postal workers have been promised pensions and health care benefits, as part of their compensation. In 2006 congress told them to start putting some cash aside to pay for that liability. They're still 40 or $50 billion underfunded relative to the benefits they've promised, I believe.



Well companies don't fund their pensions at 100% of the expected benefits up front. Even in the best managed the fund is funded and then invested with the assumption that the fund will grow over the years to meet the expected payouts, with adjustments being made when needed of course. Requiring the PO to fund at 100% of the "promised" benefits up front is beyond what any company would do, even the best managed. It is ridiculous, and that huge cash fund is just going to be a target for politicians to try to grab.
 
2012-09-27 01:05:17 PM  

phyrkrakr: Ok, after some quick research, here's what is going on with USPS as best I can tell. In 2006, the prefunding bill was passed, which required USPS to make ten annual payments of $5.5B each to prefund the pensions for the next 75 years. They made the first few, but after the financial crisis, they were too short of cash to make the 2011 one, so they got an extension until August of this year. So, no payment in 2011, and two payments due in 2012. They were unable to make the August payment (left over from 2011) and now they're announcing that they're not going to be able to make the 2012 payment, either.

Now, here's the rub: That 2006 bill imposed a prefunding obligation of $90.3B to completely cover all the benefits. Of that total, $44.1B has already been paid as of the end of fiscal 2011 according to an Inspector General report from last June. And the formula used to calculate the pension cost wasn't set up correctly - USPS has actually paid 105% of its pension costs since the bill was enacted, resulting in a surplus of pension payments of $13.1B, according to the same IG report.

Now, about profits and losses: For the first four years after the prepayment bill was passed, the USPS would have turned a roughly $1B profit without the prepayments. Since then, however, revenues have been dropping like a stone, with a major loss (at least $5.7B, as best I can tell) for fiscal 2011 and an $11.6B loss for the first three quarters of fiscal 2012. Mail volume has dropped 3.6% this year, which is a large reason why.

So, USPS has called for several changes - an $11B refund of the pension overage, changing the product mix (to offer office supplies and the like, more like a mailbox store), five day delivery, change the prefunding requirement, and redesign the worker's comp system by having the USPS pull out of the federal plan and set up its own. The union is opposed to the worker's comp changes and going to five day delivery, but supports the other measures. The Senate has currently passed a bill to implement some of this, but the house hasn't done anything at all. There's hope that it will get taken up in the lame duck session, but with sequestration also being addressed, it's more likely to get tossed to the next congress.


Quoted because [repeating bears.jpg]
Here's a source that discusses this. Here's the OIG report.
 
2012-09-27 01:48:08 PM  
Jensaarai: The only solace I get in watching the USPS get drowned in Grover Norquist's bathtub is knowing that dumbfark rural "KEEP THE GUBMINT OUTTA MY MEDICARE!!!1" types who approve of this will wind up paying a recurring $5 charge just to have their bills delivered to them by private courier.

Sad thing is it's really, really going to hurt small business mom and pop stores, which are finding themselves in a sort of Renaissance as the death of big box marts plays out.

Big Box can't compete with Big Internet on costs or customer service, and is dying. Look at Staples and Best Buy. But there's still demand for higher quality good, exceptional customer service and a shopping experience. The newer internet, web 2.0 savvy Mom and Pop knows how to offer that with a similar online footprint, but they absolutely rely on USPS for most of their shipping.

Sad that the anti-tax/anti-government crowd is going to end up hurting the resurgence of an internet and parcel connected main street. All so someone can raid that nice nest egg they're forcing USPS to stash away, once they're gone.
 
2012-09-27 01:51:23 PM  

Debeo Summa Credo: KarmicDisaster: Republicans have been trying to force it to default for years now by forcing the PO to pay in pensions years in advance, far more than any private company would be required to. They want to privatize the PO because socialism and so they can harvest the sweet sweet taxpayer dollars going to support it.

I don't think you are correct about that. Private companies are required to fund their pension plans as well. Any deficit between Projected Benefit Obligation and fair value of plan assets has to be made up over something like seven years, under the pension protection act of 2006, any pension that is underfunded has to fund that difference over seven years.

Link

Let's be sure we understand what's going on with the postal service and pension funding. "Pre-funding" means putting funds aside for promises you've already made. Postal workers have been promised pensions and health care benefits, as part of their compensation. In 2006 congress told them to start putting some cash aside to pay for that liability. They're still 40 or $50 billion underfunded relative to the benefits they've promised, I believe.


Yes, but funding it 75 years in advance means they're funding it for workers not even born yet. Seems kinda silly.
 
2012-09-27 03:13:23 PM  

DjangoStonereaver: optikeye: I've always had great service from USPS. Never had anything lost or misplaced--unlike fedex or UPS.

The Republican Congress wanted to get rid of USPS..so they put a large amount of debt on them by making them fund retirement programs in each years budget and put that away instead of putting it retirement funds....as all other corporations do. Except the USPS was required to have the cash "on hand" for 75 years into future; that is what is killing them. Instead of putting those funds even into low interest acct would fund those retirement accts..instead of it in year to year budget.

No other corporation is required to take money out of accounts to fund things for 75 years..without putting those funds into investment, or low interest accounts.

Basically, the GOP wanted USPS gone..and came up with a sneaky way in 2006 to make it happen.

The extra added irony here is that the existence of the USPS is mandated by the very Constitution
that the GOP-tards seem to regard as unchangable holy writ.


This just cant be emphasized enough.

Do these same people also demand that the US Army, Navy and Marines turn a profit?
 
2012-09-27 03:29:44 PM  

KarmicDisaster: Well companies don't fund their pensions at 100% of the expected benefits up front. Even in the best managed the fund is funded and then invested with the assumption that the fund will grow over the years to meet the expected payouts, with adjustments being made when needed of course. Requiring the PO to fund at 100% of the "promised" benefits up front is beyond what any company would do, even the best managed. It is ridiculous, and that huge cash fund is just going to be a target for politicians to try to grab.


Details on this are hard to find. Here's a link to the full text of the bill: Link

They're required to fund 100% of the 'present value' of the obligation. That means it is discounted at some rate, just like corporate pension obligations.

TyrantilYes, but funding it 75 years in advance means they're funding it for workers not even born yet. Seems kinda silly.

I can't find reference to 75 years anywhere in the text. You would be right that it is silly if they're funding a plan for workers not born yet, but I question whether that is the case. I can't outright refute it because details are slim and the bill itself is written in legalese, but I'm not taking Ralph Nader's word for it either.
 
2012-09-27 03:55:15 PM  

Goodfella: DjangoStonereaver: optikeye: I've always had great service from USPS. Never had anything lost or misplaced--unlike fedex or UPS.

The Republican Congress wanted to get rid of USPS..so they put a large amount of debt on them by making them fund retirement programs in each years budget and put that away instead of putting it retirement funds....as all other corporations do. Except the USPS was required to have the cash "on hand" for 75 years into future; that is what is killing them. Instead of putting those funds even into low interest acct would fund those retirement accts..instead of it in year to year budget.

No other corporation is required to take money out of accounts to fund things for 75 years..without putting those funds into investment, or low interest accounts.

Basically, the GOP wanted USPS gone..and came up with a sneaky way in 2006 to make it happen.

The extra added irony here is that the existence of the USPS is mandated by the very Constitution
that the GOP-tards seem to regard as unchangable holy writ.

This just cant be emphasized enough.

Do these same people also demand that the US Army, Navy and Marines turn a profit?


To be fair the armed services ARE Government. USPS is a GSE, which means they get better access to markets because they're "to big to fail", and if they do fail taxpayers are on the hook. Otherwise they have to run like any other business and they have to adhere to normal business accounting and practices. If they run in the whole too long, they're going to file for bankruptcy and taxpayers will be on the hook to their creditors.

Unfortunately because of their GSE status, dicks in congress can change rules in their charter and force them to do things no respectful business would voluntarily do.

Same thing happened to Freddie and Fannie where the law was changed and instead of originating loans to meet their FHA responsibilities, the government told them to just buy up MBS securitized debt to satisfy it. Oops!

We all know how well that turned out.
 
2012-09-27 03:58:54 PM  

Debeo Summa Credo: KarmicDisaster: Well companies don't fund their pensions at 100% of the expected benefits up front. Even in the best managed the fund is funded and then invested with the assumption that the fund will grow over the years to meet the expected payouts, with adjustments being made when needed of course. Requiring the PO to fund at 100% of the "promised" benefits up front is beyond what any company would do, even the best managed. It is ridiculous, and that huge cash fund is just going to be a target for politicians to try to grab.

Details on this are hard to find. Here's a link to the full text of the bill: Link

They're required to fund 100% of the 'present value' of the obligation. That means it is discounted at some rate, just like corporate pension obligations.

TyrantilYes, but funding it 75 years in advance means they're funding it for workers not even born yet. Seems kinda silly.

I can't find reference to 75 years anywhere in the text. You would be right that it is silly if they're funding a plan for workers not born yet, but I question whether that is the case. I can't outright refute it because details are slim and the bill itself is written in legalese, but I'm not taking Ralph Nader's word for it either.


http://www.cnbc.com/id/45049636/Fixing_the_US_Postal_Service_s_Financ e s

There ya go, Google for more. The requirement is literally insane, especially seeing as they are not Government run, but a GSE. I could see 40 years, but 75 for future retirees not even born? That be like someone putting away money in 1937 for a person retiring now at age 65...

A lot has happened since then.
 
2012-09-27 05:02:36 PM  

TyrantII: Debeo Summa Credo: KarmicDisaster: Well companies don't fund their pensions at 100% of the expected benefits up front. Even in the best managed the fund is funded and then invested with the assumption that the fund will grow over the years to meet the expected payouts, with adjustments being made when needed of course. Requiring the PO to fund at 100% of the "promised" benefits up front is beyond what any company would do, even the best managed. It is ridiculous, and that huge cash fund is just going to be a target for politicians to try to grab.

Details on this are hard to find. Here's a link to the full text of the bill: Link

They're required to fund 100% of the 'present value' of the obligation. That means it is discounted at some rate, just like corporate pension obligations.

TyrantilYes, but funding it 75 years in advance means they're funding it for workers not even born yet. Seems kinda silly.

I can't find reference to 75 years anywhere in the text. You would be right that it is silly if they're funding a plan for workers not born yet, but I question whether that is the case. I can't outright refute it because details are slim and the bill itself is written in legalese, but I'm not taking Ralph Nader's word for it either.

http://www.cnbc.com/id/45049636/Fixing_the_US_Postal_Service_s_Financ e s

There ya go, Google for more. The requirement is literally insane, especially seeing as they are not Government run, but a GSE. I could see 40 years, but 75 for future retirees not even born? That be like someone putting away money in 1937 for a person retiring now at age 65...

A lot has happened since then.


Yeah, an email from Darrell Issa in your link specifically states that the USPS doesn't have to fund liabilities for future workers. You are right that such a requirement wouldn't make any sense, however I don't think that there is such a requirement (although I admit I'm not certain). The rest of that link is basically a union rep complaining about service cuts and blaming the requirement to fund incurred liabilities for the underlying problems at USPS. I'm not going to take his word for it either as he's not objective.
 
2012-09-27 05:42:08 PM  
My rent check was returned for insuffecient postage even though it had a forever stamp.

I'm using my credit union's bill pay system next month
 
2012-09-27 07:40:32 PM  

Goodfella: Do these same people also demand that the US Army, Navy and Marines turn a profit?


They do. For Halliburton, Blackwater, Boeing, etc.
 
2012-09-28 12:20:39 AM  

digistil: For those unaware, the USPS is required to turn a profit while at the same time required to do things that UPS, FedEx, et al say will bankrupt anyone. Things like providing a fully staffed post office, open six days per week, for every cluster of people across the US. Daily delivery to residential properties many tens of miles apart at the same cost as daily deliveries to thousands of people in a single building. And my favorite, snail mail spam paid for by the USPS because it puts money into the pockets of congressmen.

It's like requiring an Olympic sprinter to compete using a potato sack (both legs must remain within the bag), while their competitors not only don't have any such requirement, they get a 10 second head start. And they're only racing 100m.


You must be new to Fark; you sound reasonable and make sense. Don't worry, the hurp-e-derp will settle in soon and you will sound like the rest of us...
 
2012-09-28 09:30:16 AM  
Thanks a farking lot GOP. If theirs one thing we can point to and say "You Built That" to the GOP, it is the failure of the Postal Service. Your policies have destroyed an American institution and discomfitted millions of Americans.

fark the GOP - they do not get my votes this year.
 
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