Postal Service Legislative ‘Fix’ Will Dump Workers on Medicare

by Liz Sheld


A bill to “fix” the troubled United States Post Office (USPS) is on the verge of passage in the Senate but does it solve more problems than it creates? The Postal Service Reform Act of 2021, H.R. 3076 was scheduled for a vote earlier this month but was blocked by Senator Rick Scott (R-Florida) on a procedural technicality.  “We can’t afford to add stress on our already enormous national debt with poor financial planning, which I think this bill absolutely does,” Scott said of the bill.

Now it’s back and on track for a vote in the Senate.

The biggest financial liability facing the USPS is the legal requirement to fund 75 years of retirement health benefits in advance for its workers. Congress has found a way around that by dumping the future postal workers on to Medicare.

NPR writes:

According to the Congressional Budget Office, the move could save the postal retirement and health programs about $5.6 billion through 2031 while adding $5.5 billion in costs to Medicare during that span, and probably much more in later years.

The provision dumping USPS retirees into Medicare will expedite the program’s insolvency while increasing costs on both the taxpayer and USPS retirees put into Medicare. This provision, if passed, will provide a $60 billion hit to Medicare. This is an accounting gimmick that makes no fiscal sense.

Additionally, a taxpayer funded bailout of USPS gives USPS employees special treatment by differentiating them from any other federal employee. Current retirees cost the USPS about $4 billion a year that will be taken off the books. It is bad government stewardship to put all future USPS retirees into a program likely to go insolvent in 2026. “This bill simply shifts risk to Medicare recipients by adding billions of new costs to Medicare,” Sen. Scott said back on February 14 when he blocked requests on the Senate floor to expedite passage of the bill.

This new fiscal shell game bailout is on top of other unsuccessful USPS bailouts. The USPS received $10 billion from the CARES act after requesting $25 billion. The original amount was supposed to be expenditures that were approved by the Secretary of the Treasury and the Postal Commissioner. Of that bailout money, the USPS used $9.6 billion on expenses. They originally declared that they only lost $4 billion last year, but when you add in the $10 billion bailout as a loss, they lost $14 billion.

The bill doesn’t address the main problem facing the 21st century post office: there’s less mail going to more households. The Wall Street Journal writes:

The fundamental problem is a broken business model. Each year there are more addresses getting less overall mail. The USPS can’t keep going like this forever, so it won’t, but Congress should be trying to arrest its financial fall to limit the collateral damage to taxpayers. One way to start would be to give the USPS a free hand to manage its business with fewer post offices and less frequent delivery.

Instead, the Democrats and complicit Republicans who will vote to pass the bill pretend it actually addresses the fundamental problems with the USPS.  “We will pass this bill because America needs it. Rural people need it. Senior citizens need it. Veterans need it — 80% of the veterans’ prescriptions are sent through the mail,” Schumer said. “Nobody should be standing in the way of this bill.”

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Liz Sheld reports for American Greatness. 






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