How George W Bush broke the Post Office (with help from Sue Collins)

[Cetacea]

A lot of people point to the rise of email, as well as private competitors like FedEx. Certainly, all those things contribute to USPS's problems. But what's really dragging down the Postal Service is something else entirely.

Namely, the Postal Accountability and Enhancement Act of 2006.

Passed by a Republican-led Congress and signed into law by President George W. Bush, the PAEA gave the Postal Service new accounting and funding rules for its retiree pension and health benefits. Up until 2006, the USPS funded those obligations on a pay-as-you-go-basis, pulling out of its pension fund and adding to it as retirees' costs came in. But the PAEA required the Postal Service to calculate all of its likely pension costs over the next 75 years, and then sock away enough money between 2007 and 2016 to cover most of them.

This is one of those ideas that sounds responsible on the surface but is actually pretty nuts...

...Eventually, the burden became too great, and the USPS began defaulting on the PAEA payments in 2012. But the damage was done. The Postal Service lost $62.4 billion between 2007 and 2016, and its own Inspector General attributed $54.8 billion of that to prefunding retiree benefits. Without the PAEA, the Postal Service wouldn't be doing stellar. (Though you could plausibly blame many of its remaining struggles on the Great Recession.) But it probably would've spent at least part of the last decade making comfortable profits.

"The Postal Service's $15 billion debt is a direct result of the mandate," the Inspector General wrote in 2015. "This requirement has deprived the Postal Service of the opportunity to invest in capital projects and research and development."

In fact, it gets worse. The PAEA also required the Postal Service to invest its retiree funds exclusively in government bonds. Once again, this is a rather unusual practice. While it mitigates risk, it's also a great way to earn really low returns. Then the USPS has to set aside even more money to achieve the same benefit level. Baker calculated that just getting rid of this requirement could make the Postal Service profitable again."


Full article:
https://theweek.com/articles/767184/how-george-bush-broke-post-office

[Buckeyeblue]

1. Why didn't Democrats overturn this in 2009 when we had the votes

Especially given the additional burden the economic collapse in 2008 would have placed on this requirement.

[stopbush]

2. Because the Ds voted to pass it in 2006, that's why.

The act passed by a voice vote in the House and by affirmation in the Senate. No roll call vote was taken.

[FoxNewsSucks]

3. I don't know why some democrats went along with that,

but too many of them did. They should have forced it to have been a party-line vote so republicons would have the blame.

[delisen]

4. This is where rep democracy has failed & Vigilance is needed

The people need the information, time and space, and baseline economic security to fullfil the promise of democracy.


Without this the rich, the powerful, the selfishly ambitious and their lobbyists and power schmoozers make the laws and push us into tyranny . We become subJects instead of citizens.

[Cetacea]

6. Spot on.

It's not surprising that socialistic countries score much higher than we do when it comes to such key areas like happiness, health, longevity and education.

[Autumn]

5. It's a lot worse than Bush and Collins. Democrats voted to pass that bill too. nt

[Cetacea]

7. It gets worse

Cosponsored by Republican John M. McHugh of New York and Democrats Henry Waxman of California and Danny K. Davis of Illinois.

from wikipedia: Bill Pascrell, a Democratic House member from New Jersey, said in 2019 that it was rushed through Congress without due consideration, and referred to it as "one of the worst pieces of legislation Congress has passed in a generation".