With all the noise and commotion about funding the government and Obamacare, it would be easy to miss the little story about the difficulty the Post Office is having with their Retiree Health Benefits. The difficulty involves a default to the tune of $5.6 billion in payment for health benefits for retirees. Perhaps the retirees would have done better by investing in gold.
It is not as though it has come as a big surprise to anyone. In a report to the Senate Committee on Homeland Security and Government Affairs, the Postmaster General, Patrick Donahue, informed them of the then unavoidable default that would take place on September 19th of this year.
In the report General Donahue described the Postal Service’s situation that was “in the midst of a financial disaster” at least in part due to system that is “burdened by an outdated and inflexible business model.” No, he was not referring to Congress itself but to the way in which the Post Office is required to prefund benefits.
In typical Congressional fashion of “Do as I say, not as I do,” the Post Office, unlike other federal agencies, is mandated to put aside many billions of dollars every year for the retiree’s health care fund.
The Postal Service is supposed to operate like any other private business that is not funded by taxpayers but must endure heavy handed interference from the Federal government, which unfortunately suggests a sad fate for our system of private enterprise, sometimes referred to as free enterprise (if only).
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