The U.S. Postal Service owes $5.6 billion to pay into its unionized workers’ health fund. It does not have the money.
Let’s call this delay what is really is: a default. It is a prelude of things to come to the entire U.S. government budget.
This is the second time in two months that the USPS has missed a deadline. It therefore owes over $11 billion. It is not going to pay. It is busted. It cannot pay.
The USPS’s leadership is trying to get Congress to eliminate Saturday delivery. Second, it wants out of its annual $5 billion payment for future health benefits.
The USPS is expected to record $15 billion in red ink this year.
The USPS has had 6 years to come up with the $11 billion
The unions think they will get retirement health benefits. They won’t.
The union members are as naive as voters who thing Medicare will pay for their health care costs. It won’t.
But everybody pretends this can be papered over.
Watch. The government will let the USPS off the hook.
The USPS is out of accounting tricks. It can’t pay. The head of the USPS has said this: “We’ve done a lot to reduce cost out of our system. The problem now is this: There’s nowhere to go.”
The union says Congress is to blame.
“The key thing is Congress must act during the lame-duck session and get this whole thing behind us,” said Donahoe, referring to the few weeks lawmakers will be in session after the election before a new Congress takes office in January. “We can’t have a Postal Service where customers are constantly worried about our ability to make payments.”"That’s no way to run a business,” he said.
No, it isn’t. But the USPS is not a business. It is a federal agency, no matter what anyone says. That’s why it has to come begging to Congress. “More time. We need more time.”
The Senate has already voted to let the USPS off the hook for the payments. The House has not passed the bill. It wants to stop Saturday delivery and close tiny rural post offices. So, the bill is stalled.
Congress always buckles.It will let the USPS off the hook. It will let the USPS kick the can down the road.
The day of default is coming.
Technically, the USPS is independent of government, but it is subject to Congressional control. So, it really is an agency of government.
When the USPS defaults on its health care obligations and its pensions, the USPS will ask for a bailout through ERISA. It will get it.
The taxpayers will be told to pay. They won’t pay. Then the Great Default will come.