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Post Office Can’t Meet Its $11 Billion Payment

Written by Gary North on October 1, 2012

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.

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5 thoughts on “Post Office Can’t Meet Its $11 Billion Payment

  1. […] everybody pretends this can be papered over.Watch. The government will let the USPS off the hook.READ MORE October 1st, 2012 | Tags: default, Post office, Unionized Workers, USPS | Category: […]

  2. This is the end result of big government and private central banks: they keep cutting back and back on services to the people who pay the bills, but they never reduce the amount of taxation to offset the loss of services. You eventually end up paying something for nothing. It all goes to interest payments which are just made-up electronic digits that people believe they must enslave themselves for life to pay off.

  3. another company obma asked them to hold off laying off people until after his re election.

  4. The P.O. dept was converted to the "private Corporation" model mainly so that the lazy, unproductive, sinecure employees could get around the gummintl restriction on unionizing federal employees. So, they create a inept, inefficient "Private corporation", on the pretense that it would be more efficient. Well, that was a flat-a$$#& failure! BUT, the important goal WAS attained, the ability to unionize the worthless postal workers so they could engage in "tax dollar recycling". The democrap politweasels give them more and more of our tax dollars, collect their union "dues", turn it over to the corrupt union thugs, who skim off their share and donate the rest back to the democrap politweasels' campaign funds. The Politcrooks skim some of the money and use the rest to get elected or re-elected, then vote the union thieves more of our tax dollars, and around and around it goes. Tax dollar recycling, except each cycle, the taxpayers get mugged for more and more money. Let it fail, then turn it over to a real private corporation. Gummint can't do anything right. They screw up EVERYTHING they get their dirty fingers into.

  5. Letter carrier says:

    What you clueless people don’t know is how the Gov. Has raided this fund the PO has “defaulted” on. Tell me what company ANY company that is required to prepay their health care and retirment pensions for over 75years ahead! It is a cash cow LIKE social sec for gov to get their fingers on money and be gone before have’n to be accountable for it!