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Ryan: Change pension law for future USPS retirees

Published: Wed, September 21, 2011 @ 12:08 a.m.

By Karl Henkel



U.S. Rep. Tim Ryan of Niles, D-17th, says the federal government needs to change legislation requiring the U.S. Postal Service to front future retiree health-care costs years in advance.

“They’ve been putting way too much money into the pension funds,” Ryan told The Vindicator on Tuesday. “That’s pulled a lot of money out of the postal service and is making the books look worse than they are.”

The postal service pays $5.5 bil- lion annually toward future retiree health-care benefits, nearly as much as the $7 billion it pays toward regular health-care and retiree benefits.

It has paid the money for four years, since late 2006 when Congress easily passed the Postal Accountability Enhancement Act.

Ryan said he voted for the act at the time.

“It’s a different time now,” he said. “It looks like for the next few decades and more, [the pensions] are secure.”

At the time of the legislation, the postal service had its busiest year ever, and the nonpartisan Congressional Budget Office estimated the bill would result in “savings of $44.2 billion and offset budget costs of $45.8 billion” during the period beginning in 2007 and ending in 2016.

The net difference: a $1.5 billion savings during that particular decade.

But the postal service is facing a $9.2 billion deficit this year, a year after it posted an $8 billion deficit.

President Barack Obama on Monday unveiled a plan to save the postal service from potential insolvency, allowing it to use $7 billion from its overfunded pension account and postponing the $5.5 billion pension payment due at the end of the month.

He also recommended the possibility of ending Saturday mail, something Ryan wasn’t too keen on.

“I’ve been a supporter of keeping the Saturday service because it keeps it competitive,” he said. “At this point, everything should be on the table.”

Ryan noted that the current postal-service structure, minus the extra pension-funding requirements, is still profitable.

The government’s questionable use of the postal service’s funds goes back further than 2006.

Congress in 2003 passed the Postal Civil Service Retirement System Funding Reform Act of 2003, which shifted $27 billion in military pension obligations from the U.S. Treasury to the postal service.

The postal service, an independent, private-public hybrid organization, and its expenses are considered off-budget by the government, so by shifting $27 billion to the USPS, it effectively chopped that money from the budget deficit.

Ryan declined to comment about the 2003 legislation.

He, along with all 18 Ohio U.S. Representatives from 2003, which included Ted Strickland, John Boehner and Rob Portman, all voted for the bill.

That list included U.S. Sen. Sherrod Brown, a Democrat from Avon, who told The Vindicator in a statement that reform to the postal service is needed.

“Any consolidation proposal must be carefully considered to ensure it would not lead to severe job losses, service degradation, and an undue burden on small businesses,” he said.


1UnionForever(1470 comments)posted 4 years, 8 months ago

Eliminate the future pension credits for all postal workers. Freeze the pension system as it stands today. Let a 401K type program be the postal retirement in the future like those of us in the private sector who have 401K with company match, say 6% with 3% USPS match.

Yes, 5 day a week service makes sense since on-line bill paying and the internet e-mail has eliminated most needs for the postal service.

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2candystriper(575 comments)posted 4 years, 8 months ago

A 2007 Federal Trade Commission reported the USPS doesn't pay taxes, including property tax, vehicle registration fees, and borrows at low interest rates through the Treasury. The FTC report estimated that federally imposed restraints on the Postal Service as of fiscal 2006, cost taxpayers between $330 million and $782 million annually, while special benefit cost were between $39 million and $117 million. That's a range of $339 million to $899 million per year.

They should offer electronic delivery of letters. Allow citizens to have mail for your address scanned at the post office of origin and emailed to you instead of physically delivered.

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3retiredfella(31 comments)posted 4 years, 8 months ago

All I see is inbreed politicians calling for cuts for the few Americans that have jobs. I believe our inbreed politicians should have their pay cut in half, no benefits and only SS like the laws they pass for the American people. Lead by example inbreeds.

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4palbubba(794 comments)posted 4 years, 8 months ago

Congress and Timmy lap dog screwed up in 2006 passing a feel good law. One thing that has proven to be true, the government cannot be trusted to borrow from a retirement program, think Social Security. The ONLY reason Social Security is in financial trouble is that the government has stolen the money out of the fund to buy votes with their entitlement programs. First cut delivery to 5 days a week, that is all we get on holiday weeks anyway. If that doesn't work then cut it to four days.

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5JimmyB(18 comments)posted 4 years, 8 months ago

My comment is not just about USPS....ALL federal employee pensions need to be eliminated. I have a 401K--so can they. They're already paid above-average wages (some well above), the taxpayer doesn't need to support them after they put in a minimal amount of years. WHY ARE THEY SPECIAL?

Then they retire at an early age and go out and get another job on the public doll. Double and triple-dipping.

The real Ponzi scheme.

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6commyliberal(94 comments)posted 4 years, 8 months ago

Instead of throwing the baby out with the bath water, Tim suggests a good fix for the Post Office. If all pension funds were required to fund the way the USPS is required to fund their pensions those pension funds would all be in the red too. This is just an attempt to bust the USPS union.

Instead of complaining about how some bargained employees have certain benefits(and you don"t), why don't more workers stand up and fight for pensions & other benefits? Are we all too lazy and tired to fight for things our grandparents had to fight to receive?

As for who Tim Ryan represents, I do believe there are a "few" USPS workers in the area.

Delphi retirees did get a raw deal but guess what, so did the steel workers in the 1980's. Were you Delphi workers crying when all those steel mills shut down & those big corporations moved overseas after LTV & other Holding Companies raided the pension systems? This crap has been going on for 30+ years.

Does anyone remember how Northside Medical system was raided and stripped of assets by a certain holding company? Now they want to eliminate nursing jobs.

Laws need to be changed but until the middle class takes their nose out of the sale ads and starts looking out for their neighbors, nothing is going to change. The middle class will continue to shrink .

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7NoBS(2697 comments)posted 4 years, 8 months ago

Sure, pull all their pension funds. Let another batch of promised pensions go unfunded. If the USPS has a pension fund that's still solvent, they ought to guard it jealously, because there are plenty of jealous and greedy cretins out there who envy it and want to get their fingers into it, so they can 'whizz' it all away, like they've done with any other pile of someone else's money that they can glom onto.

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8khaos(8 comments)posted 4 years, 8 months ago

UnionForever, This country has large rural regions that have many people without internet access. They still use the USPS for what others do on line. While times have changed and the USPS needs to change with them, don't assume what is common in your life to be universal.

candystriper, While those are good ideas, the reality is that the cost to change an extremely large infrastructure to handle physical delivery to electronic would be an astronomical cost that would take years to implement. They should start with it, but it would be a long, long time before they would see any cost benefit.

retiredfella, Inflicting insults does nothing to bolster a weak argument based only on an emotional reaction.

JimmyB, You are clueless as to what a Ponzi scheme actually is.

commyliberal, Excellent points. Since I agree with you I will probably also be labeled as a liberal, even though I'm a conservative, just not a Republican conservative. The GPO really ruined that word.

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9Phil_Eng_Amer(10 comments)posted 4 years, 8 months ago

It’s hard to see this plan as anything other than a delay of the inevitable. You hope that using this money set aside doesn’t come back to harm the USPS in the end, but given their falling net income and drop in volume, the trends don’t look good (http://eng.am/oBezLD). Privatization doesn’t have to be the answer, but until the USPS can put in place a strategy to account for the mounting losses, these mini-bailouts will only serve to hurt the USPS more in the long-term.

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10jerseyclerk(1 comment)posted 4 years, 8 months ago

Jimmy B,
Don't be jelous we make more money then you. It's a living wage. I don't know about you, but in NJ $25 an hour is enough to get buy...but it certainly isn't making us rich. You should have taken the postal exam, & could be "special" too!

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11alh945(1 comment)posted 4 years, 8 months ago

To cut costs, Congress needs to look at the total postal worker compensation package, and get it in line with private industry. The postal service benefits package far exceeds that of private industry, from pension plans, retirement age, vacations, sick days, etc.

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12candystriper(575 comments)posted 4 years, 8 months ago


... I think the post office union will need to strike. $12 billion in workers comp liability...$10 billion loss...long drawn out recession equals insolvency...the pensions will be protected.

... What is not fair is the soldier who serves 5 tours leaves the military with 15 years and has no pension but a clerk with 15 years leaves the VA has a pension.

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