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.