A 2 party screw-up

After the mid 1980s the only taxpayer funds involved in the Post Office, amounting today to $100 million a year, are used to subsidize mail for the blind and official mail to overseas voters. In keeping with the new philosophy that the Postal Service should be independent, President Richard Nixon’s Office of Management and Budget administratively moved its finances off budget in 1974. In 1989 Congress did it by statute. None of this made any difference, as exhaustively detailed by the USPS Inspector General in a 2009 report. The OMB and the Congressional Budget Office (CBO) continued to treat the postal service as part of the unified budget, the budget they use for “scoring” legislation to estimate its impact on the deficit. And that’s where the make believe comes from. In 2001 the Government Accountability Office (GAO) put the Postal Service on its list of “high-risk” programs because of rising financial pressures resulting from exploding demand from both the residential and commercial sectors. A year later the Office of Personnel Management (OPM) found the Postal Service had been significantly overpaying into its retirement fund. It should have been a simple matter to reduce future payments and tap into the existing surplus to pay for current expenses. It wasn’t. That’s when make believe began to have a tragic impact in the real world. How the Unnecessary Tragedy Unfolded In late 2002, the CBO announced that this logical change in the retirement contribution formula could increase budget deficits in Congress’s unified budget by as much as about $3.5 billion a year, or $41 billion over the long haul. If the overpayments were used to delay future rate increases, the CBO added, future government receipts would decline, adding to the unified budget deficit. To overcome the budget scoring objections Congress began what in retrospect we can see was little more than an exercise in rearranging the chairs on the Titanic. In 2003 the Postal Service was allowed to use its overpayments to pay off its debt and delay increasing rates for 3 years. After that any overpayments were to be collected in an escrow fund that would be unavailable to the Post Office until Congress determined how the funds would be used. And then came the quid pro quo. The Postal Service became responsible for paying postal workers for the time they spent in prior military service. Up until then, as one might expect, these obligations were paid by the U.S. Treasury. Assuming that obligation essentially eliminated any Post Office surplus during the 10 year scoring window.

ml242 wrote

 . They bitch and bitch about the USPS and if you do just that, you come close to bridging the gap. But instead they spend other peoples money to maintain the status quo.