May 18, 2011 6:21 PM GMT
What did we learn from the bailouts of 2008 and 2009? Very little, based on what we're now seeing with the U.S. Postal Service. [..]
The position of the Postal Service appears to be that (1) it doesn't have the money to make the $5.4 billion in payments it is required by law to make this year in order to prefund its growth in pension liabilities, (2) it shouldn't have to make the payment, since it has already overpayed $75 billion for this purpose in what it describes as an inequitable arrangement, and (3) if the accumulated pension surplus were returned to the Postal Service, it could be better used to help fund health benefits for USPS employees.
The details for the latter arguments are contained in this 2010 report from the Office of Inspector General of the United States Postal Service. Here's what I learned from the report. In 1971, the Post Office Department of the U.S. government was given semi-independent status and became the U.S. Postal Service. The arrangement was that the federal government would pay pension costs for service through 1971 and the USPS would pay pension costs for service after 1971.