Six year ago, the U.S. Postal Service rode high on a tidal wave of mailings touting local real estate and teaser-rate mortgages. The self-funded system declared a $1 billion profit in 2006 â?? a rarity during the USPSâ??s four decades of quasi-independence from the federal treasury.
Things were looking so good that Congress in late 2006 passed a â??reformâ? law requiring the USPS to pre-fund its retireesâ?? health care benefits to the tune of $5.5 billion a year for 10 years. While that served a desire to make the federal deficit look smaller, pre-funding retiree health benefits was unheard of in the private sector. Yet the Post Office and its four unions went along since they had negotiated a long-term contract that would shrink its labor force through attrition as the Internet gradually ate into its first class mail and advertising.
Things didnâ??t work out exactly as planned.
Read Full Article »