USPS's primary business, delivering letters, was by 2006 clearly in terminal decline, with no guarantee that parcel volume would increase to compensate. Many, many employees of newspapers—the other industry that in 2006 was facing similar danger—wish that Congress had mandated something like this for their pensions.
2) The USPS is supposed to be unprofitable--it's supposed to service everyone. If you are going to hound the USPS about profitability, then they should be allowed to drop service in rural areas. The easiest way to decrease pension obligations is to permananetly drop a whole bunch of workers from unprofitable areas, no?
The problem is that the arguments around the USPS aren't made in good faith. The goal is to bankrupt the USPS so that they have to sell off the extremely valuable real estate that many USPS facilities sit on.
I wrote that the newspaper industry was the other that by 2006 was clearly in decline for the same reason as USPS letter delivery: The Internet. Most industries aren't like this.
>2) The USPS is supposed to be unprofitable--it's supposed to service everyone.
I said nothing about profitability. The Constitution also says nothing about profitability or anything else about USPS, other than that Congress has the authority to establish post offices. That's it.
That said, Congress has historically required USPS to self-fund as much of its operations as is practical. Were this not the case, postage rates would never have risen in history, before or after the 1971 reorganization of the cabinet-level agency to the quasi-independent entity that it is today. Nor would it have consistently issued new stamp editions to sell to the public.
More to the point, making sure future USPS pensions are funded has nothing to do with profitability, at least directly. It's simply good sense given the ongoing and, in all likelihood, irreversible decline toward zero non-parcel volume. Even if the USPS were mandated by law to always run at a slight loss to maximize customers' savings on postage, pension prefunding would still be prudent.
>The problem is that the arguments around the USPS aren't made in good faith. The goal is to bankrupt the USPS so that they have to sell off the extremely valuable real estate that many USPS facilities sit on.
First, there is no major political movement in the US to "bankrupt the USPS", presumably in advance of a sale. No political party has such in its platform. (If you reply that the very absence of such is proof that the plan exists, I'll just throw up my hands and give up now.)
Second, there's nothing in the Constitution that would prohibit USPS from being privatized, which has happened in most European countries, usually with little controversy.
I'm not entirely clear on why this was, but it may have been that they were not fully insured or that promises made by the steel mills were not backed by anything. In these cases, some pensioners actually had to give money back [1].
This happened to my grandfather, who worked in the steel mills in western Pennsylvania. If you ever wanted to see him red-faced mad, this was the topic to discuss.
Yes, the backstop isn’t 100% and has a cap, but the pension is will never go “broke”.
I believe the coverage is something like 60% up to $64k/yr.
> If you look at multiemployer plans, those people worked in coal mines, driving trucks, in bakeries — typically physical, difficult jobs, and they certainly earned the pension they were promised by their union. Now, some of them are 70-years-old and in retirement and have the terrible prospect of having their pension cut.
> There’s a government backstop for private pensions, but the government backstop for multiemployer plans is very modest
If the entity that owes you does not have the power to print money, then there is always a risk of non payment. And how much of a bailout you get depends on your political weight.