United States of America: Bailout of the U.S. Postal Service
Description
A bill approved in the House of Representatives and pending in the Senate would provide, through a somewhat indirect route, a substantial bailout to the United States Postal Service (USPS). The USPS is an independent establishment of the executive branch of the Government of the United States.
The USPS ran a $2.8 billion deficit in Fiscal Year 2008, according to the service’s most recent financial report, and by one account it “is facing even larger losses this year due to a sharp decline in mail volume in the weak economy.”[1] Postal services around the world are under stress, with The Economist noting that the recession “has tipped the industry into full-scale crisis” as firms “have slashed direct-mail advertising budgets and embraced substitution as a way to reduce costs.”[2]
The House of Representatives responded to the USPS budget crisis on September 16, 2009 by approving on a vote of 388-32 the “United States Postal Service Financial Relief Act of 2009” (designated as H.R.22). This very brief bill would reduce the amount that the USPS is required to pay into the Postal Service Retiree Health Benefits Fund by the end of fiscal year 2009. According to one news report,[3] this provision means that the USPS “which now faces a liability of $5.4 billion due Sept. 30, would have to pay only $1.4 billion and would be allowed to effectively defer the remaining $4 billion until after 2017.” The account further noted that “the $4 billion will now be added as a potential cost on the government’s books given the fragile state of the Postal Service, and the whole handling of the issue is seen by many as a parliamentary sleight-of-hand.”
The Congressional Budget Office took a more benign view of the legislation, concluding in its cost estimate for the bill that “enacting the legislation would result in on-budget costs of $2.8 billion and off-budget savings of $2.8 billion over the 2009-2019 period.”
The bill has been referred to the Senate, which has not yet taken action on it.
[1] Associated Press, “Postal Service Asks Congress for Bailout” March 25, 2009.
[2] “Dead Letter” October 29, 2009.
[3] “A $4 billion bailout for the Postal Service?” Politico September 24. 2009.
Any Evidence-Based Deliberation:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | Yes |
| Is there any evidence that alternatives to the proposed measure were considered? | Yes |
| Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? | Yes |
| Was such evidence identified? | Yes |
| Is such evidence publicly available? | Yes |
| Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? | No |
| Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? | No |
| Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? | No |
| Did the government state its intention to review the measure within one year of implementation? | No |
Date Discovered:
Implemented: No
Date of inception:
GTA Evaluation: Amber
Source:
See the hyperlinked items in the description of the measure.
Government Response:
- 657 reads
