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Friday, August 28, 2009

James Adams: Congress will do to health care what it did to the post office

James Adams pens a column in the Union Leader recounting Congressional efforts to "reform" the Post Office into backruptcy.
During this same period, the Internet was thriving. Yet in spite of that, mail volume increased by more than 2 billion pieces a year until 2006. Then came Congress to the rescue.

Congress created the Postal Accountability and Enhancement Act of 2006. Its intent was to help the Postal Service continue to grow and be more competitive. The result, as so often happens when Congress gets involved, was disaster.

U.S. Rep. Henry Waxman, D-Calif., made sure the bill included a requirement that the Postal Service pre-fund its retirees' health benefits to the tune of $5.4 billion a year over a 10-year period, for a cost of $54 billion in a decade.

In 2006, the Postal Service had a $900 million profit. In just a little over two years, the $5.4 billion a year -- or $385 million a month -- has put the Postal Service in a free fall from which it may not be able to recover. The Postal Service is scheduled to lose $7 billion this year. Factor out the $10.8 billion the service has paid to the government, and it had a profit during this difficult economic time.

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