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No other company has to do this. They created this rule specifically to make the USPS run at a loss so they would have a reason to gut it. And that's what they're doing now, gutting it.

John Oliver had an episode about this: https://youtu.be/IoL8g0W9gAQ

⬐ rsj_hn

> No other company has to do this. They created this rule specifically to make the USPS run at a loss so they would have a reason to gut it.

This is a great reason to not get your news from John Oliver, as everything you have said in this comment is false (except I'm sure the link works).

"Prefunding" a retirement account is the only way a private retirement account is ever funded. Normal people call it "set aside" or "fund". The alternative is to

1) not have a retirement benefit,

2) a social security pay-as-you-go system, which is not legal for any private company to have. In a pay-as-you-go system, there is no pension fund but workers get paid benefits from the company's general revenue. You can understand why that may be legal for the government, but not a private business (which can go bust). Private businesses are forced to set aside money for retirement benefits as the liabilities accrue. Obviously this creates a pain point when an arm of the government is privatized. But that doesn't mean we allow private companies to pay pensions out of general revenue just because they used to be public in the past.

Even those companies which no longer offer defined benefit plans but only make some 401K contributions still make those contributions to a fund in the worker's name each year, before the worker retires. They "prefund". All private companies "prefund". Have you heard of the phrase "pension fund"? That's the fund into which companies must make payment ahead of retirement when a worker is working and then the worker draws those down when he retires. Forcing companies to set those funds aside ahead of time for each worker is how we fight the temptation to skimp on those contributions and kick the can down the road. Companies that do skimp on pension fund contributions are committing fraud and this creates a big mess as the government has to bail them out or workers end up not getting their retirement checks.

What's interesting is where this misinformation came from as it's so popular on the left. There are all sorts of conspiracy theories about "gutting" the post office, but what I think is the key problem is the refusal to acknowledge there might be a tension between the generous retirement benefits negotiated by the postal workers union and the fact that the post office is facing financial shortfalls. And instead of acknowledging these real trade offs, it is some supposed unfair accounting rule that is causing problems for the post office and not, you know, all the money they are promising to pay workers when they retire.

⬐ rahimnathwani

Right. Generous retirement benefits for public sector employees are a trick played on taxpayers by politicians and those responsible for negotiating the contracts (those representing the govt, and unions representing current govt employees).

Most people think government employees are paid much less than they would be in the public sector, but that's because it's not obvious to most of us:

a. just how much it costs to fund a defined-benefit pension scheme, when asset yields are so low

b. how early people can retire with a 'full pension'

c. the low performance bar and difficult of firing a govt employee, even for cause

⬐ rahimnathwani

"No other company has to do this."

This is false. Every private company has to do this.

⬐ notatoad

do you have a source for this? the USPS claims "Unlike any other public or private entity, under a 2006 law, the U.S. Postal Service must pre-fund retiree health benefits. [1]" and everything else i've seen on the topic agrees that this is a requirement unique to the USPS.

[1] https://about.usps.com/who-we-are/financials/annual-reports/...

⬐ cperciva

Private companies have to fund retirement benefits. The US government doesn't -- which is why there's arguments over why the US debt is around 20 trillion (current bonds outstanding) or over 100 trillion (including unfunded social security benefits).

⬐ rahimnathwani

Also, unfunded US govt retirement benefits come in two forms:

A) future pension and medicare costs, for people who are alive today, and

B) future retirement benefits for current and former govt employees

IMO (B) should be prefunded (or at least have an actuarial value on the govt balance sheet) because it's an actual liability.

But whether or not (A) should be treated the same way depends on whether the benefits are fixed as of now, or whether they can be reduced/eliminated if they take too large a part of the total budget at the time they're due to be paid.

⬐ cperciva

Agreed, although (a) the fact that social security is the "third rail of politics" suggests that while it's not a contractual obligation like employee retirement benefits, it's effectively an unavoidable obligation; and (b) even if the future value of benefits to be paid out isn't recorded as a liability, the social security taxes paid should probably be treated as "deferred revenue" since that revenue is at least theoretically being gathered for the purpose of paying the future benefits in question.

⬐ rahimnathwani

There are two separate things:

1. pensions (what I was talking about)

2. retiree health benefits (what you are talking about)

For #1, all private companies have to pre-fund them.

For #2, private companies don't usually have to pre-fund them because (i) most companies don't offer medical insurance for retirees, and (ii) even if they do, they are discretionary (i.e. unlike the pension, the benefits can be cut/eliminated).

⬐ rsj_hn

Correct. The 2006 law being referenced was trying to lock in retirement health benefits to USPS workers that were generally not available to private sector workers. It was one of the many pieces of union pork in that bill, and there is no end of irony that it is being portrayed as some nefarious Republican plot to kill the post office. It is not about how the benefits are funded but that congress mandated these benefits that disadvantages the post office by raising their labor costs.

Of course the post office is advantaged in many other ways -- e.g. it is illegal for a private agency to deliver mail, only the USPS is allowed to do that. Fortunately, the post office is magnanimous enough to allow private courriers to deliver mail if they purchase a stamp and then cancel it! Why must they purchase a stamp and affix it to the letter? Because it is illegal to place anything in a mailbox (even if you own the mailbox) without postage and only the USPS can collect postage. The USPS is also the only company that it is illegal to undercut by offering letter delivery for less than the USPS charges. IIRC, you have to charge at least six times as much, thus FedEx will never be able to outcompete the USPS on letter delivery as it's only allowed to operate under the "extremely urgent" mail loophole which requires higher charges mandated by law.

"The USPS actually enforces these rules from time to time. For example, Equifax learned a terrifying lesson in 1993. Armed USPS inspectors raided the company’s Atlanta headquarters to determine whether or not the letters the company had been sending via FedEx were indeed “extremely urgent” as required by the Private Express Statutes. The letters didn’t pass the test, and Equifax ended up having to pay a $30,000 fine."[1]

You can read more about the Private Express Statutes on wikipedia: https://en.wikipedia.org/wiki/Private_Express_Statutes

See also the American Letter Mail Company, which was a private rival to the post office that was outlawed by the government.

[1] https://www.mentalfloss.com/article/26424/why-cant-you-start...

⬐ rahimnathwani

"it is illegal for a private agency to deliver mail"

At least there's some rationale for this. National postal agencies typically have monopolies, but the flip side is they have universal service obligations, i.e. they have to deliver mail to even unprofitable locations, e.g. rural areas.

This is analogous to taxi regulation: in theory, the monopoly granted to medallion holders has a flip side: rates are fixed, and they can't discriminate between riders based on destination.

In practice, taxis in NYC skirt these regulations pretty often.

⬐ rsj_hn

Yeah, I understand the logic. But I was pointing out that yes, while Congress does mandate retiree health benefits for postal workers, it also advantages the USPS in other ways. It is a weird monopoly, with all sorts of carve outs. I am not advocating for some kind of drastic postal reform one way or another.

https://m.youtube.com/watch?v=IoL8g0W9gAQ

They're not being funded through taxes.

⬐ Alupis

Do government bailouts not come from tax payer money?

⬐ oblio

1. How many bailouts have they received?

2. Do you think it's a bailout in a year when the US is supposed to have mass voting by mail?

3. (whataboutism) How many (especially big) US companies haven't received help in 2020?

Here is a good explanation why there were profitable and now they are not (tldr regulations) https://youtu.be/IoL8g0W9gAQ

For those wondering why the USPS cannot turn a profit, Jon Oliver does an excellent job of explaining: https://www.youtube.com/watch?v=IoL8g0W9gAQ

⬐ bobmalone123

Jon Oliver is a very partisan comedian and therefore cannot be trusted. And when I say ‘him’ I refer to the very politicized team of writers and their network.

⬐ erentz

Ok so you don’t disagree with any points.

⬐ whatever1

At least he provides the references to the info that he presents. I assume that you did your research and the vast majority of the information he presented was verifiably false. Can you please share your findings with us ?

⬐ jovial_cavalier

Watch literally any episode of Jon Oliver on something you've glanced at the Wikipedia article for, and his partisan bias is grossly apparent.

Guy you're replying to didn't really make an argument, no, but it's worth ridiculing someone for posting Jon Oliver, because it is a thing to be ridiculed. That's about as bad a linking to a Bill O'Reilly op-ed as far as I'm concerned.

⬐ whatever1

Dismissing facts based on the accompanying commentary is fundamentally flawed. You may not agree on the commentary part of a journalistic piece but you cannot dismiss their stories a priori. Same applies for Fox News.

⬐ jovial_cavalier

The fact that he chose to share Jon Oliver instead of Jon Oliver's sources indicates to me that he has not read those sources.

It has for many years:

https://www.inthepublicinterest.org/wp-content/uploads/ITPI_...

Discussed here:

https://news.ycombinator.com/item?id=23911696

And love him or hate him John Oliver boils this down to:

https://www.youtube.com/watch?v=IoL8g0W9gAQ

John Oliver did an interesting video on this: https://www.youtube.com/watch?v=IoL8g0W9gAQ&t=4s

TL;DR: Deliberate government action to defund them has resulted in them having way less money than you would expect.

⬐ nemacol

It has been a while since I have seen that one, but if I recall the two main points were

1 - Forced to save billions over a short period of time for retirements benefits. 2 - Inability to set their own prices, like a business would.

The extra business from Amazon should have been a massive boon to USPS. But it seems the ridiculously low rate they got into, plus the couple factors above (and I am sure many others - like being required to maintain rural routes at a loss) has put them in a bad situation.

⬐ nybble41

They should just spin off the USPS as a purely private enterprise—no more monopoly on letter delivery or bureaucratic micromanagement regarding prices—and instead periodically solicit bids from all the carriers (including the former USPS) for the core services. Whoever wins the bid would commit to flat-rate nationwide delivery of first-class letters and receive a negotiated subsidy for each delivery depending on the route.

Are you referring to the episode[1] (posted May 10th) or was there another, more recent one?

[1] https://www.youtube.com/watch?v=IoL8g0W9gAQ

⬐ fluffything

Yes, that's the one.

⬐ throwaway0a5e

I can't watch right now but does he do a decently bipartisan take on it?

At the time the requirement to fund pensions through 2050ish was passed it got support from republicans who wanted to make life financially harder for USPS and democrats who wanted to guarantee that employees (union employees, so making sure they get a good deal is even more important) would be provided for and that USPS couldn't weasel out of it's obligations as part of a future bailout, perhaps by a congress that would have given employees the shaft.

⬐ tehwebguy

I’m always looking for videos that “debunk” Oliver to make sure I’m getting reasonable information but I never find any. Not sure if this means he’s usually right or not!

⬐ throwaway0a5e

I've been following police violence and civil liberties for more than a decade now. I like to think I'm pretty well informed on the issue. His episode on riots didn't say anything wrong but he just kinda laid it all at the feet of the cops for shooting one too many unarmed black people when that's either a red herring or the straw that broke the camels back depending on how cynical you are.

I get that he has to take a complex situation and make it into something a nationwide general audience can laugh at but he seemed to go to great lengths to avoid casting shade at city and state politicians (and by proxy voters) who bear a lot of responsibility here.

He didn't say anything wrong but I was really disappointed how one sided it was. I know he's a comedian. I know he has an agenda. But it makes me suspect his other stuff might be tilted.

⬐ tehwebguy

No, if you mean the recent one called "Police" you are mistaken. At about 5:00 in he spends 6+ minutes talking about the decisions that put police in this position.

* "Look, clearly, the police are just one part of a larger system of inequality, and for tonight we're going to focus primarily on them"

* Then spends the next few sentences talking about how TV and film have painted an extremely unrealistic picture of police in the US

* The history of policing and the policies we created it based on (slave patrol)

* The Jim Crow laws & segregation that drove policing

* Racist voters that tried to keet regions white

* The media's whitewashing of the civil rights movement

* Nixon & Regan's drug war + broken window policing

* Stop & frisk policy and how more than 3/4 were black / hispanic

* Then the big bomb at 9:05: "And let's be clear here, Democrats were very much involved in that, from big city mayors all the way up to this guy [shows a supercut of Bill Clinton in '93 promising 100k more police on the streets in various speeches, then "another 50k more in high crime neighborhoods"]"

* This all came hand in hand with cutting every social service possible and pushing all of the extra work onto police

* "So, while we should absolutely be angry at the police right now, let's also be angry at the series of choices that left them as essentially the only public resource in some communities"

So he spent around 15-20% of the total time making it incredibly clear that while this is a police problem not a police only problem.

What I'm more interested in knowing is, are his facts wrong? Or maybe is he leaving out an entirely separate side of things that point to the real issue? That's what I always wonder in the back of my mind.

⬐ throwaway0a5e

You or I must be thinking of a different episode. I don't remember ANY of that. If he did say all of that then he did do a good job.

> why can't I choose a shipping option that costs something less than 50 cents to anywhere in the US?

Not an American, but I believe there's a 2006 bill that prevents USPS from selling services below the cost. Learned about it in a John Oliver's video [1], mentioned somewhere else in this thread. I'd guess that Chinese epackets are part of an international agreement, so they are exempt.

> The system was illogical.

It would be illogical if USPS had flexible costs.

But the USPS costs are more or less fixed. The mailman will go his round every day and will get his salary, even if he has little to deliver. So, you may as well have him deliver Chinese epackets, for whatever price the Chinese are willing to pay. And that's a good deal for the public. Otherwise the $1 trinket for China would be $6 (if Chinese had to pay full shipping), or $10 (if bought through a US-based reseller).

[1] https://www.youtube.com/watch?v=IoL8g0W9gAQ

Stephen Colbert did a surprisingly interesting segment on USPS and this very question last month:

https://www.youtube.com/watch?v=IoL8g0W9gAQ

⬐ ShamelessC

That's John Oliver.

⬐ oth001

Same thing

⬐ bzb3

I can't tell one liberal talking head from the other.

⬐ neom

Wow I'm an idiot.

*John Oliver