Tad DeHaven

Postmaster General Michael Donahoe has occasionally remarked that the U.S. Postal Service will end up in a Greek-like crisis if Congress doesn’t allow it to reduce costs and operate with more flexibility. Michael Schuyler, now with the Tax Foundation, examines the analogy between Greece and the USPS in a paper that was released on Monday.

The “good” news for the USPS is that its fiscal situation isn’t as bad as what the Greeks are dealing with—at least not yet. Whereas previous Greek governments intentionally understated deficits and debt until it caught up to the country in 2009, the USPS hasn’t tried to hide the fact that its prospects are bleak. In addition, the USPS has been able to shed excess workers (through attrition) over the past several years, while recent attempts by the Greek government to cut its bloated workforce have been met with rioting.

The problem is that powerful interests maintain convenient opinions on some of biggest issues facing the USPS. Mike singles out for particular scrutiny the postal employee unions for continuing to pretend that the USPS would be alright if it didn’t have to make annual payments to “prefund” retiree health care benefits. Both of us have been critical of this claim, but I think Mike’s latest reality check is worth sharing in its entirety:

Tad DeHaven

Tad DeHaven is a budget analyst at the Cato Institute. Previously he was a deputy director of the Indiana Office of Management and Budget. DeHaven also worked as a budget policy advisor to Senators Jeff Sessions (R-AL) and Tom Coburn (R-OK).


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