Last week, amid Russia’s ruthless invasionUkraine and the rapid passage a massive 2,741 page. $1.5 trillion spending bill, it’s not surprising that enactment of a postal reform bill (H.R. 3076) got little attention.
Touted as a long-awaited “bipartisan” measure, the postal legislation, 15 yearsThe fact that gestation is noncontroversial is no surprise.
Fast-tracked through Congress, the bill shifts tens of billions of dollars in liabilities from what is supposed to be the “self-financing” U.S. Federal taxpayers can use the Postal Service.
If the Postal Service had a company name like “JP Morgan” one could imagine how such a bailout would have drawn immediate opposition from across the political spectrum.
How did this happen? Here’s how this little drama unfolded:
Act 1, Scene 1: House Fast-Tracks Passage
The House of Representatives passed the House of Representatives on February 8, with the support of both the Biden administration as well as the powerful postal unions. Postal Reform ActBy a vote 342 to 92. One might have thought that House Republicans would at least have second thoughts. But 120 House Republicans joined with the Democratic majority.
Act 2, Scene 1: Sen. Scott’s Objection
The House bill appeared to be on a smooth track to Senate passage. However, Sen. Rick Scott (R-Fla.) raised fiscal concerns and asked the Senate to take a closer view of the bill. He then said that he would offer an amendement.
So, on Feb. 14, when the bill was brought to the Senate floor for consideration under the Senate’s unanimous consent rule, Scott objected.
He did this because the Postal Service had accumulated tens to billions of dollars in unfunded obligations regarding postal retiree health care costs. (The Government Accountability Office estimated these costs at $2.5 trillion in 2020. $75 billion.)
These very real costs will not disappear with the legislative reorganization for Postal Service health care financing. Instead, the House bill shifts those costs onto the taxpayer by dumping them onto the financially troubled Medicare program.
Scott explained that he was simply asking for the Congressional Budget Office’s long-term review of the impact of such a major shift in cost on Medicare and its beneficiaries. Sen. Ron Johnson (R-Wis.) noted that there was no Senate hearing or debate on this measure.
Scott’s objection was reasonable. The U.S. The U.S. Postal Service has been losing billions of dollars over the years, but Medicare, the massive federal health program that serves senior citizens, is also in serious financial trouble.
In four short years, Medicare’s huge hospital program faces insolvency, meaning that, unless Congress acts, Medicare patients face serious benefit payment cuts.
Medicare spending is increasing at a rapid pace, and it is also generating a huge taxpayer debt in the form long-term unfunded obligations.
Medicare’s trustees estimate the program’s long-term unfunded obligations at $48.3 trillionThe dollar amount of benefits promised that are not financed. This is equivalent to $150,000 per American.
More to Scott’s point, with Medicare spending accelerating, piling on billions of dollars of additional unfunded obligations is pouring gasoline on Medicare’s fiscal fires.
The House postal bill also places a burden on postal retirees. The bill would force future postal retirees to leave the superior Federal Employees Health Benefits Program, (FEHBP), and into traditional Medicare. They would then have to purchase supplemental coverage and pay two premiums instead of one to fill critical benefit gaps, including catastrophic coverage.
This supplemental coverage helps to fuel excess demand. drives upMedicare beneficiary costs and taxpayer costs even greater
Act 2, Scene 2: CBO Report
While the CBO did not account for these unfunded obligations in its estimate, or the House bill’s budgetary effects for the next 20 years, as Scott requested, the senator learned from the CBO that the bill would add at least $5 billion to the nation’s deficits.
The CBO also dropped a nasty bomblet. It said that, even with enactment of the House bill, it was still “unclear” how the Postal Service would pay for its “ongoing obligations” for health care, including health care for its retirees, after 2031.
Act 2, Scene 3: Scott’s Amendment
The Medicare cost issue was ignored or downplayed by Congressional bill sponsors.
Scott made a simple amendment. The Postal Service should be required by Medicare to reimburse any additional costs incurred during any transition of postal retirees to full Medicare coverage.
If the Medicare cost issue wasn’t a problem then there would be no objection.
The Postal Service, as noted, is supposed to be a self–financing agency. It is, unfortunately, failing as self-financing agency. The Postal Service has been accumulating staggering debts and running up billions of dollar annual deficits. $188 billion(about $580 per capita in the U.S.)
This debt includes, naturally, its enormous unfunded pension and health obligations. The agency is in financial trouble.
In offering his amendment, Scott asked his Senate colleagues in effect whether America’s taxpayers should be targeted for such a massive cost-shift—a cost-shift that is justified only by the agency’s notorious financial failures.
Act 3, Scene 1: Senate Floor Votes
The Senate approved the postal reform bill on March 8.
Scott requested unanimous consent to the Senate under the current Senate rule. to consider and voteOn his amendment to require that the Postal Service reimburse the Medicare program for any additional Medicare costs.
Johnson, as well as Sens. James Lankford, R-Okla.; Mike Braun, R-Ind.; and Charles Grassley, R-Iowa, cosponsored the amendment. The Scott amendment was blocked by Senate Democrats who objected and blocked its consideration and vote.
The CBO, as noted, confirmedThe bill would increase deficit. Scott then made the following: “point of order” against the bill because it violated the Senate’s budget rules.
In response, Sen. Bernie Sanders, I-Vt., a socialist, made a motion that the Senate waive the budget rules to advance the House bill. Remarkably, Sanders’ motion passed by a vote of 68 to 30,Surprisingly, many Republican senators have backed the bill.
After blocking debate on Scott’s amendment and waiving the budget rules, the Senate passed the House postal bill by a lopsided 79-19 vote.
Conscientious legislators are often in the minority.
Curtains
Though the postal reform debate is over, at least for now, Scott’s performance was a profile in statesmanship.
The senator is aware that the bigger and better are broader Medicare debate is inevitable, and that Medicare’s future financial stability is essential to fulfilling its promise to deliver high-quality care to a large and growing cohort of senior citizens.
Medicare reform will soon be among America’s greatest policy challenges.
Scott reminded his colleagues, too, that throwing billions upon billions of taxpayer dollars at an issue is not a solution.
Bailouts cannot be substituted for real postal reform, as Heritage analysts have long insisted, and taxpayers’ pockets are not inexhaustible.
Maybe they’ll listen next time.
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