Oct. 13 (Bloomberg) -- Refunding as much as $75 billion that the U.S. Postal Service claims to have overpaid to a U.S. Treasury pension fund wouldn’t fix the longer-term finances of the service, the Government Accountability Office said.
The Postal Service, which is shuttering post offices and seeking to end Saturday delivery to reduce costs, forecasts a $20 billion loss by 2015 as Internet use drives down mail volumes. The service last month said it expected to reach its $15 billion debt limit by Sept. 30, the end of its fiscal year, and warned that it may not have the cash to carry the mail beyond next August.
A refund wouldn’t “be sufficient to repay all of USPS’s debt and address current and future operating deficits related to USPS’s inability to cut costs quickly enough to match declining mail volume and revenue,” the GAO, the investigative arm of Congress, said in a report it plans to issue today.
The Postal Service and its labor unions have said that getting back the $50 billion to $75 billion it has paid into the civil-service retirement system would reduce the need to eliminate as many as 220,000 jobs and close up to 15 percent of its post offices.
Giving the money to the Postal Service would increase the U.S. government’s pension liability by as much as $85 billion and would cause it to borrow or use tax revenue to make up the difference, the GAO said.
The Postal Service’s inspector general and regulator in 2010 issued reports that they commissioned from outside analysts concluding the agency had overpaid for its retirement fund. The Postal Service, which is designed to operate as a self- supporting entity, has been required since 1974 to split payments into the retirement fund with the federal government.
The GAO said in its report it didn’t find evidence of any errors leading to overpayments.
Senator Tom Carper, a Delaware Democrat, had asked the GAO to review whether an overpayment exists. Carper is the sponsor of a bill that would allow the Postal Service to use any money overpaid into the civil-service retirement system to pay, as required by law, for health benefits of future retirees.
--Editors: Andrea Snyder, Donna Alvarado
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