No state is more dependent on the U.S. Postal Service than Alaska. Sen. Ted Stevens understood that and was a big supporter. Think bypass mail. Soon, our congressional delegation will have the opportunity to continue the late Sen. Stevens’ legacy — or not.
Like many businesses today in this COVID-19 environment, the Postal Service is facing financial challenges and could use some help as its difficulties partly stem from having to compete with one hand tied behind its back.
In 2006, Congress passed the misnamed Postal Accountability and Enhancement Act, which required the Postal Service to put away enough money to pay for its pension costs in advance for the next 75 years. This money had to be invested only in government bonds. Think of where the Alaska Permanent Fund would be today if it were required to invest only in government bonds.
This legislation meant that the Postal Service will have to fund pension costs for some of its workers who have not even been born yet. No other private business — like UPS — or public corporation — like the Alaska Railroad — has to do that. This requirement costs the Postal Service some $5.6 billion per year, an extra expense that its competitors do not face.
There is no good financial reason that the Postal Service was hamstrung with this onerous requirement and, indeed, some say that the intent was to eventually bankrupt it so that powerful connected people could claim that it should be privatized.
If the Postal Service is privatized, does anyone really think that service to all of Alaska — not just Anchorage — will remain as it is now? Our congressional delegation could take the lead in fixing the PAEA. Will they?
— John Jensen
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