Neither Snow Nor Rain · Episode 7 of 10 · 22 min
The Manufactured Crisis and the Rescue
In December 2006, at the peak of American mail volume, Congress required the Postal Service to prefund seventy-five years of retiree health benefits, about $5.5 billion a year. Volume then collapsed, and by 2012 the agency was defaulting. Critics call it a manufactured crisis; defenders say the liabilities were real. The 2022 Postal Service Reform Act repealed the mandate and canceled about $57 billion in liabilities without fixing operating economics.
Who's who
- Jack PotterPostmaster General 2001-2010 who warned the payment schedule was unaffordable
- Patrick DonahoePostmaster General who announced then reversed an end to Saturday delivery
- Megan BrennanFirst woman Postmaster General, who sought reform throughout her tenure
- Louis DeJoy+2 more episodesPostmaster General from 2020 who supported the 2022 reform
- Susan CollinsSenate architect of the 2006 postal law
- Tom CarperSenate architect of the 2006 postal law
- Philip F. RubioHistorian whose book Undelivered popularized the manufactured-crisis argument
Timeline
- 2001First-Class Mail peaks at roughly 103.7 billion pieces
- December 20, 2006Bush signs the Postal Accountability and Enhancement Act
- 2012USPS defaults for the first time; fiscal-year loss reaches $15.9 billion
- February 2013Saturday letter delivery ended, then reversed in April
- April 6, 2022Biden signs the Postal Service Reform Act; prefunding repealed, about $57 billion canceled
- January 2025New postal retiree health program with Medicare integration goes live
Still debated
Whether the crisis was manufactured by the prefunding mandate or mostly caused by collapsing First-Class volume is still argued. So is whether the 2006 schedule was a budget gimmick or a good-faith miscalculation, and whether the 2022 rescue fixed anything or moved costs around.