What's Behind the Sale of the Downtown Berkeley Main Post Office? (News Analysis)
The Berkeley downtown post office, formally the "Downtown Berkeley Main" station, is set to close and be sold off. There is concern about town regarding the fate of a historic public building occupying incredibly valuable municipal real estate. There is more to the story, though. Congress, it turns out, is waging war against the postal service, or so it seems:
Tomorrow, August 1st, the post office is required to make a $5.5 billion payment to a fund for retiree health benefits. In September, another $5.6 billion is due. The postal service has announced that it will not make these payments. (source: Business Insider (July 31, 2012): Post Office Nears Historic Default on $5 Billion Payment)
It's odd that the Postal service owes $11.1 billion to the health care fund and here is why:
According to the Postal Service Inspector General, the postal service has overfunded its pension fund (not the retiree health care fund). Pensions are funded at 105%. (source: Office of the Postal Service Inspector General (June 18, 2012): Pension and Retiree Health Care Funding Levels: Management Advisory Report)
Did you catch that? Pensions are over-funded by $13.1 billion. Retiree health care is under-funded by $11.1 billion.
Why not, then, simply move $12.1 billion from one fund to the other? Problem solved, right? And with each fund winding up with an extra $1 billlion.
Why not? Because Congress won't let them. The Inspector General writes (emphasis added):
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