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USPS OIG: The absurdity of pre-funding and its role in USPS’ financial problems

USPS OIG: The absurdity of pre-funding and its role in USPS’ financial problems

The Postal Service is required to pay the full estimate of its liabilities even as that estimate moves around and is based on highly uncertain assumptions that can frequently change over the life of the liability.

An article posted on the website of the USPS Office of the Inspector General compares that to a credit card company telling you, “You will charge a million dollars on your credit card during your lifetime, so please enclose that million dollars in your next bill payment—because it’s the responsible thing to do.”

A new USPS OIG white paper, Considerations in Structuring Estimated Liabilities, evaluates these assumptions and other considerations and shows how close USPS could be to “fully funded”—or even potentially overfunded.

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