The Postal Service and its RHBF

donquixote99 · #1 03-14-2021, 06:29 PM

The RHBF is a fund that Congress created for the Postal Service to pay into, to make sure that money would be available in the future to pay health benefits for postal retirees. Hence the name Retirement Health Benefits Fund. The Postal Service is supposed to pay a lot of money into this fund, something over 6 billion a year nowadays. It hasn't met its target for contributions it all years, but altogether there's now about 47 billion dollars in this fund.

A basic question, if you think to ask, is who's got the 47 billion? The answer, really, is nobody. That's because the fund is set up for all the money to go into government bonds. The Treasury gets the money from the Postal Service, and they make bond accounts that say they owe the money to the Postal Service. As for the money itself, it goes into the Treasury's general fund and gets spent.

The supposed reason for creating the RHBF was that if the pay as you go cost of retiree health benefits for postal employees got too large for the Postal Service to pay, then Congress might be on the hook for it. But the situation with the fund is that in the future, when the Postal Service wants to spend the fund on benefits, Congress is on the hook for it, because Congress has to fund the repayment of those bonds. The money will come from taxes in the future or from borrowing in the future by the federal government. Just the same as if the federal government was 'bailing out the post office.'

So really, the only difference between having an RHBF and not having one is that for the time being, it makes the Postal Service Income Statement look bad, while the Treasury looks a little better. Basically, the Postal Service is funding the Treasury to the tune of $6.5 billion or so a year. Of course someday, presumably, the Treasury will fund the Postal Service, and the Postal Service will be better off. That's if Congress doesn't kill the Postal Service in the meantime because it 'loses money.' Money the government took from it, and spent!

finnbow · #2 03-17-2021, 04:37 PM

Quote:

Originally Posted by donquixote99

The RHBF is a fund that Congress created for the Postal Service to pay into, to make sure that money would be available in the future to pay health benefits for postal retirees. Hence the name Retirement Health Benefits Fund. The Postal Service is supposed to pay a lot of money into this fund, something over 6 billion a year nowadays. It hasn't met its target for contributions it all years, but altogether there's now about 47 billion dollars in this fund...

I don't believe any other entity in the entire country has been compelled to fund future pensions as generously as the USPS has been compelled to do, effectively funding in advance 75 years of future pension benefits.

https://ips-dc.org/how-congress-manu...how-to-fix-it/

Oerets · #3 03-17-2021, 05:05 PM

Smoke screen, diversion tactics in reality.

All to privatize the post office in the end.

Bankrupt or make to expensive is at the root......

Yet they (post office) are in the constitution..... Article I, Section 8, Clause 7 of the United States Constitution,

donquixote99 · #4 03-17-2021, 05:51 PM

If the Post Office put it's RHBF funds in corporate stocks, they would own assets, shares of actual companies. If they put them in corporate bonds, they would be investing in a regulated market and have rights in event of bankruptcy. Any security-type investment can be diversified, and is subject to laws that at least sometimes act to force behavior and disclosures that protect the investor.

None of this is true of investment in Treasury bonds, which is what the law requires of the RHBF. They are backed only by the 'full faith and credit of the Congress of the United States.' (See what I did there?)