Fact-check: Peo­ria Repub­li­can’s claim about postal sur­plus be­longs in the Dead Let­ter Of­fice

Chicago Sun-Times - - TOP NEWS - BY KIANNAH SEPEDA-MILLER AND DEB­O­RAH WILBER

House Repub­li­cans joined Democrats last month in sup­port­ing leg­is­la­tion to send $25 bil­lion to the U.S. Postal Ser­vice and to block any changes to postal op­er­a­tions un­til af­ter the elec­tion.

The list in­cluded two of Illi­nois’ five GOP con­gress­men. U.S. Rep. Darin LaHood, how­ever, was not one of them. Asked dur­ing a TV ap­pear­ance to ex­plain why he voted against the mea­sure, LaHood ques­tioned the need for that fi­nan­cial sup­port.

“The post of­fice right now, this year, is op­er­at­ing with about a $12 bil­lion sur­plus,” he said on WTTW’s “Chicago Tonight” Aug. 24 broad­cast. “The money isn’t nec­es­sary to get us through the elec­tion. That’s been a po­lit­i­cal foot­ball.”

His as­ser­tions come as the Trump ad­min­is­tra­tion is tak­ing heat for re­mov­ing hun­dreds of sort­ing ma­chines and yank­ing mail­boxes in the walk-up to an elec­tion that will rely on the postal ser­vice more than any other elec­tion in the coun­try’s his­tory.

The postal ser­vice says it has “am­ple ca­pac­ity” to han­dle an in­flux of mail-in bal­lots this fall. But the agency’s shaky fi­nan­cial foot­ing is a well-known and long-stand­ing prob­lem: It hasn’t recorded a profit in any year since 2006 and saw a net loss of $2.2 bil­lion in the most re­cent fis­cal quar­ter. So, we de­cided to find out what LaHood was talk­ing about when he said the agency was run­ning a sur­plus.

“He was re­fer­ring to the fact that the USPS had al­most $13 bil­lion cash on hand, as of June 30th,” LaHood spokesman John Rauber wrote in an email, echo­ing a point made in the White House’s state­ment of ad­min­is­tra­tion pol­icy op­pos­ing the bill. That fig­ure is backed up by the postal ser­vice’s lat­est quar­terly re­port.

Cash on hand — or un­re­stricted cash, as the agency calls it — is not a sur­plus by any def­i­ni­tion, ac­cord­ing to ex­perts. In­stead, it refers to the amount of money the agency has in the bank at a given time. The postal ser­vice re­ports its net in­come — also known as a profit — or net loss at the end of each fis­cal pe­riod, in ac­cor­dance with ac­cepted ac­count­ing stan­dards.

Re­fer­ring to cash on hand as a sur­plus “doesn’t make sense,” said David Wes­sel, di­rec­tor of the Hutchins Cen­ter on Fis­cal and Mon­e­tary Pol­icy at the Brook­ings In­sti­tu­tion.

“The word ‘sur­plus’ sug­gests that the Postal Ser­vice’s rev­enues ex­ceed its ex­penses,” he said. “They don’t. The Postal Ser­vice has been op­er­at­ing at a loss — cer­ti­fied by independen­t ac­coun­tants and re­ported to the Se­cu­ri­ties and Ex­change Com­mis­sion — since 2007.”

In the last fis­cal year, the agency brought in just over $71 bil­lion in rev­enue. But it also shelled out nearly $80 bil­lion to pay its car­ri­ers and cover ex­penses, in­clud­ing re­tiree ben­e­fits. A 2006 law made the agency re­spon­si­ble for pre­fund­ing fu­ture re­tiree health ben­e­fits, plac­ing ad­di­tional strain on its bot­tom line, which has also suf­fered over the years from de­clines in first-class and mar­ket­ing mail. The postal ser­vice has run at a loss ever since.

“It’s not even break­ing even on its an­nual ex­penses and its an­nual in­come,” said G. Wil­liam Hoagland, a se­nior vice pres­i­dent at the Bi­par­ti­san Pol­icy Cen­ter and for­mer Repub­li­can staff di­rec­tor for the Se­nate Bud­get Com­mit­tee. “I don’t know how any­body could say they have a sur­plus.”

Our rul­ing

LaHood said, “the post of­fice right now, this year, is op­er­at­ing with about a $12 bil­lion sur­plus.”

His spokesman told us he was ref­er­enc­ing the nearly $13 bil­lion “cash on hand” the agency re­ported at the end of June.

But cash on hand is not a sur­plus, ex­perts said. The agency has re­ported a net loss in every year since 2007, the year af­ter Congress re­quired it to more ro­bustly fund its re­tire­ment health ben­e­fit sys­tem.

We rate LaHood’s claim Pants on Fire!

The Bet­ter Govern­ment As­so­ci­a­tion runs Poli­tiFact Illi­nois, the lo­cal arm of the na­tion­ally renowned, Pulitzer Prize-winning fact-check­ing enterprise that rates the truth­ful­ness of state­ments made by gov­ern­men­tal lead­ers and politi­cians. BGA’s fact-check­ing ser­vice has teamed up weekly with the Sun-Times, in print and on­line. You can find all of the Poli­tiFact Illi­nois sto­ries we’ve re­ported to­gether at https://chicago.sun­times.com/sec­tion/poli­tifact/.

A 32-year-old woman was stabbed to death Sun­day at her job at Wal­greens in Wicker Park on the North Side.

About 9:35 a.m., she was work­ing at the store in the 1300 block of North Mil­wau­kee Av­enue when she was ap­proached by some­one who stabbed her mul­ti­ple times be­fore flee­ing, Chicago po­lice said. She was pro­nounced dead at the scene.

No money or items were stolen, po­lice said. The store re­mained closed Sun­day after­noon. As news crews milled around, cus­tomers hop­ing to pick up pre­scrip­tions and other med­i­ca­tions were met by a pair of shut­tered metal gates block­ing the en­trance.

Mig­dalia San­ti­ago, a 63-year-old woman who lives in the area, said she was “shocked” to hear about the killing from a lo­cal busi­ness­man.

“Th­ese are awe­some peo­ple, very nice peo­ple, in this Wal­greens,” San­ti­ago said.

JUSTIN L. FOWLER/ THE STATE JOURNAL-REG­IS­TER VIA AP

U.S. Rep. Darin LaHood, R-Ill., gets a stand­ing ova­tion as he takes the podium dur­ing Repub­li­can Day at the Illi­nois State Fair in Spring­field last year.

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