August 13, 2009

THE RIGHT ANALOGY

Obama Suggests The Postal Service’s Present May
Be Government-Run Health Care’s Future
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President Obama: "[I] think private insurers should be able to compete. They do it all the time. I
mean, if you think about it, UPS and FedEx are doing just fine, right? No, they are. It's the post
office that's always having problems." (President Barack Obama, Remarks At Health Care Town Hall, Portsmouth, NH,
8/11/09)

POSTAL SERVICE’S PRESENT…

Hemorrhaging Money, Fiscally Insolvent
“GAO Is Adding The U.S. Postal Service’s (USPS) Financial Condition To The List Of High-Risk Areas
Needing Attention By Congress And The Executive Branch To Achieve Broad-Based Transformation.”
(“Restructuring The U.S. Postal Service To Achieve Sustainable Financial Viability,” U.S. Government Accountability Office, 7/09)

USPS Had “Loss Of $2.8 Billion For Fiscal Year 2008. Its Debt Increased By $3 Billion By The End Of The
Year To $7.2 Billion.” (“Deteriorating Postal Finances Require Aggressive Actions to Reduce Costs,” U.S. Government
Accountability Office, 1/09)

USPS Lost $2 Billion In Just Second Quarter Of 2009 And Is Projected To Lose $6 Billion This Fiscal Year.
“Legislation the House Oversight and Government Reform Committee advanced on Friday would allow USPS to
pay for the health benefits of current retirees out of its Retiree Health Benefit Fund instead of its operating budget.
That would save about $2 billion a year, during the three years the bill covers. That sounds good until you realize
the Postal Service — which is funded by customers, not tax dollars — lost that amount in just the second quarter
this year and expects to lose $6 billion this fiscal year.” (Marcia Davis, “Postal Service Gets a Little Help on the Hill,” The
Washington Post’s Federal Diary Blog, 7/13/09)

Postal Service Investigation Found Over $1 Billion In “Inefficiently Used Funds,” $248 Million In
“Questioned Costs,” In Just Six Months. “In a recent Semiannual Report to Congress, which covered the six-
month period between April and September 2007, USPS Inspector General David C. Williams identified over
$1.35 billion worth of inefficiently used funds and over $248 million in questioned costs. The report also made 86
recommendations that could save the Postal Service $1.6 billion if enacted.” (Robert R. Schrum, “Postal Inspector General
Delivers Valuable Results,” The Lexington Institute, 1/24/08)

Waste, Bureaucracy Lead To Poor Service & Service Cuts

Citing “Severe Financial Crisis” At USPS, Postmaster General Suggested Reducing Delivery To 5 Days A
Week. “Saying the U.S. Postal Service ‘is in a severe financial crisis,’ Postmaster General John E. Potter is asking
Congress to allow him to cut mail delivery from six days to five days a week. … ‘The ability to suspend delivery
on the lightest delivery days, for example, could save dollars in both our delivery and our processing and

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distribution networks,’ he said. ‘I do not make this request lightly, but I am forced to consider every option given
the severity of our challenge.’” (Eric Pianin, “Postmaster Proposes a Cutback in Mail Delivery,” The Washington Post’s Federal
Diary Blog, 1/28/09)

Consumers Complain Postal Workers “Could Care Less” Whether Their Services Are Successful.
“Consumers have a lot of problems with USPS, as the complaints in this section attest. What's perhaps most
unfortunate about this is the hostility displayed by too many postal employees who could care less whether their
efforts to serve taxpayers are successful.” (“US Postal Service,” ConsumerAffairs.com, Accessed: 8/12/09)
Success Of UPS And FedEx Shows Public Willing To Pay “10 Or 20 Times More” To Avoid Postal Service
Frustrations. “Of course, where competition with the Postal Service is allowed, as in overnight delivery, the
private sector prospers and the USPS simply is not a significant supplier. Also of interest is the fact that federal law
mandates that private-sector prices for the service must be at least $3 or twice the cost of the first-class mail
equivalent. Yet customers pay the price, indicating a preference for the private-sector guarantee of delivery over
the government's less-reliable monopoly, even if it costs 10 or 20 times more than a stamp.” (Dr. Edward L. Hudgins,
Director of Regulatory Studies, The Cato Institute, Testimony Before Appropriations Subcommittee on Treasury, Postal Service, and
General Government, U.S. House of Representatives, 4/30/96)

… IS GOVERNMENT-RUN HEALTH CARE’S FUTURE

Explosive Costs
$1.6 Trillion Government-Run Health Care Experiment Would Create $239 Billion Deficit. "Democrats
argue the number should be $1 trillion, a number provided by the Congressional Budget Office for the net cost of
the portion of the bill affecting health insurance, and they boasted in press releases that the bill actually creates a
$6 billion surplus over the coming decade. But the gross cost of the bill is much higher, more than $1.6 trillion,
according to a Roll Call analysis of the CBO data. And despite more than $800 billion in tax and fee hikes, it
actually adds $239 billion to the deficit ..." (Steven Dennis, "Analysis: House Health Care Bill's Price Tag Tops $1.6 Trillion,"
Roll Call, 7/20/09)

And CBO Director Warns Plans For Government-Run Health Care Would “Worsen The Long-Run Budget
Outlook.” "President Obama's plan to expand health coverage to the uninsured is likely to dig the nation deeper
into debt ... 'Without meaningful reforms, the substantial costs of many current proposals . . . would be much more
likely to worsen the long-run budget outlook than to improve it,' he said. ..." (Lori Montgomery, Shailagh Murray & Ceci
Connolly, "Obama's Health Plan Needs Spending Controls, CBO Says," The Washington Post, 6/17/09)

Bureaucracy And Reduced Services

Creating So-Called “Public Plan” Will Mean Billions In Administrative Costs. “[O]n a per-person basis
Medicare's administrative costs are actually higher than those of private insurance--this despite the fact that private
insurance companies do incur several categories of costs that do not apply to Medicare. If recent cost history is any
guide, switching the more than 200 million Americans with private insurance to a public plan will not save money
but will actually increase health care administrative costs by several billion dollars.” (Robert Book, “Medicare
Administrative Costs Are Higher, Not Lower, Than for Private Insurance,” The Heritage Foundation WebMemo #2505, 6/25/09)

Hospitals Say Government-Run Health Care Will Force Them To Drop Patients. '[L]awmakers are on track
to approve across-the-board federal payment reductions of $155 billion over 10 years for hospitals ... Mayo and
similar health systems object to the sweeping cuts. 'Across-the-board cuts will be harmful to everyone and we
think it is particularly bad to penalize the high-value organizations,' said Jeff Korsmo, executive director of the
Mayo Clinic Health Policy Center. 'We will have to violate our values in order to stay in business and reduce our
access to government patients.'" (Phil Galewitz, "'Model' Health Systems Press Case For Medicare Fix In Reform," Kaiser Health
News, 7/20/09)

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