In 2005, she sponsored and introduced legislation, the Postal Accountability and Enhancement Act (PAEA), that required the USPS to pre-pay the next 50 years worth of health and retirement benefits for all of its employees—a rule that no other federal agency must follow. As chair of the Senate oversight panel at the time, she shepherded the bill’s passage, along with her House GOP counterpart Tom Davis, during a lame-duck session of Congress. It passed by a voice vote without any objections—a maneuver that gave members little time to consider what they were doing.
To meet the mandate for prefunding USPS’s health and retirement benefits, the measure required the Postal Service to place roughly $5.5 billion into a pension fund every year between 2007 and 2016, followed by sizable additional payments, making it impossible for the institution to run a profit. To make it even harder for the USPS to make money, the law prohibited the agency from any new activities outside of delivering mail. In an essay for the Washington Monthly last year, New Jersey Congressman Bill Pascrell, who voted for the bill, called it “one of the worst pieces of legislation Congress has passed in a generation.”
That’s because it saddled the institution with debt that no other government agency—or private company—is responsible for. At the same time, it effectively blocked the USPS from taking advantage of new opportunities to provide services and garner revenue when it needed to make up for losses stemming from declines in first-class mail due to the rise of the Internet and email.
Now, the post currently has $160.9 billion in debt, of which $119.3 billion is the result of pre-funding retiree benefits. That was by design. As Pascrell wrote, “To argue that the Postal Service needs to be privatized, conservatives need to show that it is dysfunctional, and there’s no better way to do that than by weighing the agency down with impossible financial obligations.”
Collins’s role in passing that law has not gone unnoticed in Maine. “She weakened the Postal Service to the point where people like our president can say, ‘There’s a crisis here,’” John Curtis of the Maine State Association of Letter Carriers told the Maine Beacon. Maine Democratic Congresswoman Chellie Pingree last week called the prefunding mandate in Collins’s 2006 law “the number one cause of USPS’s financial enduring problems.”