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Josh Barro

Understanding the Post Office's Benefits Mess

Yesterday, the United States Postal Service admitted that it will miss a legally required $5.5 billion payment toward pre-funding its promised health-care benefits for retirees. But is this even a cost the USPS should have to cover? The answer, unfortunately, is "sort of." Here's why -- and what we should do about it.

Imagine you have a company with only one employee, Steve. If Steve earns a salary of $50,000 and receives no benefits, you have to pay him cash in the current period and reflect the whole $50,000 as an expense.