Collins' letter indicated that after months of negotiation with the administration, she and other proponents of the legislation have not backed down from their stance that the Postal Service should be given access to money slated for a retirement escrow account the service claims is overfunded: a major sticking point between Congress and the White House.
Although a broad coalition of lawmakers and stakeholders agree the Postal Service should be able to tap the escrow account, the administration has said that would make the legislation too costly.
In the letter to Senate Budget Committee Chairman Jud Gregg, R-N.H., and ranking member Kent Conrad, D-N.D., Collins warned budgeters that keeping the account in place, "will directly impact the Postal Service's rate planning and will trigger annual rate increases, over and above any rate increases needed to fund postal operations." The letter was also signed by the bill's lead Democratic sponsor, Sen. Thomas Carper of Delaware.
Collins wrote that the agency will use the money from the escrow account to finance health insurance, pay any debt and hold down operating costs. The Postal Service has announced it will seek a double-digit rate hike to cover those expenses if the bill does not pass this year.
Collins contended in her letter that "fortunately" the new measure will have less of a budget impact than the bill that cleared her committee unanimously last year, because it requires the Postal Service to start setting aside money for retiree health benefits into a separate account next year, instead of 2007.
That provision, which will likely decrease the bill's first-year budget score by several billion dollars, was inserted to make the legislation more like a bill approved by the House Government Reform Committee last year, a Senate aide said.