Budget recommends greater flexibility for Postal Service

Flickr user cobalt220

President Obama’s fiscal 2013 budget proposal recommends giving the U.S. Postal Service greater flexibility to operate and save money, including restructuring the way the agency prefunds retirees’ health benefits.

The administration seeks to tweak a provision in the law that requires USPS to prefund retirees’ health benefits, which costs the agency billions annually. The proposal would move the payments to an accruing cost basis and reduce the near-year postal payments, according to the budget document. The Postal Service lost $5.1 billion in 2011, and would have lost $10.6 billion if Congress had not allowed the agency to defer its mandatory payment to prefund those health benefits for retirees. The payment has been deferred several times and is due in the summer.

The budget proposal also supports providing USPS with a refund over two years of the $10.9 billion in overpayments made to the Federal Employees Retirement System; reducing mail delivery from six days to five days beginning in 2013; allowing the Postal Service to collaborate more with state and local governments; and giving the agency the ability to better align postage costs with mail delivery costs while still operating within the current price cap.

The White House estimates the reforms would provide the Postal Service with more than $25 billion in cash relief over the next two years and save $25 billion over 11 years.

“The president has offered helpful recommendations to stabilize the Postal Service’s financial crisis,” said Postmaster General Patrick Donahoe in a statement.

The Senate Homeland Security and Governmental Affairs Committee in November 2011 approved a bill that included some similar provisions, including one that would restructure prefunded retirement health benefits. The legislation also would allow USPS to reduce mail delivery to five days and require the Office of Personnel Management to return a FERS surplus to the agency every year one is calculated. The nonpartisan Congressional Budget Office, however, estimated the bill would create a net government loss of $6.3 billion over 10 years. The Senate is expected to vote on the legislation in next few months.

The Postal Service expected a financial boost from the 2011 holiday season, but it didn’t materialize. The agency lost lost $3.3 billion in the first quarter of fiscal 2012.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download
  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care

    Download

When you download a report, your information may be shared with the underwriters of that document.