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.
Close [ x ] More from GovExec

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

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


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