Latest postal reform bill would lose money, CBO says

Elaine Thompson/AP

An estimate of the latest U.S. Postal Service reform bill to be introduced into the Senate finds that the plan would create a net government loss of $6.3 billion over 10 years.

The Congressional Budget Office released the assessment of the 21st Century Postal Service Act on Jan. 26, as ordered by the Senate Committee on Homeland Security and Governmental Affairs. CBO obtained the loss number by calculating that the bill would result in off-budget savings of $25.6 billion through 2022 and on-budget costs of $31.9 billion during the same time period.

Committee chairman Joseph Lieberman, I-Conn., introduced the legislation to the Senate on Nov. 2, 2011. The act, among other provisions, would transfer more than $11 billion from the Civil Service Retirement and Disability Fund to the Postal Service Fund to help process the large number of USPS employees set to retire in the next few years, a move that CBO warned “would lead the agency to alter its cost-reduction program by cutting spending less aggressively than it otherwise would and thus increase other expenses relative to current law.”

The legislation also would offer employees additional credit for retirement incentives based on years of service and allow USPS to reduce mail delivery to five days a week within two years of the bill’s enactment, pending an evaluation by the Government Accountability Office and approval by the Postal Regulatory Commission.

USPS objected to the bill’s current wording, arguing that it would provide the agency with only two to three years’ worth of funding for operations.

“The bill as currently drafted does not provide the Postal Service with the speed and flexibility it needs to achieve the $20 billion in cost reductions,” Postal Service spokesman David Partenheimer wrote to Government Executive, adding the agency itself seeks authority “to move to five day delivery in January 2013, make needed retail and mail processing network changes without unduly restrictive administrative burdens, and be allowed to operate its own health care plan.“

Partenheimer noted, however, that the Postal Service does support some of the provisions in the legislation, including a requirement that the Office of Personnel Management must return a Federal Employees Retirement System surplus to the agency every year one is calculated.

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