House Oversight Chair Makes Another Attempt at Postal Overhaul

By Eric Katz

June 13, 2013

A champion of failed House legislation to overhaul the U.S. Postal Service has released draft language for a new proposal, which moves forward with five-day delivery and eases the much-maligned requirement to prefund retirees’ health benefits.

House Oversight and Government Reform Committee Chairman Rep. Darrell Issa, R-Calif., has once again started the process of reaching bipartisan agreement on how to bring the cash-strapped agency back onto a sustainable path, issuing his proposal to “solicit broad stakeholder input” on reform legislation. Issa offered a reform bill last Congress, which cleared the oversight committee but was never brought up for a vote on the full House floor.

New proposals in Issa’s current bill -- the Postal Reform Act of 2013 -- include switching to actuarial calculations for future retirees’ health benefits. That plan is designed to reach full funding in 2056. Currently, USPS makes pre-fixed annual payments into an account for future benefits. The Postal Service has defaulted on its payments the last two years, however, and has said it does not expect to make its next payment due in September.

Prefunding has been a sticking point for Democrats and postal stakeholders, who claim the payments place an unfair burden on the agency not seen elsewhere in government. The switch to actuarial payments -- which President Obama called for in his 2014 budget proposal -- would save between $2 billion and $3 billion annually, according to the Government Accountability Office.

Another major change from Issa’s previous proposal is the elimination of a commission to determine mail processing consolidations, modeled after the Defense Department’s Base Closure and Realignment Commission. The oversight chairman highlighted progress USPS has made over the last two years in reducing its infrastructure costs in explaining the decision.

Issa’s proposal would grant the Postal Service reduction in force authority. Currently, labor agreements prevent USPS from using layoffs.

The oversight chairman also called for increased use of secure “clusterbox” mail delivery, while phasing out to-the-door delivery. Issa said the shift would eventually save $4 billion annually.  His bill also would end Saturday mail delivery, which the Postal Service announced it would do in 2013 before a rider in the most recent continuing resolution forced the agency to backtrack.

USPS officials -- who have pleaded with Congress to allow the agency to move forward with its revised five-day schedule -- have said the proposal would save $2 billion annually.

The legislation would temporarily strip the Postal Service’s Board of Governors of its power, replacing it with a “temporary panel” of five full-time executives that “have a clear mandate to turn around the agency and implement cost-cutting reforms,” Issa said in fact sheet that accompanied the draft language. The Board of Governors would be reinstated once USPS is returned to solvency.

Issa’s bill would charge the Postal Regulatory Committee with identifying and correcting all instances in which certain customers receive “special rates,” leading to the customer paying less than the cost of delivery. It would also do away with political parties’ ability to use the non-profit mail rate.

The draft language enables the Postal Service to develop new sources of revenue, such as advertising on mail trucks and offering local services like the sale of fishing licenses. The bill would not allow for the return of any pension surplus for operating costs, a strategy called for by Democratic lawmakers, USPS officials and postal unions. It would, however, permit an annual transfer of pension surplus funds to retirees’ health care liabilities.

Government Executive previously reported several different groups in Congress were working on their own plans to overhaul the Postal Service. Senate Homeland Security and Governmental Affairs Chairman Tom Carper, D-Del., confirmed Thursday he plans to release a bill in the coming weeks.

“I appreciate Chairman Issa’s efforts to move forward with a proposal to address this imminent threat to the Postal Service,” Carper said in a statement. “While we differ in our approach in some areas, Chairman Issa and I, and the rest of our colleagues, are united in our effort to restore the Postal Service to solvency and give it the tools it needs to thrive in the years to come.”

Carper also proposed a bill last Congress, which cleared the Senate but was never taken up in the House. In January, lawmakers said they were extremely close to striking a deal in the “wee hours” of the last legislative session, but ultimately fell short.

Nevertheless, Issa expressed optimism about the possibility of deal this time around.

“Chairman Issa believes that bipartisan and bicameral talks that began last Congress and continue this Congress have been productive,” spokesman Ali Ahmad said, “and that moving the discussion towards specific legislative language will only enhance the productivity of the ongoing process.”


By Eric Katz

June 13, 2013

http://www.govexec.com/oversight/2013/06/house-oversight-chair-makes-another-attempt-postal-overhaul/64862/