OPM backs postal payment of workers' military retirement benefits

A Bush administration official Tuesday challenged some of the changes called for by the President's Commission on the Postal Service, while postal union representatives questioned the need for any large-scale change.

Testifying before the Senate Governmental Affairs Committee, Office of Personnel Management Deputy Director Dan Blair said he disagrees with the commission's recommendation that the responsibility for funding Civil Service Retirement benefits for military service, which were shifted to the postal service last year, be returned to the Treasury Department.

Blair said directly funding military retirement benefits for postal workers offers the Postal Service the "direct benefit" of attracting and retaining veterans.

Governmental Affairs Chairwoman Susan Collins, R-Maine, said she is "not inclined to agree with the administration" on permanently establishing the military retirement benefits, estimated at $27 billion, as a Postal Service responsibility.

"Whoever bears that cost is going to be presented with a pretty hefty bill," Collins said.

In an interview Monday, Collins said she is "very reluctant" to consider a reform bill that fails to transfer the military retirement funding responsibility back to Treasury.

Blair said the administration supports many of the commission's recommendations, particularly the proposal to shift postal employees to a pay-for-performance system.

Postal union representatives rejected most of the commission's recommendations altogether.

National Association of Letter Carriers President Bill Young focused on the commission's proposed changes to the collective bargaining process, including strict timetables and a mandatory mediation-arbitration process.

"The system we have now is not perfect -- indeed, no system is perfect. But the parties have learned how to work together within the current framework, and the process has worked well for all concerned," Young said.

He added that any legitimate changes to the collective bargaining process must originate from postal labor or management, not from Congress or the White House.

National Rural Letter Carriers' Association president Dale Holton said the commission's recommendation that postal retirement and health benefits could be subject to collective bargaining is overly ambitious, and that the postal service is unprepared to manage those benefits, which currently are included in federal benefits programs.

The union representatives did agree with the plan to transfer military retirement funding back to Treasury.

Meanwhile, a new lobby group of 150 businesses and organizations sent letters Tuesday urging members of Congress to support extensive postal overhaul efforts. The Coalition for a 21st Century Postal Service includes some of the postal service's largest customers.