December 12, 2011The U.S. Postal Service hopes to receive another deferral this week from Congress on a multibillion-dollar payment to prefund retirees' health benefits.
Congress expects to pass a measure soon to keep the government operating past Dec. 16, when the current stopgap funding bill expires. USPS, which lost $5.1 billion in fiscal 2011, received a second reprieve from Congress in November on a $5.5 billion payment to prefund retirees' health benefits.
That deferral was part of a bill President Obama signed into law funding several departments and some smaller agencies for the remainder of fiscal 2012, and keeping others open through Dec. 16. The Postal Service's payment originally was due at the end of September and initially deferred in the continuing resolution to keep the government open through Nov. 18.
The prefunding requirement is part of a congressional mandate. Spokesman Dave Partenheimer said the Postal Service still does not have the money to finance the prefunding payment. While USPS is hoping for another reprieve, it would like a permanent fix to help dig the agency out of the red.
"Delaying the payment is only kicking the can down the road," Partenheimer said in an email. "We need the issue of us having to prefund retiree health benefits resolved." USPS would have lost $10.6 billion this year if Congress had not allowed the agency to defer its mandatory payment to prefund postal retirees' health benefits.
It is unclear whether Congress will grant the Postal Service another grace period on the payment as part of the measure keeping the government running.
The Senate Homeland Security and Governmental Affairs Committee last month approved postal reform legislation that included language to restructure prefunded retirement health benefits, reducing the payment goal to 80 percent, and to require USPS to negotiate with its unions to develop a new employee health care plan.
USPS has several financial obligations to fulfill. The agency resumed payments in December to its Federal Employees Retirement System account after suspending them this summer. In November, Chief Financial Officer Joe Corbett said the agency has "sufficient cash on hand" to resume contributions in early December and pay out the amount that was withheld, which is around $1 billion. Corbett said November and December are strongest months financially for the agency because of the holidays.
December 12, 2011