Senators plead for grace period on shuttering post offices

By Kellie Lunney

May 1, 2012

A bipartisan group of senators is asking the head of the U.S. Postal Service to delay the closures of post offices and mail processing facilities scheduled to begin May 15 until after Congress passes legislation reforming the agency.

The Senate last week passed its reform legislation but the House has not voted yet on its version. Senate lawmakers are worried the moratorium on post office closures will expire before the two chambers reconcile their bills. USPS this month plans to start closing post offices and processing facilities nationwide as part of a large-scale effort to eliminate debt and regain its financial footing. The agency is trying to slash more than $22 billion in expenses by 2016.

“We believe an attempt to proceed with the planned closures -- to ‘get in under the wire’ while legislation is being considered -- would be counterproductive and would violate the clear intent of the Senate,” the letter stated. The architects of the Senate’s postal reform legislation -- Sens. Joe Lieberman, I-Conn.; Susan Collins, R-Maine; Tom Carper, D-Del.; and Scott Brown, R-Mass. -- sent the April 30 letter to Postmaster General Patrick Donahoe.

USPS did not respond to a request for comment in time for publication. Last week, Donahoe largely approved of the Senate legislation, but said it didn’t go far enough. “We believe that there are important and valuable provisions contained in the legislation,” he said. “We would have preferred the Senate allow the Postal Service to move further and faster in addressing its cost reduction goals.” On C-SPAN’s Newsmakers Sunday, Donahoe said he would like to see Congress act by the end of May.

While both the Senate and House bills give the Postal Service more flexibility to contain its costs, there are some major differences between the two versions. Among other provisions, the legislation the Senate passed in a 62-37 vote would restructure the payment schedule related to the agency’s obligation to prefund retirement health benefits, require USPS to negotiate with its unions to develop a new employee health care plan outside the Federal Employees Health Benefits Program, and transfer more than $11 billion from the Civil Service Retirement and Disability Fund to the Postal Service to help process the large number of USPS employees scheduled to retire in the next few years. In addition, the Senate bill would require the agency to maintain six-day delivery for the next two years and expands the alternatives USPS must consider before closing a post office.

The House version would allow USPS to make a partial retiree health care funding payment in 2012 -- roughly $1 billion -- and pay the balance in equal installments in fiscal 2015 and 2016; it also would refund about $13 billion in overpayments the agency made to the two federal retirement systems. The House bill would require postal workers to pay at least as much as other federal employees in health and life insurance premiums and keep pay in line with the private sector's as well as ensure postal employees are subject to the same reduction-in-force authority as the rest of the federal workforce. In addition, the House bill, shepherded by Reps. Darrell Issa, R-Calif., and Dennis Ross, R-Fla., would establish a task force similar to the Defense Department’s Base Closure and Realignment Commission to study and make recommendations on post office consolidations and closures and establish a receivership-style authority to take over the agency if it fails to pay its bills after 30 days. Language in the House legislation does not include the two-year waiting period on six-day delivery.

USPS, which lost $5 billion in fiscal 2011, has eagerly anticipated what Capitol Hill will provide in the way of a legislative fix to stem financial ruin. From offering thousands of buyouts to employees to closing post offices nationwide, the agency has tried to get a handle on its finances, which have spiraled out of control during the past decade. The agency would have lost nearly $11 billion in 2011 if Congress had not postponed a statutory requirement to prefund retiree health benefits. Pay and benefit costs account for the lion's share of USPS' expenses.

The biggest fight between the two chambers is likely to be over how much flexibility USPS should have in closing and consolidating postal facilities and when the agency should switch to five-day delivery.

Issa, chairman of the House Oversight and Government Reform Committee, last week criticized the Senate’s postal reform legislation. "Instead of finding savings to help the Postal Service survive, the Senate postal bill has devolved into a special-interest spending binge that would actually make things worse,” he said.

USA Today published a May 1 editorial ripping the Senate’s bill, criticizing lawmakers for dodging difficult political decisions. “There's nothing pleasant about cutting jobs and closing post offices and mail processing centers,” the editorial board stated. “But the alternative is forcing taxpayers to subsidize a bloated system that operates at a loss. Unless Congress is willing to make tough choices, the Postal Service’s woes could make the bailouts of General Motors and Chrysler look like chump change.” The board called the House bill “closer to what’s needed.”

In an opposing view also published in Tuesday’s USA Today, Lieberman, Collins, Carper and Brown defended their bill. “By a strong bipartisan vote, the Senate passed a bill last week that gives USPS the authority it needs to right-size, modernize and remain competitive,” the senators wrote. “It isn't a perfect bill, but it would put USPS on a path toward financial stability.”


By Kellie Lunney

May 1, 2012

http://www.govexec.com/pay-benefits/2012/05/senators-plead-grace-period-shuttering-post-offices/55515/