By Kellie Lunney
September 11, 2012
A top House Republican wants to include parts of his stalled postal reform legislation in the six-month continuing resolution to keep the government open after Sept. 30.
Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., is urging the White House to submit an interim reform package to Congress that temporarily defers the U.S. Postal Service’s multibillion-dollar obligation to prefund retiree health benefits, allows the agency to move to five-day mail delivery, and bans USPS from entering into no-layoff agreements with employees.
“These three provisions alone will not fully restore the Postal Service to solvency,” Issa wrote in a Sept. 7 letter to President Obama. “But together they comprise a meaningful step in that direction that encompasses wide areas of bipartisan agreement. They address the reality of a federal agency’s default, and they help move the overall goal of comprehensive postal reform forward.”
The “narrow time frame” Congress faces in September makes it unlikely both chambers can push through comprehensive postal reform, he said. “The post-election lame-duck session will provide a much greater window of opportunity to enact legislation to restore the Postal Service to solvency,” he wrote.
The Postal Service did not directly answer whether it supported Issa’s move, instead reiterating a need for comprehensive postal reform to fully implement its five-year business plan to reduce overall costs by $22 billion by 2016. “The Postal Service remains optimistic that such legislation can be enacted in the current Congress,” USPS spokesman Dave Partenheimer said.
USPS defaulted on its $5.5 billion prefunding payment on Aug. 1 and won’t be able to pay another $5.6 billion due on Sept. 30, absent legislative changes. Overall, the Postal Service lost $5.2 billion in the third quarter of fiscal 2012, $2.1 billion more than the same period of 2011.
The agency this summer has offered thousands of buyouts and early retirement packages to employees including postmasters, managers and administrative staff. Plans to reduce the number of retail hours of operation at some post offices also are under way.
The Senate in April passed its version of postal reform legislation, which is considerably different from the House bill. Senate lawmakers have criticized the House for stalling on its postal reform legislation; Issa’s committee approved that bill, but it hasn’t come to the floor yet for a vote.
“It appears that House leaders are continuing to scramble for excuses for why they can’t pass any type of postal reform legislation before the election,” Emily Spain, communications director for Sen. Tom Carper, D-Del., said in a statement, responding to Issa’s letter to the White House.
House and Senate lawmakers are at odds over various provisions, but in particular, they disagree over how the Postal Service should meet its obligation to prefund retirees’ health benefits and changes to the mail delivery schedule. The Obama administration supports reducing mail delivery from six days to five days beginning in 2013, as well as tweaking the provision in the 2006 postal reform law that requires SPS to prefund retirees’ health benefits, which costs the agency about $5.5 billion annually. That proposal would move the payments to an accruing cost basis and reduce the short-term postal payments, according to Obama’s fiscal 2013 budget recommendation. Issa’s bill, which the nonpartisan Congressional Budget Office estimated would save USPS about $20 billion during the next decade, also would restructure the agency’s annual retiree health care payments, allowing it to pay what it can now, increasing the amount it owes in health benefit prepayments in fiscal 2015 and fiscal 2016, and decreasing the payments thereafter.
In addition, the Senate reform bill would restructure the Postal Service’s prefunding requirement, reducing its total liability for funding by 80 percent. It also would allow the Postal Service to switch to five-day delivery after two years if officials cannot come up with other cost savings.
By Kellie Lunney
September 11, 2012