USPS Should Keep Funding Future Health Care Costs, Republicans Say

Danny Kim clears snow and ice as he climbs on the hood of his mail delivery truck in January. Danny Kim clears snow and ice as he climbs on the hood of his mail delivery truck in January. Charles Dharapak/AP

Republican lawmakers voiced support for continued prefunding of U.S. Postal Service retirees’ health benefits at a congressional hearing Thursday, calling the payments necessary to avoid workers losing promised benefits or the costs being deferred to taxpayers.

A USPS official told the House Federal Workforce, U.S. Postal Service and Census Subcommittee that the agency’s total obligations -- including retirees’ health benefits and pensions, workers’ compensation, debt owed to the Treasury Department, benefits for current workers and other liabilities -- exceed its assets by $90 billion.

Current law requires the Postal Service to prefund health care costs for all retired employees and some of its current workforce. The payments were front loaded by Congress in 2006, and have placed a huge burden on the cash-strapped agency. USPS has defaulted on billions of dollars in payments over the last few years.

Frank Todisco, chief actuary at the Government Accountability Office, told the panel the Office of Personnel Management does not know how it would legally handle the hypothetical situation in which USPS could no longer afford payments to its retirees. In that scenario, retirees could possibly lose benefits, or “taxpayers could be brought in,” Todisco said.

The Postal Service’s Chief Human Resources Officer Jeffrey Williamson said by requiring eligible USPS retirees to enroll in Medicare, the agency would virtually eliminate its unfunded liability. A Senate oversight committee has cleared legislation that would do exactly that, and amortize outstanding obligations over 40 years.

Rep. Blake Farenthold, R-Texas, chairman of the House subcommittee, had two officials from the Defense Department testify on its unfunded liability and discuss its own prefunding requirement. Farenthold said postal advocates have maintained the Postal Service is the only federal agency required to prefund retirees’ health, and by showing the Pentagon also faces the obligation, they can “scratch that talking point off.”

The subcommittee’s Ranking Member Stephen Lynch, D-Mass., countered that juxtaposing Defense to USPS was like “comparing apples and oranges,” as the Pentagon receives annual appropriations from Congress to meet its prefunding requirement, whereas the Postal Service is almost entirely a fee-funded agency.

Democrats also argued USPS’ overpayment into the Federal Employees Retirement System -- which OPM has said is about $5 billion but the Postal Service’s inspector general has said is more than $12 billion -- should be returned to the agency and used to pay down its debts. The Senate bill included such a provision.

They also argued USPS’ debt should not trigger any reactionary measures to dismantle the agency.

“No one is talking about dismantling the federal government when it is $17 trillion in debt,” said Rep. Lacy Clay, D-Mo. 

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    Download
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    Download

When you download a report, your information may be shared with the underwriters of that document.