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Federal Eye
Posted at 06:00 AM ET, 02/14/2012

Obama’s 2013 budget backs ending Saturday mail, boosting stamp prices


Postal clerk Elisha Toni joins postal workers in a national day of protest against postal reform plans, in Los Angeles, in September. (Lucy Nicholson - Reuters)
President Obama’s budget proposal backs allowing the U.S. Postal Service to end Saturday mail deliveries, raise the price of stamps above the rate of inflation and recalculate how it plans to pay for the future retirements of postal workers.

Eye Opener

The budget proposals mirror plans Obama presented to the fiscal supercommittee in September that the panel didn’t adopt.

Though the Postal Service is a self-funding entity that doesn’t use taxpayer dollars to fund its operations, it is a significant piece of the unified federal budget because its workers and retirees draw benefits from federal workers’ compensation, retirement and health-care accounts.

The Postal Service said last week that it lost $3.3 billion in the quarter that ended in December and could lose as much as $14 billion in the fiscal year that ends in September if it is forced to continue making annual payments to pre-fund future worker retirements.

In the budget document released Monday, the White House proposed relaxing those payments by allowing the Postal Service to include fewer employees in the payments and to make the payments over a longer period of time. Obama also backed an end to Saturday mail deliveries and proposed granting USPS the authority to raise the price of stamps beyond the rate of inflation, if necessary. Obama also would refund $10.9 billion to USPS over two years from a credit it has with the Federal Employee Retirement System.

If enacted, the White House proposals would help USPS save $25 billion over the next 11 years.

In a statement, Postmaster General Patrick R. Donahoe thanked the White House for supporting “helpful recommendations to stabilize the Postal Service’s financial crisis.”

“We look forward to working with the White House and Congress on specific proposals that involve the Postal Service,” Donahoe added.

But when those discussions will begin in earnest remains unclear.

Competing proposals in the House and Senate have sat dormant in recent weeks, despite warnings by USPS that it could begin to face serious fiscal shortfall as early as this spring.

Sen. Thomas R. Carper (D-Del.), who is leading the push to pass a bipartisan Senate proposal, said the White House plan included several proposals in his bill.

“We can’t let the Postal Service fail on our watch,” Carper said Monday. “Congress and the Administration are in agreement that key reforms and resources are necessary if we hope to help the Postal Service recover and thrive.”

Rep. Darrell Issa (R-Calif.), who is sponsoring a House GOP postal reform bill, said Obama’s proposal “lacks the necessary comprehensive approach to restore the Postal Service to solvency. While he understands that a shift to five-day delivery is necessary, infusing the agency with cash and hiking postage rates without requiring USPS to reduce costs and realign itself to meet America’s changing use of mail is just buying a very small amount of time with a very big check.”

Follow Ed O’Keefe on Twitter: @edatpost

Further reading:

Obama budget: National debt will be $1 trillion higher in a decade than forecast

House Republican leaders agree to payroll-tax holiday extension without offsets

For more, visit PostPolitics and The Fed Page.

By  |  06:00 AM ET, 02/14/2012

Categories:  Eye Opener, Postal Service, Budget

 
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