The White House is planning to present a financial rescue plan for the U.S. Postal Service in the coming weeks as part of a broader, $1.5 trillion deficit reduction package, it said Tuesday.
In advance of those recommendations, the Obama administration is asking Congress to give the Postal Service a 90-day extension to pay mandatory annual retirement payments totaling about $5.5 billion.
The delay should allow lawmakers, the Postal Service and the White House enough time “to carefully work through the details of a proposal,” Office of Personnel Management Director John Berry told senators Tuesday.
The Postal Service is a self-funding entity drawing revenues from the sale of stamps and shipments, but its workers draw benefits from the federal government’s health-care, retirement and workers’ compensation funds – payments totaling billions of dollars annually that USPS says are destroying its finances.
Berry, who oversees the federal government’s retirement and health-care funds, said Congress should carefully study the Postal Service's proposal to withdraw from the health-care and retirement funds to save money.
Though the administration still has no formal position on the issue, it believes postal “employees and retirees are well-served by the existing health benefits program and retirement system,” Berry said.
Berry spoke at a Senate hearing exploring the Postal Service's perilous financial situation. Postmaster General Patrick R. Donahoe told senators that USPS could lose up to $10 billion and have little more than a week’s worth of money left in the bank when its fiscal year ends Sept. 30.
Running out of money and slashing service “is the last thing our struggling economy needs and the last thing our country needs,” Sen. Joseph I. Lieberman (I-Conn.) said at the hearing.
Sen. Susan Collins (R-Maine), a leading voice on postal affairs, agreed, blasting the Obama administration for failing to draft a financial rescue plan despite months of warnings on the Postal Service's perilous financial condition.
“We’re going to figure this out,” Berry told senators as the hearing began. “I’m confident we’re going to figure this out.”
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