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Federal Eye
Posted at 01:10 PM ET, 11/02/2011

Postal Service rescue bill unveiled in the Senate


A U.S. Postal Service employee pushes a cart at a mail processing center in Fort Lauderdale, Fla. in September. (Joe Raedle - GETTY IMAGES)
A bipartisan Senate bill introduced Wednesday would give the U.S. Postal Service about $7 billion to pay for employee buyouts and other debts, allow a renegotiation of postal worker health care benefits and require two years of studies before ending Saturday mail deliveries.

The plan, a modified version of proposals previously introduced by Sens. Thomas Carper (D-Del.) and Susan Collins (R-Maine), will be considered by a Senate committee next Wednesday.

The bill refunds about $7 billion that auditors agree the Postal Service has overpaid into federal worker retirement accounts. The money would be used in part to offer buyouts of up to $25,000 to as many as 100,000 eligible postal workers, with the funds put towards other debts.

Refunding the money “is not a bailout,” Sen. Joseph I. Lieberman (i-Conn.) said. “It’s the result of a legal analysis that everybody agrees with, that this was in fact an overpayment by the Postal Service” into the Federal Employee Retirement System.

House Republicans disagree and consider any attempt to refund the Postal Service with money from federal retirement or health-care accounts a taxpayer-funded bailout.

The Senate bill also scraps a 10-year payment schedule that requires the Postal Service to pay about $5.5 billion annually to prefund future worker retirements. The bill would spread out those payments over 40 years, significantly reducing the annual obligations that postal officials say cause much of the mail agency’s cash shortfalls. The Postal Service also would be allowed to renegotiate a new health-care plan with its major worker unions to help cut costs.

Short-term spending legislation passed last month by Congress gave USPS to make its annual prefunding payments. Aides said Wednesday they did not know whether the Postal Service would earn another extension or be forced to make the payment once final spending legislation is passed.

If the bill passes, plans to end Saturday mail deliveries would have to wait at least two more years until USPS and postal regulators further study the potential affects on customers and industries that rely on six-day mail deliveries.

The Postal Service also would have to scrap delivering mail to doorside mailboxes in favor of sidewalk, curbside or centralized neighborhood boxes. The bill also forces USPS to further study the effects of closing post offices and mail processing facilities – a move that postal officials said could save billions of dollars in operating costs.

“Without taking controversial steps like these, the Postal Service simply isn’t going to make it,” Lieberman said. “That would be terrible.”

Collins said the bipartisan plan – also backed by Sen. Scott Brown (R-Mass.) – is a more thoughtful, studied approach than the bill introduced last month by House Republicans.

“We are not crying wolf here,” she said. “The Postal Service literally will not survive unless comprehensive legislative and administrative reforms are undertaken.”

The House plan, sponsored by Rep. Darrell Issa (R-Calif.), also calls for ending doorside deliveries and for ending Saturday mail, but would establish a financial control board to overhaul postal finances – a move critics say could result in layoffs – not buyouts – of hundreds of thousands of postal workers.

Issa’s bill was approved by his House Oversight and Government Reform Committee last month, against the objections of Democrats who said it was too quickly considered and would unfairly target postal workers.

The Postal Service said Wednesday it is reviewing the legislation, and thanked Lieberman, Collins, Carper and Brown for unveiling a bipartisan proposal.

Industry groups representing some of the nation’s biggest mailers, including publishers, financial services firms and retailers, also praised the proposal.

But postal labor unions – which generally oppose any proposal that results in layoffs or buyouts – did not immediately react.

Follow Ed O’Keefe on Twitter: @edatpost

Further reading:

A Postal Service compromise in the works?

Postal workers rallying nationwide for postal reform bill

Full Federal Eye coverage of the U.S. Postal Service

For more, visit PostPolitics and The Fed Page.

By  |  01:10 PM ET, 11/02/2011

Categories:  Postal Service, Congress

 
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