Issa proposes new legislation to restructure Postal Service

June 13, 2013

The chief House architect of a postal service overhaul bill that failed to gain traction in the last Congress is back with new draft legislation that would allow the financially ailing agency to move to five-day delivery and ban it from entering no-layoff agreements with employees.

The changes proposed by House Oversight Committee Chairman Darrell Issa (R-Calif.) on Thursday would allow the financially ailing Postal Service to eliminate an annual $6 billion payment to pre-fund health costs for future retirees, a major concession that is likely to help the bill’s chances in the Senate.

The pre-funding requirement and plummeting mail volume have pushed the mail agency into multi-billion-dollar deficits in recent years, and postal officials have warned they will default on a third pre-funding payment this year.

However, the proposal is likely to meet opposition from Democrats in the House and Senate, who see the provision allowing layoffs as unfriendly to labor. The Senate approved a bill last year that postponed five-day delivery for two years, among other provisions; the House did not bring a bill to the floor.

As before, the legislation would create a panel to oversee the Postal Service modeled on the District of Columbia’s Financial Control Board, with a broad mandate to reduce costs and bring the agency back to financial solvency. It would replace the current Board of Governors for several years.

The new plan scraps a system modeled after the military’s Base Closure and Realignment Commission and opposed by postal officials that would have allowed a separate board to decide which post offices and mail sorting hubs the Postal Service should close.

But it keeps in place a five-member board appointed by Congress that would replace the current Board of Governors until the Postal Service is back in the black.

“Right now the Postal Service is hurtling toward complete insolvency,” says a fact sheet on the draft bill. “If USPS cannot pay its bills, the American taxpayers will almost certainly be asked to pick up the tab.”

“This plan will give the Postal Service need tools to cut costs and restructure its finances, while ensuring it has the capital necessary to do so.”

Issa’s Postal Reform Act of 2013 will not be formally introduced for months, congressional aides say. But by circulating a long-awaited draft of his proposed legislation, they say, Issa hopes to work with labor, rural lawmakers and groups that opposed his effort in the last Congress.

The draft comes on the heels of a failed attempt by Postmaster General Patrick Donahoe to drop Saturday mail delivery without congressional approval. Donahoe said he was acting in desperation because Congress failed to approve a restructuring plan for the mail agency, which lost $15.9 billion last year.

But he was forced to back down after lawmakers objected.

Issa and his Democratic counterparts in the House and Senate have expressed a desire to reach agreement on a restructuring plan during this Congress.

The legislation also would require the Postal Service to move aggressively to halt curbside delivery of the mail in favor of post office boxes or clustered boxes on street corners, a change Issa says could save at least $4 billion annually but that unions oppose.

Postal officials had no immediate comment on the proposal. In the past, they agreed  with some provisions in Issa’s bill; the agency has proposed eliminating Saturday delivery for years.

But the agency has said that Issa wrongly assumes the agency’s path to financial stability lies in more regulation by a new entity.

 

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Eric Yoder | June 13, 2013