Issa introduces bill to overhaul U.S. Postal Service, increase regulation

June 23, 2011

Rep. Darrell Issa (R-Calif.) introduced legislation Thursday to restructure the U.S. Postal Service, saying more regulation is necessary to “prevent another taxpayer bailout” of the financially strapped agency.

The bill would eliminate Saturday delivery and give the Postal Service greater latitude to close post offices and regional mail processing centers. A panel would be created to oversee the agency, 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. “Congress can’t keep kicking the can down the road on out-of-control labor costs and excess infrastructure of USPS,” Issa said in a statement.

The panel also would have authority to renegotiate collective-bargaining agreements with postal workers, a provision that will draw stiff opposition from unions. If the bill becomes law, employees will probably see reductions in their wages and benefits.

The plan from the chairman of the House Committee on Oversight and Government Reform would eventually save the Postal Service $6 billion a year. It comes on the heels of the agency’s announcement that it plans to suspend its contributions to the pensions of thousands of workers to help stem billions of dollars in losses.

Postal officials said they agree with some provisions in the bill; the agency proposed eliminating Saturday delivery several years ago. But they said Issa wrongly assumes the agency’s path to financial stability lies in more regulation. “The opposite is true,” the agency said in a statement. “Our financial instability is the result of dramatic loss in volumes, coupled with restrictions imposed by Congress that have prevented the Postal Service from adequately responding to those losses in a business-like fashion.”

The Issa bill follows at least three pending efforts in Congress to restructure the Postal Service by capping the growth of the workforce and cutting benefits and services.

Under debate is whether Congress should reduce the agency’s annual $6 billion payment to pre-fund health benefits for retirees and reimburse it for what congressional watchdogs have called $50 billion to $75 billion in overpayments to the Civil Service Retirement System.

The Issa bill does not address either payment.

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