The U.S. Postal Service's pension fund is on track to amass an even bigger surplus than predicted, the General Accounting Office reported yesterday.

With its current stream of payments, the Postal Service will overfund its retirement program by $103 billion over the long term, said the GAO, Congress's investigative arm. An analysis by the Office of Personnel Management in November projected a long-term surplus of $71 billion.

Officials with the Postal Service, which is funded by operating revenue rather than tax dollars, generally welcomed the new report. But they acknowledged that some of the GAO findings could make it harder to win congressional approval to reduce payments to the fund by billions of dollars each year, a move the financially strapped Postal Service says would allow it to delay a postage increase until 2006.

The GAO said Congress should determine whether some of the projected surplus should be used to pay down the Postal Service's $11.1 billion debt and address its $40 billion to $50 billion in unfunded health obligations for retirees.

"I was a little bit disappointed that GAO indicated that Congress needed to determine what to do with these funds," said Richard Strasser, the Postal Service's chief financial officer. "We've already gone on record indicating that we would use them to pay down debt. . . . I'd like to think that Congress would, as they have in the past, delegate financial matters to the Postal [Service] Board [of Governors] and postal management."

The Bush administration has backed the idea of reducing the Postal Service's annual retirement fund payments from $4.7 billion to $1.8 billion in fiscal year 2003. The Senate included language on the Postal Service in the omnibus 2003 appropriations bill, and could hash out the issue in a House-Senate conference as early as this month. Failing that, the Postal Service would have to hope for legislation on the matter later this year.

One political complication is a recent Congressional Budget Office analysis showing that reducing the Postal Service's retirement fund payments would increase federal budget deficits by $15 billion over the next five fiscal years. That would not be popular with lawmakers who already are grappling with the tension between rising budget deficits, increased spending on defense and homeland security, and President Bush's proposal for more tax cuts.

Postal officials say they will need to raise the price of stamps next year if they are not allowed to reduce retirement fund payments. The most recent increase took effect in June, when the cost of a first-class stamp went up three cents, to 37 cents.

The Postal Service has an annual budget of $70 billion and has not turned a profit since 1999. The agency lost $676 million last year, but even without the extra retirement money has forecast a surplus of $600 million this year as a result of the postage increase and cost-cutting measures.

The OPM analysis last year found that the retirement program was on track to a large surplus largely because of a higher than expected yield during the past 30 years on the Postal Service's pension fund investments, which are managed by the U.S. Treasury.

The GAO said the OPM had underestimated the surplus, in part, because OPM assumed that the Postal Service would pay retirement benefits to some workers related to their military service. Although that responsibility under current law falls to the Treasury, the administration has suggested shifting the responsibility to the Postal Service.

A spokesman for Rep. Thomas M. Davis III (R-Va.), chairman of the House Government Reform Committee, said Davis plans to create a task force headed by Rep. John M. McHugh (R-N.Y.) to explore postal reform.