The Senate passed legislation yesterday to allow the U.S. Postal Service to scale back some of its pension payments, a move that would keep postal rates flat until fiscal 2006.

The House is scheduled to consider an identical bill today.

Under both bills, the Postal Service would keep billions of dollars it would have paid into the Civil Service Retirement System fund, which covers employees who joined the agency by 1983.

Projected savings include $2.9 billion this fiscal year and $2.6 billion in fiscal 2004, according to USPS estimates. The Postal Service would be required to use the money to pay down its $11.2 billion debt and stave off rate increases over the next three years. It could not use the money to pay bonuses to its executives.

The pension contributions can be reduced without hurting current and future retirees, supporters say, because an Office of Personnel Management analysis last year showed that the Postal Service was on course to overfund its pension obligations by $71 billion.

Allowing the overpayments to continue would mean more frequent postage rate increases that would hurt consumers and the $900-billion-a-year mailing industry, USPS officials and their allies have argued. The Postal Service has said it will need to raise prices next year if it is not allowed to reduce fund payments.

"In so many ways, postage rate increases have a significant economic impact," said Sen. Susan Collins (R-Maine), chairwoman of the Senate Governmental Affairs Committee and chief sponsor of the bill in the Senate.

Rep. John M. McHugh (R-N.Y.), sponsor of the House bill, said, "Congress needs to do everything in its power to ensure a modicum of rate stability."

The Postal Service, which is funded by operating revenue, has an annual budget of $70 billion and has not turned a profit since 1999. It has been hit hard by a drop in advertising mail caused by the recent recession, disruptions after the Sept. 11, 2001, attacks and competition from e-mail and online bill-paying services.

The OPM analysis found that the retirement program was on its way to a large surplus largely because of a higher than expected yield during the past 30 years on the pension fund investments.