Issa's postal reform proposal OKs 5-day delivery, modifies prefunding

Thursday - 6/13/2013, 7:37pm EDT

A draft postal reform bill from the chairman of the House Oversight and Government Reform Committee supports ending Saturday mail delivery and would modify how the agency pre-funds retiree health-care payments that now threaten to sink the agency into financial insolvency.

Committee Chairman Darrell Issa (R-Calif.) released the proposed legislation as a "discussion draft" to gather comments on the bill before it's formally introduced, according to a notice on the committee's website.

Congressional postal reform efforts have remained dormant so far this year, even as the Postal Service's financial outlook has worsened.

The draft bill puts a stamp of approval on the Postal Service's plans to end first-class mail delivery on Saturdays while retaining package delivery, which the agency estimates will save as much as $2 billion a year.

In February, Postmaster General Pat Donahoe announced a unilateral plan that would end Saturday mail delivery beginning in August. However, a spending bill passed by Congress the following month restricted the agency from doing so, and Donahoe backed down. The agency now maintains it needs legislation to change its delivery schedule.

In a summary of the bill, Issa's committee pointed to poll numbers that show the public overwhelmingly supports the move, although postal unions staunchly oppose it.

Issa's proposed bill would also modify the payment plan under which USPS is required to prefund retirees' health benefits. Under the current system (in place since the 2006 Postal Accountability and Enhancement Act), the agency is required to make a set of massive fixed payments each year. USPS defaulted twice last year on these payments — totaling more than $11 billion — and may do so again when the next payment is due in September.

The proposed reform bill switches the Postal Service to an actuarial-based system of payments, a measure supported by the Government Accountability Office as a "fiscally responsible" method of modifying the payment schedule.

Also helping to ease the prefunding burden is a provision that would return projected overpayments the agency makes to the federal retirement system. Issa's bill calls for the projected surpluses to be transferred to the Postal Service's health-benefits fund on an annual basis.

"The legislation will create a permanent mechanism that ensures projected surpluses in the Postal Service's pension system do not go to fund operating losses at the Postal Service, but instead protect other benefits already earned by its employees," a summary of the bill stated.

The Senate's postal reform plan and USPS, itself, have pushed for the overpayments to be refunded to the agency to more generally help pay down its debts.

The bill proposes a number of other workforce measures, including one barring future contracts from restricting the Postal Service's use of reductions-in-force — sure to draw union outrage and opposition.

The draft bill is similar to legislation Issa introduced in 2011. One notable absence in the most recent iteration, though, is a provision to set up an independent commission for closing postal facilities — modeled on the Base Realignment and Closure (BRAC) plan. The latest draft version dropped that measure citing the "significant progress" USPS has made in consolidating facilities as part of the cost-saving initiatives it has taken on its own.

An Issa spokesman declined to provide specifics for when the draft bill would be formally introduced.

Issa's counterpart in the Senate, Tom Carper (D-Del.), chairman of the Senate Homeland Security and Governmental Affairs Committee, said he's continuing to work with members of both parties on a package of postal reforms.

"While we differ in our approach in some areas, Chairman Issa and I, and the rest of our colleagues, are united in our effort to restore the Postal Service to solvency and give it the tools it needs to thrive in the years to come," Carper said in a statement. "It remains my goal to come up with a bipartisan, bicameral postal reform bill in the coming weeks."

Fredric Rolando, president of the National Association of Letter Carriers, said he was disappointed Issa's bill didn't take a "fresher approach" to reform legislation.

"However, we appreciate the chairman's invitation to provide input to this legislation before it is formally introduced, and we welcome this opportunity to engage in discussions of this proposed bill with him, his colleagues on the Oversight Committee and the entire House of Representatives," Rolando said in a statement.

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