Postal reform bill heading to Senate floor

Thursday - 2/6/2014, 3:51pm EST

The Senate Homeland Security and Governmental Affairs Committee gave its stamp of approval Thursday to a sweeping overhaul of the cash-strapped U.S. Postal Service.

In a bipartisan 9-1 vote, the committee approved the 2014 Postal Reform Act and sent the measure to the Senate floor.

Senate progress on the bill — the brainchild of Committee Chairman Tom Carper (D-Del.) and Tom Coburn (R-Okla.), the ranking member — has been inching along in recent months. In August, Carper and Coburn first introduced their bipartisan postal reform bill. But efforts to move forward with a committee markup of the bill were delayed a number of times throughout last fall and winter.

Finally, last week, the committee debuted a revised version of the bill that presented a laundry list of proposals to revamp the financially troubled Postal Service. Among the proposals are creating a Postal-only health-insurance option within the Federal Employees Health Benefits Program (FEHBP) and a timeline for the agency to potentially move to five-day mail delivery. The postal health plan proposal aims to rid the agency of the need to prefund future retirees' healthcare payments — multibillion annual payments mandated by a 2006 law that the Postal Service has defaulted on over the past two years.

Carper said the goal for legislation is long-term solutions to the agency's financial crunch so "that we can actually look one another and the American people in the eye and say, 'We fixed this problem.' We haven't kicked the can down the road. We've actually fixed this problem to put the Postal Service in a position to go on — not just to hang on, not just to continue to twist in the wind — but to be relevant and vibrant in the years going forward."

Thursday's vote came after hours of debate on amendments to the bill, including on the contentious issue of setting postal rates and easing restrictions on firearms in and near local post offices. The committee also debated amendments last week but ended that session without a vote.

Unions object to the bill

The bill has drawn the ire of postal-employee unions, however. In a Jan. 27 letter to lawmakers, the four postal unions, presenting a united front, objected to a new requirement that the Postal Service shore up unfunded liabilities in the workers' compensation trust fund — to the tune of $17 billion — which unions called "totally unfair and unncessary" and could threaten, once again, to be a drag on the agency's finances.

Also drawing ire is a provision allowing the agency to move to five-day delivery if mail delivery volume falls below 140 billion pieces annually, which current Postal Service estimates indicate would be about 2017.

The unions called the proposed mail-volume threshold "arbitrary," and would only delay what it contends are damaging service cuts.

The bill also includes several proposed changes to the Federal Employees Compensation Act, including cutting benefits in half for disabled workers once they reach full retirement age. The overall rate of compensation would also be reduced to 66.7 percent of workers' pre-injury salary for all beneficiaries. Currently, FECA enrollees with dependents receive up to 75 percent of their salary in benefits.

Sen. Jon Tester (D-Mont.) introduced an amendment that would only exempt the proposed FECA changes from current FECA enrollees. However, in a vote, the committee defeated that amendment. Last week, Tester unsuccessfully sought to strip the proposed FECA overhaul entirely from the postal reform bill.

That National Active and Retired Federal Employees Association is urging a "no" vote on the underlying bill because of the FECA provisions.

"Changing the workers' compensation system for the entire federal workforce has no place in a controversial postal reform bill, and I urge members of the committee to reject this misguided piece of legislation," NARFE President Joseph Beaudoin said in a Feb. 6 statement.

It's unclear when the committee bill will see a vote in the full Senate.

The Republican-controlled House Oversight and Government Reform Committee passed its own version of postal reform last July entirely along partisan lines, but it has yet to see a vote in the full House.

Meanwhile, after two years of double-digit multibillion losses, the agency's losses appear to have stabilized somewhat. Last year, the agency posted a $5 billion loss, but also its first growth in revenue since 2008.

The agency is set to announce financial results for the first quarter of fiscal 2014 Friday.

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