Congress faces continuing resolution, sequestration and postal reform

Monday - 9/10/2012, 6:47pm EDT

By Jolie Lee
Amanda Iacone &
Jack Moore

Lawmakers returned to Washington, D.C., this week with a packed agenda. Topping the list of priorities is hammering out final details of a stopgap spending measure to keep the government running beyond the end of the fiscal year Sept. 30.

Amid the election-year politicking, the list of unfinished business also includes legislation to restructure the financially ailing U.S. Postal Service and a cybersecurity bill that aims to safeguard the nation's critical infrastructure.

Perhaps looming largest of all is what Congress plans to do about automatic, across-the-board cuts, known as sequestration, set to take effect Jan. 2. Failure to avert the cuts could send the country over a "fiscal cliff," budget experts warn.

CR and sequestration

House Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) announced the broad outlines of a continuing resolution early last month, shortly before lawmakers left town for a five-week recess.

Speaker of the House John Boehner (R-Ohio)

House and Senate appropriators have since worked out the details of the CR, which was posted by the House Rules Committee Monday. The CR funds the government through March 2013 and caps fiscal 2013 discretionary spending at $1.047 trillion, slightly more than fiscal 2012.

But observers don't expect the negotiations surrounding sequestration — $1.2 trillion over 10 years in automatic cuts — to be so straightforward.

Nearly all sides agree the cuts would be devastating, especially to the Defense Department. But proposals to avert, replace or cancel them face an uncertain future.

The Republican-controlled House passed the Sequester Replacement Act in May, which would nullify the automatic cuts and replace them with with alternative budget savings. Among them is a measure that would gradually increase federal employees' pension contributions — from 0.8 percent to 5.8 percent over five years. The bill would also cut a supplementary payment for federal workers who retire before they're eligible for Social Security — but only for new hires.

The vote fell mostly along party lines.

The Senate has not taken up similar legislation, and most analysts think any further action on an alternative to sequestration is unlikely until after the presidential election.

"We believe this should be addressed and fixed before the election and have offered to work with Democrats to do so, but they have rejected those offers," Kevin Smith, a Boehner spokesman, told Federal News Radio in an email.

Reid's office did not immediately reply to a request for comment.

The White House is set to deliver a report this week — nearly a week behind schedule — detailing how sequestration would be applied to individual programs should a deal fall through.

Postal reform

Congressional efforts to stave off further losses of the nearly bankrupt Postal Service have failed this year. The Senate approved a postal reform bill in the spring. However, the House version, which takes a very different tack to returning the USPS to solvency, has languished.

That has prompted Rep. Darrell Issa (R-Calif.), the chairman of the House Oversight and Government Reform Committee, to propose including an interim postal reform package in the CR to be introduced this week.

Rep. Darrell Issa (R-Calif.)

"Although there are ongoing discussions among legislators and stakeholders concerning how to move a full postal reform package forward, it is unlikely that a final comprehensive agreement could be negotiated between both chambers in that narrow time frame in September," Issa wrote in a Sept. 7 letter addressed to President Barack Obama. "The post-election lame duck session will provide a much greater window of opportunity to enact legislation to restore the Postal Service to solvency."

Issa's proposal would defer near-term payments on retiree health care benefits, allow the agency to move to a five-day delivery week and bar the agency from entering into no-layoff agreements with its employees.

That's quite different from the remedies proposed by the Senate in its version of the bill, which passed with bipartisan support in April.

The Senate bill would refund to USPS overpayments it made to the federal retirement system and allow the mail agency to offer buyouts to 100,000 retirement-eligible employees. The bill also would allow the Postal Service to work with its unions to create a separate insurance program, moving employees out of the Federal Employees Health Benefits Plan.

But the House version of postal reform, sponsored by Issa, has not been taken up for a vote. That bill would create an organization with power to restructure the Postal Service, including recommendations for facility closures. It also would cut mail delivery to five days a week.

Last month, the co-sponsors of the Senate bill urged the House to pass its version of the bill before the Postal Service, for the first time ever, defaulted on a payment toward its future retiree health care obligations. Passage of the House bill would "allow the two chambers to reconcile the differences between the bills," according to a release from Sen. Tom Carper (D-Del.), one of the co-sponsors.

"The House of Representatives has had nine months to do the right thing and fix the serious, but solvable, financial challenges plaguing the U.S. Postal Service," Carper said in a statement. "Unfortunately, it appears that House Republican leaders have decided to punt on passing postal reform legislation for the foreseeable future, pushing this American institution to the brink of default for the first time in its history."

In the meantime, USPS is moving ahead with consolidating mail processing centers at 461 processing centers and cutting operating hours at 13,000 post offices. The agency also offered early outs to 13,000 retirement-eligible employees and to 45,000 mail handlers.

Cybersecurity

The other piece of unfinished congressional business is comprehensive cybersecurity legislation, which failed last month to garner enough votes to move forward on a final vote.

Sen. Susan Collins (R-Maine) wants Congress to keep working on the long-debated, bill even as the White House prepares to issue an executive order that would detail how to improve security of the nation's information networks from the power grid to financial data.

Sen. Susan Collins (R-Maine)

Collins told Federal News Radio an executive order should not be a substitute for legislation and that Congress should continue working to better protect the country from cyber attacks.

"I am deeply disappointed that the Senate failed to pass our bipartisan bill before the August recess, but it remains imperative that this Congress address this issue," Collins said in a statement. "An executive order could send the unintended signal that congressional action is not urgently needed."

But with election season underway, lawmakers have a limited number of days they will be back on Capitol Hill.

Collins and Sen. Joe Lieberman (I-Conn.) have worked to draft a compromise bill that addresses the concerns of some lawmakers to protect trade secrets and to not hamstring private businesses with more regulations. Other hangups include which department or agency would oversee cybersecurity protections.

The draft executive order is similar to the second version of the cybersecurity legislation the two senators introduced in July. For example, the draft calls for the Homeland Security Department to identify critical infrastructure owned and operated by federal agencies and to assist the agencies in identifying and mitigating risks.

The final draft also calls for a report within 120 days that would lay out incentives for businesses to comply with the order. Incentives could include liability protection, expedited security clearances and recognition by the government that the critical-infrastructure owner and operator meet the voluntary standards, which is also similar to the Lieberman-Collins bill.

Lieberman, who chairs the Homeland Security and Governmental Affairs Committee, still hopes that lawmakers will come together to pass a bill this year, said committee spokeswoman Leslie Phillips.

"I still hope that Congress will pass cybersecurity legislation," Lieberman said in a statement. "But if Congress cannot get its act together to protect our nation from the real, urgent, and growing threat of cyber attack, then the President must do everything he can by executive order. The problem is there are things that must be done by statute."

Senate leaders hoped to bring the compromise bill up for a vote before lawmakers left Washington for the August recess. But the bill never made it to the floor because of a lack of support despite warnings from the country's top security officials.

Security officials also say private industries must share threat information with the government but also adhere to basic security requirements.

The U.S. Chamber of Commerce and Republicans lawmakers supported a competing bill from Sen. John McCain (R-Ariz.), which is similar to legislation the House passed last spring. Those bills limit their focus on sharing threat information between the federal government and private sector. But the White House has threatened to veto the House bill because its bill doesn't do enough to protect privacy rights, an issue addressed in the draft order.

(The Associated Press contributed to this report)

RELATED STORIES:

Congress returns for short pre-election session

White House misses deadline to deliver sequestration report

Congress running out of time to pass priority bills