House lawmakers to square off over plans to fix USPS

Tuesday - 9/20/2011, 7:23pm EDT

Emily Kopp, reporter, Federal News Radio

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The House subcommittee that oversees Postal Service operations will consider legislation Wednesday to help the struggling agency return to solid financial footing.

The bill, sponsored by subcommittee chairman Rep. Dennis Ross (R-Fla.) and House Oversight and Government Reform Committee Chairman Rep. Darrell Issa (R-Calif.) would let the Postal Service stop delivering mail on Saturdays, dramatically increase postage rates and charge employees more for health insurance.

It differs from competing proposals from the White House and the Senate in two key ways: It would not let the Postal Service take back the $7 billion that it has overpaid to the federal retirement system. And it would set up a commission to reorganize the agency's network, rather than let the Postal Service attempt the restructuring on its own.

"We're heartened that the chairman sees the importance of moving quickly to get postal legislation done this year, and we want to work with him, the administration and the Senate to come up with a package that is bipartisan, appeals to everyone and can stabilize the Postal Service's financing going forward," said deputy postmaster general Ron Stroman in an interview with Federal News Radio.

But Stroman said the agency would need to recoup some of the money that it has overpaid to the Federal Employees Retirement System because it is running out of cash.

"This is not taxpayer money. This is money that our employees have put in and we're asking to get that overpayment back to the employees," he said.

Earlier this week, President Barack Obama presented his package of postal reforms. He would let USPS regain the $7 billion over two years and to adjust future payments for retiree health benefits.

Before the markup Wednesday, Democrats on the House committee will announce their own plan. Like the President, Reps. Elijah Cummings (D-Md.) and Stephen Lynch (D-Mass.) would let the Postal Service revise its schedule of healthcare payments to the Treasury and offer financial incentives for early retirement. Their plan also would let the agency expand in to new lines of business and lease its property.

As for the Senate's billsósponsored by Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.), an aide to the Senate Homeland Security and Governmental Affairs Committee said it may mark up postal legislation next month.

House Republicans do not support the idea of letting USPS regain its overpayments.

"The accounting gimmicks used in the plan are a thinly veiled attempt to offset continued operating losses with a taxpayer funded bailout," said Issa in a press statement issued Monday.

But the Postal Service has pushed for the refund. Stroman said that would give the Postal Service "breathing room" to revamp its delivery and service networks.

"To provide us with this infusion of cash would give us the ability to operate the network for several years without the worry that we'd run out of cash," he said. "It would allow us to begin taking costs out of the system at a level that, while not as quick as we'd like, fast enough to sustain the Postal Service over a couple of years."

The Postal Service has said that it would default on a $5.5 billion payment to the Treasury this month and estimates that it will have just one week's worth of cash left after paying October bills. Officials say without legislative reform, the agency would cease operations within a year. The rise of email and online services, compounded with the sluggish economy and a requirement to prepay retiree benefits, has left the Postal Service in the red.

Under the Obama plan, the Postal Service could use the cash to offer buyouts to employees eligible to retire. The Postal Service wants to trim its workforce by more than 100,000 people over the next three years.