House subcommittee pushes forward GOP plan to repair USPS

Thursday - 9/22/2011, 6:44am EDT

Emily Kopp, reporter, Federal News Radio

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Partisan bickering over what to do with more than 100,000 surplus postal employees overshadowed a House subcommittee's approval of a bill to overhaul the ailing Postal Service.

The bill, sponsored by Reps. Darrell Issa (R-Calif.) and Dennis Ross (R-Fla.), would let an independent committee take over Postal Service finances and make decisions on labor contracts if the agency were more than 30 days late in paying its bills. A second committee would decide which postal facilities to close.

"Eighty percent of the Postal Service's costs is labor," said Issa.

The House Oversight and Government Reform Subcommittee on Federal Workforce, the Postal Service and Labor Policy approved the bill along party lines, 8-5. The full committee will take it up next.

The Postal Service is expected to lose about $10 billion this year. Officials blame the agency's financial problems on a 2006 law that requires it to make prepayments to the federal retirement systems. They have proposed closing facilities and shedding more than 100,000 employees to streamline the postal network. Congress currently has considerable influence over facility closures. In addition, lawmakers would have to pass a law to let the agency break union contracts that prohibit layoffs.

Subcommittee Democrats accused the bill's sponsors of trying to weaken organized labor.

"The agenda is to break the back of public employee unions," said Rep. Gerald Connolly (D-Va.).

Rep. Elijah Cummings (D-Md.) introduced a competing measure just hours before the meeting that would let the Postal Service recover $6.9 billion that it says it has overpaid to the Federal Employees Retirement System. The Postal Service could use that money to offer buyout incentives to employees, which Cummings said was more "dignified" than the alternatives proposed.

"The last thing we want to be doing is destroying jobs and putting people in a worse situation, unable to provide for families," he said at a press conference to announce his bill.

But Republicans were skeptical about whether the Postal Service really had paid too much for retirement benefits.

"This is subject to market fluctuations over time which is why, actuarially, at any given time, that is not actually what is or is not the unfunded liability of a retirement system," said Ross. "I think there's a more creative way to approach incentivizing, and that's through a collateralized loan option."

Democrats in the Senate criticized the bill, foreshadowing what could be a bicameral stalemate.

"Instead of putting in place the reforms the Postal Service needs to prevent such a devastating collapse from happening, this bill would abdicate responsibility for cleaning up what would be a colossal financial disaster both for the Postal Service and the broader economy to a newly-created government entity," said Sen. Tom Carper (D-Del.), who has sponsored his own bill.

President Barack Obama proposed earlier this week his plan to help the Postal Service. Like the Issa-Ross bill, the White House would let the Postal Service reduce delivery to five days a week, but it also would return the FERS money to the agency so that it could offer early retirement packages. He has asked the "supercommittee" that is working on a plan to lower the federal deficit to include his ideas in its legislation.

If the President is successful and the committee succeeds in drafting a plan, lawmakers will be able to vote only yes or no. They would not be able to amend the package.

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