PMG Fights Congress on Postal Reform
The U.S. Postal Service reiterated this past week—in hearings before the House Oversight and Government Reform Committee—just how crucial it is that Congress undertake reforms that are necessary for the USPS to accrue the savings to restore its fiscal state.
There should be no "half measures," Postmaster General (PMG) Pat Donahoe stated.
First, PMG Donahoe questioned draft "discussion" legislation being devised by Rep. Darell Issa (R-CA) to enable USPS management's bold efforts to "right size" Postal Service costs and infrastructure to volume trends. As Direct Marketing News reported on July 17:
"The draft did not appear to meet the full approval of the PMG, however, who is adamant that any new legislation remove the U.S. Postal Service's obligation to prefund employee health and retirement programs. Issa's plan calls for future payments to be made on an actuarial calculation that will reduce the Postal Service's annual $5.7 billion prefunding payment, which it defaulted on last year.
"'We are seeking the authority under the law to control our healthcare and retirement costs. We can completely eliminate the need for Retiree Health Benefit prefunding if we can move to our proposed solution,' Donahoe said, addressing Issa directly."
The Postmaster General maintains that being allowed to set up its own healthcare coverage for retirees programs would lower premiums paid by employees, while delivering up to $8 billion in savings annually. Donahoe also is asking Congress to return $6 billion in USPS "overpayments" to the Federal Employees Retirement System (FERS).
At this juncture, Rep. Issa's discussion draft does not include provisions for enabling these savings in full, and the Postmaster General says time is running out-or more defaults will be in the offing. (The next default on payments likely will occur this September, Reuters reports.)
Next, the Postal Service is seeking Congressional approval—and likely Postal Regulatory Commission approval as well—on a five-day delivery plan for residential mail delivery, and the estimated $2 billion in savings it estimates it would achieve there. The false start earlier this year—USPS unilaterally announced its five-day delivery intent beginning August, and Congress promptly shot those plans down the following month—doesn't mean that five-day delivery is dead. On the contrary, USPS management believes such savings are crucial toward keeping delivery costs in line with volume and revenue: First-Class Mail volume, in particular, continues its decline, despite an improved U.S. economy.