CQ TODAY ONLINE NEWS
June 29, 2011 – 4:03 p.m.
Postal Service Proposals Diverge on Recovery of Retirement Funds
By Emma Dumain, CQ Staff
Republicans and Democrats on the House Oversight and Government Reform Committee agree that the U.S. Postal Service is in trouble and needs an overhaul — but that is where the consensus ends.
Chairman
At the crux of the lawmakers’ differences is whether the Postal Service should be allowed to reclaim billions of dollars in excess payments it has made into government employee retirement funds.
By congressional mandate, the Postal Service has for decades been making employee benefit payments into the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS). It has been paying too much, however, accumulating a combined surplus in the accounts ranging from $60 billion to $80 billion.
The Postal Service says that if it could recoup that surplus, it would use the money to streamline operations and put itself on a path to fiscal solvency. The Postal Service announced last week it was suspending additional FERS payments indefinitely.
Cummings’ bill (
But Issa argues that returning the money would amount to a government bailout. His bill (
“Congress can’t keep kicking the can down the road on out-of-control labor costs and excess infrastructure of USPS and needs to implement reforms that aren’t a multibillion-dollar taxpayer-funded bailout,” said Issa, who introduced his bill last week with Postal Service Subcommittee Chairman
Unions Back Democratic Plan
Chances are slim that Cummings and Lynch will get very far with their plan in Issa’s committee, but they have 145 Democratic and 13 Republican cosponsors and the support of the American Postal Workers Union and the National Association of Letter Carriers.
Issa and Ross would eliminate Saturday mail delivery and allow existing collective bargaining agreements to be renegotiated should the Postal Service default — both unsavory provisions in the eyes of unions.
Fredric V. Rolando, president of the Letter Carriers, called Issa’s bill “a draconian downsizing plan and a misguided and unjustifiable attack on hardworking postal employees.”
The Postal Service would like a five-day delivery schedule, but it wants to recoup the retirement money.
Postal Service Proposals Diverge on Recovery of Retirement Funds
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“We strongly oppose a provision in the [Issa] bill that provides for an additional $10 billion in borrowing authority from the U.S. Treasury,” the service said in a written statement. “The Postal Service does not need to incur additional debt — we need the money back that is already owed to us.”
Issa spokesman Ali Ahmad said the borrowing authority in Issa’s bill would be held by a solvency control board activated only if the Postal Service defaulted, and that Postal Service property would be used as collateral.
Supporters of the Issa legislation also reject the idea that all of the retirement money the Postal Service wants to reclaim actually represents overpayments. While they acknowledge a surplus in the FERS account, they say the Postal Service agreed to the CSRS payment formula in 1974.
Senate sponsors of postal overhaul legislation are not facing similar tensions on the issue of overpayments. Bills offered by Republican