Senator calls for USPS reforms to tackle pension overpayments

US Senator Tom Carper has said more needs to be done to stabilize the “precarious” financial situation at the US Postal Service, beyond the proposals in yesterday’s Presidential Budget. The proposals from the White House confirmed the Administration’s intent to push for reforms of the system in which USPS pre-funds future healthcare costs for its employees.

The move would mean $4bn in temporary relief for the USPS and $5bn long-term relief for an organization that is otherwise expected to hit its Congress-set $15bn borrowing limit by September.

It would also return $6.9bn to the USPS from its overpayments into the Federal Employees Retirement System, although the refund would come over a 30-year period.

Sen. Carper, who chairs the Senate subcommittee overseeing the USPS, said the Budget proposals were an “important first step”.

However, he said reforms were also needed regarding “massive” overpayments the USPS has also been making into the Civil Service Retirement System.

“More clearly needs to be done in order to address the Postal Service’s long term fiscal problems,” the Senator said. “We need to address the Postal Service’s massive overpayments to the older Civil Service Retirement System. We also need to make sure that the Postal Service has the resources it needs to meet its future retiree health care obligations.”

<b>Congress</b>

The White House proposals still require Congress to enact, with expectations that reforms will face a more difficult time in the Republican-controlled House of Representatives. Although the USPS overpayments have come from staff salaries and Postal Service revenues, rather than the taxpayer, some in Congress see handing back the money as effectively extending the federal deficit.

Senator Carper is currently preparing to re-introduce postal reform legislation into Congress, after similar proposals ran out of time last year.

He said yesterday that his “comprehensive” reforms would put the Postal Service back on a stronger financial footing.

Along with reforms to the pension and healthcare fund payments systems, the Carper legislation is also likely to include cost-cutting proposals, such as for the USPS to move to a five-day delivery week and be given a greater flexibility to close post offices..

“I hope my colleagues and the Administration will join me in pushing for this much needed reform so we can prevent the Postal Service from going broke by the end of the year,” said the Senator from Delaware.

<b>”Long road ahead”</b>

The American Postal Workers Union today welcomed the recognition from the White House concerning the “seriousness” of the situation for the USPS.

However, the union’s president Cliff Guffey said it would be a long road ahead in order to get the proposals through Congress.

“Unfortunately, the White House budget is simply a proposal,” Guffey noted. “The Republican majority in the House of Representatives will offer its own budget, which is expected to be very different.”