US Democrats propose 90-day delay on $5.5bn USPS payment
A group of Democrats in the US House of Representatives have introduced legislation seeking to give the US Postal Service a 90-day extension on its $5.5bn Retiree Health Benefits Fund payment due this month. They believe the stopgap measure would provide additional time for Congress to pass more comprehensive legislation to help the struggling USPS with its major financial problems.
House Oversight Committee Ranking Member Elijah Cummings was joined by Representatives Norm Dicks, Ranking Member on the Appropriations Committee, as well as postal subcommittee ranking member Stephen Lynch in pushing the proposals.
Other House Democrats supporting the legislation include José Serrano, Gerald Connolly, Eleanor Holmes Norton and Danny K. Davis.
“The Postal Service is one of our nation’s most trusted and reliable institutions,” said Cummings. “This short-term measure would give Congress an additional three months to consider ways to ensure that the Postal Service is profitable and competitive in the 21st century economy.”
In reality, the legislation would achieve little since the Postal Service is not intending to make the $5.5bn payment to the federal government anyway, as the Postmaster General Patrick Donahoe told the US Senate last week.
However, it would postpone the Postal Service going into default on its government payments, which could save some face.
Introducing their legislation today, the group of Democrats conceded that a significant part of the USPS financial troubles were caused by Congress back in 2006, when it decided that unlike any other federal agency, the Postal Service should pre-fund future retiree healthcare benefit liabilities.
They said the 2006 law, the Postal Accountability Enhancement Act, was inconsistent even with the private sector, where companies “typically” prepay 70% to 80% of their future retiree health care costs, not the 100% the US Postal Service is required to pre-fund.
USPS has already paid more than $42bn to the US Treasury toward future retiree healthcare costs – more than twice its current level of debt.
“The truth is that the Postal Service is facing its financial challenges today in part because Congress changed the law in 2006, in a way that places extremely burdensome pre-funded health care requirements on the USPS that no other agency or organization must meet,” said Representative Lynch.
“This measure will ensure that the Postal Service and Congress have additional time to work together on comprehensive legislation to improve the Postal Service’s long-term viability.”
Temporarily suspending the $5.5bn prepayment will not affect healthcare provided to USPS retirees, the Congressmen insisted. It will simply put back the payment deadline.
The proposals from the Democrats falls along the same lines as measures expected to come from the White House within its national deficit reduction package expected in the next few weeks.
Further legislation
Today’s announcement from the House Democrats also noted that in the coming weeks, they would be introducing further legislation seeking to increase USPS revenue and cut its operating costs.
Measures will propose allowing USPS to enter new lines of business, lease property, rightsize its workforce and adjust the benefits payment schedules.
The minority party in the House of Representatives, the Democrats would need to get the majority Republicans on side to have any hope of passing their proposals.
House Republican Oversight Committee chairman Darrell Issa, a leading figure on postal reform proposals at the moment along with subcommittee chairman Dennis Ross, said this morning that he wants to see 200,000 USPS workers retiring in order to right-size the Postal Service.
Speaking on a morning talk show on US television, he said the Postal Service was facing more than just a cash-flow problem, but stated his belief that it could still return to solvency.
