USPS opposes bill to restructure mail service

Bush administration seeks $3 billion prepaid health provision

The threat of a presidential veto could determine the content of a bill to restructure U.S. Postal Service operations for the first time in more than 30 years, according to USPS executives, who are now fighting the legislation.

Senior USPS officials had hoped to influence a more favorable Senate bill (S. 662) during eleventh-hour negotiations in late January. But they dropped their support when it appeared likely that President Bush would veto any final bill that failed to require the agency to prepay at least $3 billion a year for retirees’ health benefits.

Bush administration officials have insisted on the $3 billion prepayment provision to ensure that new legislation does not increase the administration’s budget deficit projections, said Richard Strasser, USPS executive vice president and chief financial officer, in a recent teleconference with reporters.

USPS wants to continue funding its retirees’ health benefits on a yearly basis. Prepaying $3 billion or more each year could force USPS to raise stamp prices as much as 20 percent in the near future, Strasser said. The President’s Commission on the U.S. Postal Service recommended in 2003 that USPS begin to prepay retiree health benefits as its finances permitted.

In withdrawing support for the bill, USPS and its governing board publicly denounced provisions that they said would make it impossible for the self-financed agency to maintain universal mail service and break even financially. Members of the U.S. Postal Service Board of Governors sent a letter to each senator asserting that the bill “would make it extremely difficult for the Postal Service to function in a modern, competitive environment.”

The size and complexity of the pending legislation — the result of years of debate and compromise — make it difficult for anyone to forecast all of its potential consequences. But USPS executives and some union leaders say the legislation lacks certain protections and retain too many provisions they oppose. The bills’ critics say no legislation is better than bad legislation.

With their various restrictions on generating new sources of revenue, including money from Internet-based services, the bills fail to give USPS the flexibility it will need to operate without massive future borrowing or sharp increases in postal rates, said Tom Day, USPS senior vice president for government relations.

The Senate bill grants a new Postal Regulatory Commission authority to override operational decisions that USPS makes about deploying automated processing equipment or awarding contracts, Day said.

Information technology is essential to USPS operations as a cost-cutting tool and as the basis for new fee-based services that officials hope will offset decreased mail revenue, USPS officials said. In fiscal 2000, USPS earned $1.50 on an average bundle of mail delivered to households and businesses. Last year, revenue from the average mail bundle dropped to $1.40, Strasser said.

The co-authors of the Senate bill, Susan Collins (R-Maine) and Thomas Carper (D-Del.), said they were troubled by USPS’ late defection. In a statement condemning opposition to the bill, Collins and Carper said their legislation would prevent steep increases in postage rates. “Nothing in the bill would lead to rate increases,” they wrote. The pending legislation includes a cap to keep USPS from raising rates each year by more than the Consumer Price Index.

Lawmakers and USPS square off on postal changesExecutives at the U.S. Postal Service and members of the USPS Board of Governors oppose pending legislation that would restructure USPS operations. The legislation has moved to a joint conference committee for final negotiations.

Here is what people on each side of the debate are saying:

  • USPS executives: The agency can do a better job of continuing its success in generating new revenue and controlling costs under existing laws than under the proposed legislation.
  • House and Senate lawmakers: The pending legislation will give USPS the new tools it needs to survive and thrive in the 21st century.
  • — Florence Olsen

    The Fed 100

    Save the date for 28th annual Federal 100 Awards Gala.

    Featured

    • computer network

      How Einstein changes the way government does business

      The Department of Commerce is revising its confidentiality agreement for statistical data survey respondents to reflect the fact that the Department of Homeland Security could see some of that data if it is captured by the Einstein system.

    • Defense Secretary Jim Mattis. Army photo by Monica King. Jan. 26, 2017.

      Mattis mulls consolidation in IT, cyber

      In a Feb. 17 memo, Defense Secretary Jim Mattis told senior leadership to establish teams to look for duplication across the armed services in business operations, including in IT and cybersecurity.

    • Image from Shutterstock.com

      DHS vague on rules for election aid, say states

      State election officials had more questions than answers after a Department of Homeland Security presentation on the designation of election systems as critical U.S. infrastructure.

    • Org Chart Stock Art - Shutterstock

      How the hiring freeze targets millennials

      The government desperately needs younger talent to replace an aging workforce, and experts say that a freeze on hiring doesn't help.

    • Shutterstock image: healthcare digital interface.

      VA moves ahead with homegrown scheduling IT

      The Department of Veterans Affairs will test an internally developed scheduling module at primary care sites nationwide to see if it's ready to service the entire agency.

    • Shutterstock images (honglouwawa & 0beron): Bitcoin image overlay replaced with a dollar sign on a hardware circuit.

      MGT Act poised for a comeback

      After missing in the last Congress, drafters of a bill to encourage cloud adoption are looking for a new plan.

    Reader comments

    Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

    Please type the letters/numbers you see above

    More from 1105 Public Sector Media Group