[Senate Report 111-203]
[From the U.S. Government Publishing Office]
111th Congress Report
2d Session SENATE 111-203 _______________________________________________________________________
Calendar No. 424
POSTAL SERVICE RETIREE HEALTH BENEFITS FUNDING REFORM ACT OF 2009
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 1507
together with
ADDITIONAL VIEWS
TO AMEND CHAPTER 89 OF TITLE 5, UNITED STATES CODE, TO REFORM POSTAL
SERVICE RETIREE HEALTH BENEFITS FUNDING, AND FOR OTHER PURPOSES
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
June 9, 2010.--Ordered to be printed
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Washington, DC 20402-0001
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri JOHN ENSIGN, Nevada
JON TESTER, Montana LINDSEY GRAHAM, South Carolina
ROLAND W. BURRIS, Illinois
EDWARD E. KAUFMAN, Delaware
Michael L. Alexander, Staff Director
Kevin J. Landy, Chief Counsel
Kenya N. Wiley, Counsel
John P. Kilvington, Staff Director, Subcommittee on Federal Financial
Management, Government Information, Federal Services, and International
Security
Brandon L. Milhorn, Minority Staff Director and Chief Counsel
Jennifer L. Tarr, Minority Counsel
Trina Driessnack Tyrer, Chief Clerk
C O N T E N T S
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
IV. Section-by-Section Analysis......................................5
V. Evaluation of Regulatory Impact..................................6
VI. Congressional Budget Office Estimate.............................6
VII. Changes in Existing Law Made by the Bill, as Reported...........14
VIII.Additional Views................................................17
Calendar No. 424
111th Congress Report
2d Session SENATE 111-203
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POSTAL SERVICE RETIREE HEALTH BENEFITS FUNDING REFORM ACT OF 2009
_______
June 9, 2010.--Ordered to be printed
_______
Mr. Lieberman, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 1507]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 1507) to amend
chapter 89 of title 5, United States Code, to reform Postal
Service retiree health benefits funding, and for other
purposes, having considered the same, reports favorably thereon
with amendments and recommends that the bill do pass.
I. Purpose and Summary
Over the last several years, the United States Postal
Service (Postal Service) has faced a significant financial
crisis due to its declining mail volume. S. 1507 seeks to help
alleviate that crisis by reducing the amount of money the
Postal Service is required to set aside now for retiree health
benefits it will not have to actually confer until a number of
years in the future.
In fiscal year 2008, the Postal Service handled 9.5 billion
fewer pieces of mail--4.5 percent less by total volume--than it
did the fiscal year before, leading to a net loss of $2.8
billion. In fiscal year 2009, the Postal Service's mail volume
decreased by an additional 25.6 billion pieces, and it posted
an annual net loss of approximately $3.8 billion.\1\ The Postal
Service would have lost even more in fiscal year 2009--$7.8
billion--had Congress not given the Postal Service permission
to reduce its payments to the Postal Service Retiree Health
Benefits Fund (the Fund) by $4 billion for the fiscal year.\2\
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\1\The Challenge to Deliver: Creating the 21st Century Postal
Service: U.S. Postal Service Annual Report (Fiscal Year 2009).
\2\Id.
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The Fund was established in 2006 by the Postal
Accountability and Enhancement Act (P.L. 109-435) to hold money
Congress required the Postal Service to put aside to pay for
the health benefits of future Postal Service retirees. Required
annual payments into the Fund range from $5.4 billion to $5.8
billion from fiscal years 2006 through 2016.\3\ The purpose of
S. 1507 is to adjust the Postal Service's payment schedule into
the Fund to provide it some financial relief in the next
several years.
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\3\P.L. 109-435.
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II. Background and Need for the Legislation
As a result of a Government Accountability Office (GAO)
inquiry in 2001,\4\ the Office of Personnel Management (OPM)
reviewed the Postal Service's liability and payments for the
pensions of Postal Service employees covered by the Civil
Service Retirement System (CSRS), the retirement system for
federal employees who started work prior to 1984. OPM
discovered that if the Postal Service continued making payments
according to CSRS's statutorily mandated schedule, the Postal
Service would end up over-funding its CSRS obligation by
between $71 billion and $103 billion.
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\4\United States Postal Service: Information on Retirement Plans,
GAO-02-170 (Washington, DC: December 2001).
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In response to OPM's finding, Congress passed and President
Bush signed P.L. 108-18 in April 2003. That bill eliminated the
Postal Service's annual payment into the CSRS trust fund and
required the Postal Service to pay off what was believed to be
its remaining $5 billion CSRS pension liability over a period
of 40 years.
P.L. 108-18, however, did not give the Postal Service
unfettered access to the savings generated by this change.
Rather, P.L. 108-18 directed the Postal Service to use the
difference between the old statutory CSRS payments and the new
payments made under the 40-year payment schedule in fiscal
years 2003 and 2004 to pay down its debt and maintain rate
stability. It then required the Postal Service to deposit
savings generated after fiscal year 2004 into an escrow
account. The 2003 law left for future legislation to decide the
ultimate use of the funds the escrow account contained.
P.L. 108-18 also required the Postal Service to report to
Congress on how the Postal Service proposed to use the savings
in 2006 and beyond. The law required the Postal Service, in
preparing its proposal, to consider whether, and to what
extent, future savings should be used to address debt
repayment; prefunding of post-retirement health care benefits
for current and former postal employees; productivity and cost-
saving capital investments; delaying or moderating increases in
postal rates; and any other matter.
In September 2003, the Postal Service provided two options
to Congress for how the escrow funds should be used. Both
options contemplated that the Postal Service would prefund
health benefits for future retirees.\5\ At the time Congress
was considering these proposals, the amount of the Postal
Service's unfunded obligations for the health benefits of its
future retirees was approximately $50 billion.
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\5\Postal Service Proposal: Use of Savings For Fiscal years After
2005, P.L. 108-18. September 30, 2003. See also Postal Pension Funding
Reform: Issues Related to the Postal Service's Proposed Use of Pension
Savings, GAO-04-238, pages 3-4 (Washington, DC: November 2003); CRS
Report for Congress: Pension Issues Cloud Postal Reform Debate, Order
Code RL32346, page 6 (Washington, DC: January 2006).
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The following Congress revisited the issue in the Postal
Accountability and Enhancement Act (P.L. 109-435). In response
to the Postal Service's recommendations, the 2006 law
established the Fund, which will be used to pay the health
benefits of future postal retirees. Following an initial 10-
year period of annual payments ranging from $5.4 billion to
$5.8 billion to reduce the portion of benefits owed to future
retirees that is currently unfunded, any remaining liability in
the fund will be amortized over a 40-year period. The payments,
deposited in the Fund, are in addition to the payments the
Postal Service makes throughout the year to OPM to cover its
share of current retirees' health care premiums, which totaled
about $2 billion in fiscal year 2009.
The Postal Service indicated to Congress in 2006 that it
would be able to make the annual payments required under the
2006 law and that passage of P.L 109-435 would put the Postal
Service on ``firm financial footing for the future.''\6\ The
Postal Service's Inspector General, however, recently called
the payment schedule included in P.L. 109-435 ``unusual'' in
that the annual payments over the first ten years are not based
on an amortization of the Postal Service's unfunded future
retiree health liabilities or the amount in the Fund.\7\
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\6\New Postal Law: A Message from the Postmaster General, PCC
Insider, December 20, 2006.
\7\U.S. Postal Service, Office of Inspector General, Financial
Management Advisory Report, ESS-MA-09-001, p. 17, July 22, 2009.
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Facing potentially significant financial losses for fiscal
year 2009 and wishing to access the funds it has been required
to set aside in the Fund, the Postal Service proposed
legislation that would have permitted payments to OPM for
health benefits due to its current retirees to come from the
Fund rather than as a direct payment from the Postal Service.
Due to significant mail volume decline, which the Postal
Service attributes to the length and severity of the recession
and the continued electronic diversion of what in the past has
gone through the mail, the level of relief that would be
provided by the enactment of this proposal may no longer be
enough to get the Postal Service through the next few fiscal
years.
At a hearing last year before the Committee's Subcommittee
on Federal Financial Management, Government Information,
Federal Services, and International Security, Postmaster
General John Potter highlighted the severity of the Postal
Service's financial problems.\8\ He pointed out that the
economic slowdown that the country as a whole has faced has
accelerated the diversion of hard-copy mail to other forms of
communication.\9\ He projected a year-end loss of ``at least''
$7 billion. He also said that if the Postal Service were to
make the full $5.4 billion retiree health pre-funding payment
on September 30, 2009, as scheduled, the Postal Service would
likely run out of cash. As a result, he indicated that the
Postal Service would not be able to make that payment.\10\ On
June 18, Postmaster General John Potter and Postal Service
Board of Governors Chairman Carolyn Gallagher sent a letter to
Congress stating that they had informed the Office of
Management and Budget, the Treasury Department, the
Congressional leadership and members of this Committee and the
House Oversight and Government Reform Committee that the Postal
Service did not plan to make the full payment.
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\8\Statement of John E. Potter, Postmaster General, U.S. Postal
Service, (hereinafter ``Potter Statement''), for the Hearing on ``The
U.S. Postal Service in Crisis'' Senate Homeland Security and
Governmental Affairs Subcommittee on Federal Financial Management,
Government Information, Federal Services, and International Security:
August 6, 2009 (hereinafter ``August 6, 2009 Hearing'').
\9\See Potter Statement at August 6, 2009 Hearing.
\10\See Id.
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The fiscal year 2010 Legislative Branch Appropriations Act,
signed into law by President Obama on September 30, 2009,
contained language reducing the Postal Service's fiscal year
2009 retiree health pre-funding payment from $5.4 billion to
$1.4 billion, an amount the Postal Service indicated it could
afford to pay.
S. 1507 is intended to address these ongoing problems on a
longer term basis. It would reduce the size of the Postal
Service's retiree health pre-funding payments in fiscal years
2010, 2011 and 2012. The legislation would also require OPM to
determine any additional payment the Postal Service must make
into the Fund based on the Postal Service's expected
obligations while increasing the Postal Service's total
payments in fiscal years 2015, 2016, 2017, 2018, and 2019.
These provisions are intended to insure that the Postal
Service's annual payments keep up with changes in its retiree
health obligations. It would also require that premium payments
for current postal retirees be paid out of the Fund. Finally,
the bill would increase the Postal Service's annual borrowing
limit for fiscal years 2009 and 2010 from $3 billion to $5
billion. The financial troubles facing the Postal Service are
so severe, however, that postal management will need to make
additional changes at the Postal Service beyond those included
in the bill.
III. Legislative History
S. 1507 was introduced by Senator Carper on July 23, 2009,
and referred to the Committee. It was then reported to the full
Senate favorably by a roll call vote of 11-1 on July 30, 2009.
Chairman Lieberman, Senators Levin, Carper, Pryor, Landrieu,
McCaskill, Tester, Burris, and Bennet, Ranking Minority Member
Collins, and Senator Graham voted ``yea.'' Senator Akaka voted
``nay.'' Four amendments were adopted during the Committee's
consideration of the bill:
A Collins amendment requiring that a report
authorized in section 710(a) of the P.L. 109-435 on the future
business model of the Postal Service currently due in 2011 be
completed by GAO by March 2010 was adopted by voice vote.
Senators Lieberman, Akaka, Carper, Pryor, Landrieu, McCaskill,
Burris, Collins, Coburn and Voinovich were present.
A Collins amendment modifying the emergency
borrowing provisions in the bill so that any additional
borrowing the Postal Service does in fiscal years 2009 and 2010
is kept under its $15 billion debt ceiling was approved by
voice vote. Senators Lieberman, Akaka, Carper, Pryor, Landrieu,
McCaskill, Burris, Collins, Coburn and Voinovich were present.
A Coburn amendment requiring the members of
arbitration boards impaneled to decide disputes between the
Postal Service and its bargaining-unit employees to consider
the financial condition of the Postal Service in making
decisions about collective bargaining agreements was approved
by voice vote. Senators Lieberman, Akaka, Carper, McCaskill,
Burris, Collins, Coburn and Voinovich were present. Senators
Akaka, McCaskill and Burris asked that their votes be recorded
as ``nay.''
A Coburn amendment prohibiting the Postal Service
from awarding bonuses to Postal Service executives for work
performed in years in which the Postal Service had a year-end
net loss was approved by voice vote. Senators Lieberman, Akaka,
Carper, McCaskill, Burris, Collins, and Coburn were present.
IV. Section-by-Section Analysis
Section 1. Short title
Section 1 establishes the short title of S. 1507 as the
``Postal Service Retiree Health Benefits Funding Act of 2009.''
Section 2. Government contributions
Section 2 removes the requirement in current law that the
Postal Service directly pay the employer share of current
postal retirees' health care premiums. Under the language in
this section, these obligations would be paid out of the Fund.
Section 3. Postal Service Retiree Health Benefits Fund
Section 3 strikes the existing schedule of payments the
Postal Service is required to make into the Fund and replaces
it with a new schedule. The new schedule would require ten
years of payments into the Fund. Those payments would feature
two components. The bill specifies the amount of the first
component, which would total $1.7 billion in fiscal year 2009
and grow to $5.3 billion in fiscal year 2019. The amount of the
second component would be based on a valuation made by the
Office of Personnel Management each year of the Postal
Service's unfunded retiree health obligation. Whatever remains
of the obligation in fiscal year 2020 would be amortized over a
period of 40 years.
Section 4. Temporary increase to postal borrowing limitations
Section 4(a) would increase the Postal Service's annual
borrowing limit for fiscal year 2009 and fiscal year 2010 from
$3 billion to $5 billion.
Section 4(b) would require that any additional borrowing
above $3 billion that the Postal Service makes in fiscal year
2009 and fiscal year 2010 remain within the Postal Service's
overall $15 billion borrowing limit and be paid back by the end
of fiscal year 2019.
Section 5. Consideration of Postal Service financial condition
Section 5 would require the members of arbitration boards
impaneled to decide disputes between the Postal Service and its
bargaining-unit employees to consider the financial condition
of the Postal Service in making decisions about collective
bargaining agreements.
Section 6. Assessment of future business model of the Postal Service
Section 6 would require that a report authorized in section
710(a) of the P.L. 109-435 on the future business model of the
Postal Service be completed by GAO by March 2010. It is
currently due in 2011.
Section 7. Prohibition on bonuses
Section 7 would prohibit the Postal Service from awarding
bonuses to Postal Service executives for work performed in
years in which the Postal Service had a year-end net loss.
Section 8. Effective dates and application
Section 8 states that any payments the Postal Service has
paid during fiscal year 2009 by the date of enactment of S.
1507 that it would not be required to pay under the amendments
made in the bill shall be credited against the payments due on
September 30, 2009.
V. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of S. 1507. The Congressional
Budget Office states that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandate Reform Act and would impose no costs on state,
local, or tribal governments, or private entities. The
enactment of this legislation will not have significant
regulatory impact.
VI. Congressional Budget Office Cost Estimate
September 14, 2009.
Hon. Joseph I. Lieberman,
Chairman, Committee on Homeland Security and Governmental Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1507, the Postal
Service Retiree Health Benefits Funding Reform Act of 2009.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark
Grabowicz.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
S. 1507--Postal Service Retiree Health Benefits Funding Reform Act of
2009
Summary: S. 1507 would change the payments that the United
States Postal Service (USPS) makes for retirees' health
insurance premiums. In total, the bill would decrease those
payments over the 2009-2014 period and increase the payments in
subsequent years. In particular, the bill would:
Authorize the Postal Service to make
payments for retirees' health insurance premiums from
the Postal Service Retiree Health Benefits Fund
(PSRHBF) for fiscal years 2009 through 2016;
Change the amounts that the Postal Service
is required to pay into the PSRHBF over the 2009-2019
period; and
Direct the Postal Service, over the 2009-
2019 period, to make estimated annual payments to the
PSRHBF to prefund the health care costs of future
retirees.
In addition, S. 1507 would raise the borrowing limitation
of the Postal Service for fiscal years 2009 and 2010 and make
other changes to the laws that govern the agency's operations.
CBO estimates that enacting the bill would result in on-
budget costs totaling about $4.8 billion and off-budget savings
of $2.1 billion over the 2009-2019 period. (USPS cash flows are
recorded in the Postal Service Fund and are classified as off-
budget, while the PSRHBF is an on-budget account.)
Combining those effects, CBO estimates that the net cost to
the unified budget of enacting S. 1507 would be $2.8 billion
over both the 2010-2019 and 2009-2014 periods. All of those
effects reflect changes in direct spending. Enacting S. 1507
would not affect revenues.
S. 1507 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 1507 is shown in Table 1. The costs of
this legislation fall within budget function 370 (commerce and
housing credit).
TABLE 1--ESTIMATED COSTS OF S. 1507
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By fiscal year, in millions of dollars--
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2009- 2009-
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2014 2019
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CHANGES IN DIRECT SPENDINGOn-budget Effects:\1\
Estimated Budget Authority................... 2,400 2,500 1,105 465 332 266 -23 -92 -548 -712 -845 7,068 4,848
Estimated Outlays............................ 2,400 2,500 1,105 465 332 266 -23 -92 -548 -712 -845 7,068 4,848
Off-budget Effects:\1\
Estimated Budget Authority................... -2,400 -1,250 -553 -47 -33 -27 23 92 548 712 845 -4,309 -2,089
Estimated Outlays............................ -2,400 -1,250 -553 -47 -33 -27 23 92 548 712 845 -4,309 -2,089
Total Unified Budget Effects:
Estimated Budget Authority................... 0 1,250 553 419 299 239 0 0 0 0 0 2,759 2,759
Estimated Outlays............................ 0 1,250 553 419 299 239 0 0 0 0 0 2,759 2,759
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\1\The Postal Service has stated that it will not be able to make the payment that it is required to make to the PSRHBF in 2009. If the full 2009 payment were not made, the estimated on-budget
and off-budget effects of the legislation would change, but CBO estimates that the total unified effects for 2009 would still be zero.
Note: Positive numbers indicate increases in costs; negative numbers indicate reductions in costs.
Basis of estimate: CBO assumes that S. 1507 will be enacted
near the end of fiscal year 2009. Enacting the bill would
decrease Postal Service payments for retirees' health insurance
premiums over the 2009-2014 period and increase those payments
for subsequent years. The bill would affect outlays of the off-
budget Postal Service Fund and the on-budget PSRHBF. CBO
estimates that the net cost to the unified budget would total
about $2.8 billion over the 2010-2019 period.
Postal Service retiree health benefits under current law
The Postal Service makes two annual payments over the 2009-
2016 period for retirees' health insurance premiums. (USPS
spending on those activities is classified as off-budget.) The
agency makes a direct payment to the on-budget Federal
Employees Health Benefits (FEHB) fund for current retirees. CBO
estimates that this payment will be about $2.0 billion in 2009
and $2.2 billion in 2010, rising to $4.1 billion by 2016.
In addition, over the 2009-2016 period, the Postal Service
is required to make specified annual payments that range from
$5.4 billion to $5.8 billion to the PSRHBF, an on-budget
account established by the Postal Accountability and
Enhancement Act (Public Law 109-435) to prefund future
retirees' health benefits. Under current law, funds in the
PSRHBF may not be expended for retirees' health costs until
fiscal year 2017.
Beginning in 2017, the Postal Service will make estimated
annual payments to the PSRHBF to cover the ``normal costs'' of
providing health benefits to future retirees. Those payments
will be equal to the annual increase in retiree health care
liabilities attributable to current employees. In addition, the
agency will make annual payments amortized over 40 years to
liquidate the ``unfunded liability'' for retirees' health
benefits. The unfunded liability is the total liability accrued
to date for retirees' health benefits minus the PSRHBF balance,
that is, the amount that has not been set aside to cover future
liabilities.
Table 2 displays Postal Service payments for retirees'
health benefits under current law, and payments for retirees'
health benefits and other changes in USPS costs that would
result if S. 1507 is enacted.
TABLE 2--POSTAL SERVICE PAYMENTS FOR RETIREE HEALTH BENEFITS--OFF-BUDGET COSTS
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By fiscal year, in millions of dollars--
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009-2019
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Current Law:.................
Estimated Payments to 2,000 2,200 2,505 2,765 3,132 3,466 3,777 4,108 0 0 0 23,953
FEHB....................
Specified Payments to 5,400 5,500 5,500 5,600 5,600 5,700 5,700 5,800 0 0 0 44,800
PSRHBF1.................
Estimated Payments for 0 0 0 0 0 0 0 0 6,230 6,666 7,133 20,029
Normal Costs2...........
Estimated Amortization 0 0 0 0 0 0 0 0 3,822 3,822 3,822 11,466
Payments................
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Total................ 7,400 7,700 8,005 8,365 8,732 9,166 9,477 9,808 10,052 10,488 10,955 100,248
S. 1507:
Payments to PSRHBF....... 1,700 1,700 3,100 3,900 4,100 4,300 4,500 4,700 4,900 5,100 5,300 43,300
Estimated Payment for 3,300 3,500 3,800 4,000 4,300 4,600 5,000 5,300 5,700 6,100 6,500 52,100
Normal Costs3...........
Estimated Impact on All 0 1,250 553 419 299 239 0 0 0 0 0 2,759
Other USPS Costs4.......
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Total................ 5,000 6,450 7,453 8,319 8,699 9,139 9,500 10,000 10,600 11,200 11,800 98,159
Change in Off-Budget Costs... -2,400 -1,250 -553 -47 -33 -27 23 92 548 712 845 -2,089
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\1\The Postal Service has stated that it will not be able to make the full payment of $5.4 billion required in 2009. CBO has no basis for estimating the
amount of any shortfall. However, anything less than a full payment would affect the 2009 change in off-budget costs, but CBO estimates that the total
unified budget effect for 2009 would still be zero.
\2\These payments are equal to the annual increase in retiree health care liabilities attributable to current employees.
\3\These costs are based on information provided by the Office of Personnel Management.
\4\Total USPS expenses in 2008 were nearly $80 billion (on a cash basis), including spending on personnel, transportation, and facilities. If health
care expenses are reduced by S. 1507, CBO expects net spending on these activities to increase.
Note: FEHB = Federal Employees Health Benefits fund; PSRHBF = Postal Service Retiree Health Benefits Fund.
Postal Service retiree health benefits proposed under S. 1507
The bill would authorize the USPS, over the 2009-2016
period, to make payments to the FEHB fund for current retirees'
health insurance premiums from the PSRHBF. Under current law,
funds in the PSRHBF are not available for spending until fiscal
year 2017, and current retirees' health insurance premiums are
paid for by USPS from sales of postage and other products.
S. 1507 also would replace the current specified payments
into the PSRHBF for fiscal years 2009 through 2016 with lower
payments that range from $1.7 billion in 2009 to $5.3 billion
in 2019.
In addition, from 2009 through 2019, the bill would direct
the Postal Service to make estimated annual payments to the
PSRHBF to cover the normal costs of providing health benefits
to future retirees. The agency would make estimated 40-year
amortization payments toward the unfunded liability for
retirees' health benefits beginning in 2020 instead of 2017.
Table 3 shows cash flows of the PSRHBF under current law
and under the bill.
TABLE 3--POSTAL SERVICE RETIREE HEALTH BENEFITS FUND (PSRHBF) CASH FLOWS--ON-BUDGET COSTS
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By fiscal year, in millions of dollars--
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009-2019
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Current Law:...................................................
Specified Payment from USPS\1\............................. -5,400 -5,500 -5,500 -5,600 -5,600 -5,700 -5,700 -5,800 0 0 0 -44,800
Estimated Normal Payments.................................. 0 0 0 0 0 0 0 0 -6,230 -6,666 -7,133 -20,029
Estimated Amortization Payments............................ 0 0 0 0 0 0 0 0 -3,822 -3,822 -3,822 -11,466
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Total.................................................. -5,400 -5,500 -5,500 -5,600 -5,600 -5,700 -5,700 -5,800 -10,052 -10,488 -10,955 -76,295
S. 1507:
Payment to FEHB............................................ 2,000 2,200 2,505 2,765 3,132 3,466 3,777 4,108 0 0 0 23,953
Specified Payments from USPS............................... -1,700 -1,700 -3,100 -3,900 -4,100 -4,300 -4,500 -4,700 -4,900 -5,100 -5,300 -43,300
Estimated Normal Payments.................................. -3,300 -3,500 -3,800 -4,000 -4,300 -4,600 -5,000 -5,300 -5,700 -6,100 -6,500 -52,100
Estimated Amortization Payments............................ 0 0 0 0 0 0 0 0 0 0 0 0
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Total.................................................. -3,000 -3,000 -4,395 -5,135 -5,268 -5,434 -5,723 -5,892 -10,600 -11,200 -11,800 -71,447
Change in On-Budget Costs...................................... 2,400 2,500 1,105 465 332 266 -23 -92 -548 -712 -845 4,848
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\1\The Postal Service has stated that it will not be able to make the full payment of $5.4 billion required in 2009. CBO has no basis for estimating the amount of any shortfall. However,
anything less than a full payment would affect the 2009 change in on-budget costs, but CBO estimates that the total unified budget effect for 2009 would still be zero.
Note: USPS = United States Postal Service; FEHB = Federal Employees Health Benefits fund.
Reduced spending from USPS Fund (Off-budget account)
The bill's changes in payments for retirees' health
insurance premiums would lower costs of the Postal Service for
those activities over the 2009-2014 period and raise the
agency's costs in subsequent years. CBO also expects that
lowering health care expenses would lead to an increase in
other USPS costs totaling $2.8 billion over the 2009-2019
period. We estimate that enacting S. 1507 would reduce net USPS
spending by $2.1 billion over the 10-year period--such spending
is off-budget.
We expect that lowering the health care expenses of the
Postal Service Fund by about $2 billion annually would lead the
agency to modify its efforts to reduce other spending in future
years. Faced with an imbalance of receipts from postal
customers and operational costs, the Postal Service has made
significant efforts to reduce spending in recent years. We
expect that they will continue such efforts under current law.
Early in 2009, the Postal Service announced plans to cut
spending by $5.9 billion over the 2009-2010 period. Just a few
months later in response to worsening financial conditions, the
agency accelerated the plan to cut $5.9 billion in 2009 alone.
More recently, the Postal Service has announced the possibility
of closing post offices, laying off employees, and making other
reductions in service--cost-cutting measures that were not
publicized earlier in 2009. CBO expects that by eliminating a
$2 billion health care expense, enacting the bill would lead
the agency to alter its cost-reduction program by cutting
spending less aggressively than it would without the
legislation. Consequently, CBO estimates that enacting this
legislation would increase other postal expenses relative to
current law.
CBO estimates that there would be no increase in net USPS
outlays in 2009 because nearly all of the fiscal year will have
elapsed by the time the legislation is enacted. We estimate
that the increase in net USPS outlays in 2010 and 2011 would be
about half of the reduction in required health care payments--
about $1.2 billion in 2010 and $550 million in 2011. In fiscal
years 2012 through 2014, we expect the increase in net USPS
outlays to be nearly equivalent to the reduction in required
payments as CBO expects that the agency will have its revenues
and expenses more nearly aligned by that time.
Increased spending from PSRHBF (On-budget account)
CBO estimates that enacting S. 1507 would increase on-
budget direct spending by $2.4 billion in 2009 and by about
$4.8 billion over the 2009-2019 period. Those costs result from
changes in cash flows of the PSRHBF as displayed in Table 3. S.
1507 would not affect the net cash flows of the FEHB fund
(although under the bill's provisions, the payments to this
fund would be made out of the PSRHBF rather than the Postal
Service Fund).
CBO estimates that the payments from the PSRHBF would range
from $2 billion in 2009 to $4.1 billion in 2016. In addition,
over the 2009-2019 period, the bill would change the specified
payments from the Postal Service Fund into the PRSHBF. As shown
in Table 3, the current annual payments, ranging from $5.4
billion to $5.8 billion over the 2009-2016 period, would under
the bill range from $1.7 billion to $5.3 billion over the 2009-
2019 period. Finally, S. 1507 would direct the Postal Service
starting in 2009 to make estimated annual payments to the
PSRHBF to cover the costs of providing health benefits to
future retirees. Currently, payments for those so-called
``normal costs'' will not be made until 2017. CBO estimates
that those payments would grow from $3.3 billion in 2009 to
$6.5 billion by 2019. Under the bill, the agency also would
make estimated 40-year amortization payments toward the
unfunded liability for retirees' health benefits beginning in
2020 rather than in 2017 under current law.
CBO estimates that S. 1507 would increase the net spending
from the PSRHBF for each of fiscal years 2009 through 2014 and
decrease spending in subsequent years; over the 10-year period
net spending would increase by $4.8 billion.
Net cost under S. 1507 (Unified budget)
CBO estimates that enacting S. 1507 would increase costs to
the unified budget by about $2.8 billion over the 2009-2019
period. We estimate that the bill would increase on-budget
spending from the PSRHBF by $4.8 billion over the 2009-2019
period. Those costs would be partially offset by decreased off-
budget spending from the Postal Service Fund of $2.1 billion
over the 10-year period.
Other provisions
S. 1507 would raise the Postal Service's debt limit from $3
billion to $5 billion for fiscal years 2009 and 2010. Because
the legislation would lower USPS costs in those years, CBO does
not expect the agency to use the additional authority. The bill
also would preclude the Postal Service from paying bonuses to
certain senior employees for years in which the agency lost
money. Based on the total amount of such bonus payments in
recent years, CBO estimates that savings would not be
significant in any year.
Intergovernmental and private-sector mandates: S. 1507
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Federal costs: Mark Grabowicz and
Kirstin Nelson; Impact on state, local, and tribal governments:
Elizabeth Cove Delisle; Impact on the private sector: Paige
Piper/Bach.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
VII. Changes to Existing Law Made by the Bill, as Reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
S. 1507 as reported are shown as follows (existing law proposed
to be omitted is enclosed in brackets, new matter is printed in
italic, and existing law in which no change is proposed is
shown in roman):
Title: To amend chapter 89 of title 5 to reform Postal Service retiree
health benefits funding, and for other purposes
TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III. EMPLOYEES
Subpart G. Insurance and Annuities
CHAPTER 89. HEALTH INSURANCE
SECTION 8909. EMPLOYEES HEALTH BENEFIT FUND
POSTAL SERVICE RETIREE HEALTH BENEFIT FUND
8909a. Postal Service Retiree Health [Benefit] Benefits Fund
* * * * * * *
(2)(B) Not later than June 30, [2017] 2019, the
Office shall compute, and by June 30 of each succeeding
year shall recompute, a schedule including a series of
annual installments which provide for the liquidation
of any liability or surplus by September 30, [2056]
2059, or within 15 years, whichever is later, of the
net present value determined under subparagraph (A),
including interest at the rate used in that
computation.
[(3)(A) The United States Postal Service shall pay
into such Fund--
[(i) $5,400,000,000, not later than September
30, 2007;
[(ii) $5,600,000,000, not later than
September 30, 2008;
[(iii) $5,400,000,000, not later than
September 30, 2009;
[(iv) $5,500,000,000, not later than
September 30, 2010;
[(v) $5,500,000,000, not later than September
30, 2011;
[(vi) $5,600,000,000, not later than
September 30, 2012;
[(vii) $5,600,000,000, not later than
September 30, 2013;
[(viii) $5,700,000,000, not later than
September 30, 2014;
[(ix) $5,700,000,000, not later than
September 30, 2015; and
[(x) $5,800,000,000, not later than September
30, 2016.]
(3)(A) The United States Postal Service shall pay
into such Fund--
(i) $5,400,000,000, not later than September
30, 2007;
(ii) $5,600,000,000, not later than September
30, 2008;
(iii) $1,700,000,000, not later than
September 30, 2009;
(iv) $1,700,000,000, not later than September
30, 2010;
(v) $3,100,000,000, not later than September
30, 2011;
(vi) $3,900,000,000, not later than September
30, 2012;
(vii) $4,100,000,000, not later than
September 30, 2013;
(viii) $4,300,000,000, not later than
September 30, 2014;
(ix) $4,500,000,000, not later than September
30, 2015;
(x) $4,700,000,000, not later than September
30, 2016.
(xi) $4,900,000,000, not later than September
30, 2017
(xii) $5,100,000,000, not later than
September 30, 2018; and
(xiii) $5,300,000,000, not later than
September 30, 2019.
(B) Not later than September 30, 2009, and by
September 30 of each succeeding year through 2019, the
United States Postal Service shall pay into such Fund
the net present value computed under paragraph (1).
(C) Not later than September 30, 2020, and by
September 30 of each succeeding year, the United States
Postal Service shall pay into such Fund the sum of--
(i) the net present value computed under
paragraph (1); and
(ii) any annual installment computed under
paragraph (2)(B).
SEC. 4. TEMPORARY INCREASE TO POSTAL SERVICE BORROWING LIMITATIONS.
(a) In General.--For fiscal years 2009 and 2010, section
2005(a) of title 39, United States Code, shall be applied by
substituting ``$5,000,000,000'' for the limitation specified in
paragraph (1).
(b) Repayment and Limitation on Outstanding Debt.--Any
amount borrowed under the increase in borrowing authority
provided under subsection (a) of this section shall be repaid
by the Postal Service to the United States Treasury by not
later than the end of fiscal year 2019. The Postal Service's
total outstanding debt may not exceed the maximum amount
allowable under section 2005(a)(2) of title 39, United States
Code.
SEC. 5. CONSIDERATION OF POSTAL SERVICE FINANCIAL CONDITION.
Section 1207(c)(2) of title 39, United States Code, is
amended by inserting ``The arbitration board shall consider the
financial condition of the Postal Service in making any
decision.'' after the first sentence.
SEC. 6. ASSESSMENT OF FUTURE BUSINESS MODEL OF THE POSTAL SERVICE.
Section 710(a) of the Postal Accountability and Enhancement
Act (Public Law 109-435; 120 Stat. 3247) is amended by striking
the first and second sentences and inserting ``The Comptroller
General of the United States shall prepare and submit to the
President and Congress a report that evaluates the options and
strategies for the long-term structural and operational reforms
of the United States Postal Service necessary to achieve
financial stability and long-term fiscal viability. The final
report required by this section shall be submitted by March 31,
2010.
SEC. 7. PROHIBITION ON BONUSES.
Section 3686 of title 39, United States Code, is amended--
(1) by redesignating subsection (e) as subsection
(f); and
(2) by inserting after subsection (d) the following:
``(e) Prohibition on Bonuses.--Notwithstanding any
provision of this section, including subsection (c), any bonus
under this section--
``(1) subject to paragraph (2), shall be paid on
October 1 following the date such bonus would have
otherwise been paid if not for this subsection; and
``(2) shall not be paid if the Postal Service had a
year-end net loss for the fiscal year preceding that
October 1.''.
VIII. Additional Views
ADDITIONAL VIEWS OF SENATOR SUSAN M. COLLINS
It has been slightly more than three years since enactment
of the Postal Accountability and Enhancement Act of 2006
(PAEA).\1\ Given that span of time and the authorities provided
in the Act, it is frustrating that the United States Postal
Service (USPS) has failed to take the steps needed to
fundamentally reform its operations and secure a stronger
fiscal footing. Although the struggling economy has contributed
to USPS's poor financial state, it has exacerbated the
situation by failing to take advantage of the revenue-
generating flexibilities afforded in the PAEA.
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\1\Pub. L. 109-435.
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As Congress considers USPS's latest request for relief, it
is appropriate to consider the most recent history in this
saga. Every three years the USPS has come to Congress for
financial relief in exchange for promises of future
profitability. Regrettably, the era of sustained profitability
has never materialized.
Nine years ago, in 2001, the Government Accountability
Office (GAO) first placed USPS on its ``high-risk list''
because it faced formidable financial, operational, and human
capital challenges that threatened its long-term viability.\2\
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\2\GAO-07-310.
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In 2003, Congress passed postal reform legislation that
reduced USPS's pension costs by approximately $9 billion from
fiscal year 2003 to 2005.\3\
---------------------------------------------------------------------------
\3\Pub. L. 108-18.
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In 2006, the PAEA relieved USPS of a $27 billion financial
liability, primarily by transferring obligations for the
retirement benefits of its employees with prior military
service to the Treasury Department.\4\ In addition, based on
USPS's own recommendation, Congress established a ``Postal
Service Retiree Health Benefits Fund'' (Fund) so that USPS
could address one of its major operating costs--post-retirement
health benefits for employees and retirees.\5\ When Congress
was considering the PAEA, the unfunded liability associated
with these post-retirement health benefits was estimated to be
between $47 billion and $57 billion. To pay down these
substantial liabilities, PAEA requires USPS to prefund the
benefits through annual payments into the Fund.\6\ With USPS's
support, Congress adopted this fiscally responsible payment
stream to significantly reduce these unfunded obligations.
---------------------------------------------------------------------------
\4\Pub. L. 109-435.
\5\Postal Service Proposal: Use of Savings for Fiscal Years After
2005, P.L. 108-18. September 30, 2003. See also Postal Pension Funding
Reform: Issues Related to the Postal Service's Proposed Use of Pension
Savings, GAO-04-238, pages 3-4 (Washington, DC: November 2003); CRS
Report for Congress: Pension Issues Cloud Postal Reform Debate, Order
Code RL32346, page 6 (Washington, DC: January 2006).
\6\Pub. L. 109-435.
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After enactment of the PAEA, GAO removed USPS from its
``high-risk'' list in January 2007, noting that the new postal
reform law gave USPS additional pricing flexibility, allowed it
to retain earnings, and provided additional mechanisms to
address continuing challenges related to USPS's increasingly
competitive business environment.\7\
---------------------------------------------------------------------------
\7\GAO-07-310.
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In 2009, with USPS once again in dire fiscal straights, the
Postmaster General returned to Congress seeking legislative
relief from obligations to fund future retiree health benefits,
after making only two full payments into the Fund. At the
Postmaster General's request, Congress acted to reduce by $4
billion the annual retiree health benefits payment that was due
to the Fund. I reluctantly supported this reduction because
USPS simply could not have made the full payment and was at
risk of not meeting its payroll obligations.
The Postmaster General's request to Congress for relief
from its payments for future retiree health benefits is just
the most recent in a long history of USPS requests for
financial assistance in exchange for the promise of becoming
financially solvent--some day.
With the most recent proposal to modify the PAEA payments
for future retiree health benefits, American taxpayers have
been asked to shoulder additional risk to stem USPS's flow of
red ink. Congress must break this pattern if we expect USPS to
continue to provide the crucial services that form the linchpin
of a $900 billion mailing industry that employs close to nine
million people.
The Postal Service Retiree Health Benefits Funding Reform
Act of 2009 would restructure the Fund based on a proposal that
was sent hastily from the Administration to Congress last year.
There are two significant problems with the adjusted payment
schedule set forth in this legislation: (1) GAO estimates that
it would increase USPS's unfunded liability for future retiree
health benefits by more than $4 billion by the end of fiscal
year 2019 and (2) it would require USPS to make much steeper
payments beginning in 2015 than under current law, payments
that the Postal Service is very unlikely to be able to handle.
According to the Office of Personnel Management (OPM) and
GAO, the payment stream established in the PAEA would reduce
USPS's unfunded liabilities for future retiree health benefits
to $39.2 billion by 2017. This legislation, however, would
reduce USPS's payments in the next several years, thereby
increasing the USPS's unfunded liability for these obligations
by more than $4 billion by the end of fiscal year 2019
(compared to current law).
The USPS does not show any signs of changing its financial
condition enough to be prepared to make the increasingly steep
payments this legislation would mandate after 2015. In fiscal
year 2009, USPS was only able to pay $1.4 billion into the
Fund--and only after Congress provided $4 billion in relief
from the $5.4 billion payment required by the PAEA. If USPS was
unable to make a $5.4 billion payment in fiscal year 2009, it
is unclear how USPS could make the far greater payments that
the legislation would require in the future, including a
payment as high as $11.8 billion. Indeed, given the likelihood
that USPS would not be able to make these high payments and
would need to seek additional relief in the future, this
legislation undoubtedly would further increase the amount of
the USPS's unfunded liabilities for future retiree health
benefits.
To address both of these concerns, I offered an alternative
that would have provided USPS some limited initial relief from
the PAEA payment stream but also would have limited the
increase in future year payments to the Fund. GAO estimated
that this approach would only increase the unfunded liability
related to these benefits by approximately $500 million dollars
at the end of the 10-year period covered by the bill (compared
to current law)--a stark contrast to the $4 billion increase in
the underlying bill. Moreover, because the annual payments
would increase at a slower rate, USPS would be in a better
position to actually make the payments. Unfortunately, the
Committee failed to adopt this amendment.
I ultimately supported moving this legislation to the
floor, particularly after the Committee adopted amendments
Senator Coburn and I proposed to keep the pressure on USPS to
fundamentally reform its operations. One amendment I offered,
which was adopted by the Committee, would retain the existing
$15 billion debt ceiling for USPS. Senator Coburn's amendment,
which I had included as a portion of another amendment I filed
at the markup, would require the arbitrator to consider USPS's
financial condition when rendering collective bargaining
decisions. For Congress to maintain pressure on USPS to make
needed reforms, the proposals set forth in these amendments are
critical additions to the legislation.
Nonetheless, given USPS's past performance following
legislative relief from its financial obligations, I am
extremely concerned that the two factors I have outlined above
will place USPS back on Congress's doorstep in a few short
years, should this legislation be enacted. And, because of the
changes the bill would make, the financial obligations facing
the USPS would be more daunting than before. If the bill is
considered on the floor, I likely will offer additional
amendments designed to place the USPS on a stronger financial
footing moving forward.
In an April 2010 report on USPS's strategies and options to
facilitate progress toward financial viability, GAO indicated
that USPS's business model is not viable due to its inability
to reduce costs sufficiently in response to continuing mail
volume and revenue declines.\8\ Despite USPS's efforts to cut
costs, GAO found it has had difficulty eliminating costly
excess capacity and that its revenue initiatives have had
limited results. These GAO findings indicate that the USPS may
be able to improve its financial viability only if it takes
more aggressive action to reduce costs. For example, USPS's
capability to match its workforce to its changing workload is
restricted by USPS's inability to use part-time workers, and to
cross-train employees to work outside their crafts. GAO's
report also stressed the importance of USPS continuing to fund
its retiree health benefit obligations to the maximum extent
that its finances permit.
---------------------------------------------------------------------------
\8\GAO-10-455.
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It will take all members of the postal community, including
USPS employees and management, members of the mailing
community, Congress, and the Administration to contribute to
the solution to this financial crisis. Any legislation passed
by Congress should reinforce these goals, not undermine them.
Susan M. Collins.
ADDITIONAL VIEWS OF SENATOR DANIEL K. AKAKA AND SENATOR CARL LEVIN
The Committee report states that an amendment by Senator
Coburn would require arbitrators to take the financial health
of the Postal Service into account when a labor contract goes
to binding arbitration, but provides no information on the need
for that provision. We have concluded that there is no need for
the amendment, and that specifying what factors arbitrators
must consider is likely to distort the collective bargaining
and labor arbitration process.
At a hearing of the Committee's Subcommittee on Federal
Financial Management, Government Information, Federal Services,
and International Security, President Fred Rolando of the
National Association of Letter Carriers testified that under
Title 39 U.S.C., arbitrators may and consistently do take the
financial health of the Postal Service into account during
arbitration.\1\ Similarly, William Burrus, President of the
American Postal Workers Union (APWU), testified that in each of
the three negotiated and three arbitrated labor contracts in
the last 16 years, the financial health of the Postal Service
was a factor at the bargaining table and during arbitration.\2\
Several arbitrated labor disputes, in fact, have stated that
certain decisions were made in light of financial conditions at
the Postal Service.\3\
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\1\Senate Homeland Security and Governmental Affairs Subcommittee
on Federal Financial Management, Government Information, Federal
Services, and International Security Hearing, ``The U.S. Postal Service
in Crisis'' (S. Hrg. 111-409), p. 40, August 6, 2009.
\2\Id. at p. 50.
\3\See Interest Arbitration Proceedings, USPS and National Rural
Letter Carriers' Association, Opinion and Award, pp. 16-18, 28,
February 3, 2002 and Interest Arbitration with the National Association
of Letter Carriers, p. 29, September 19, 1999.
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Title 39 sets some general workforce policies for the
Postal Service, which some have suggested tie the hands of
postal labor arbitrators. According to 39 U.S.C. Sec. 1003,
``It shall be the policy of the Postal Service to maintain
compensation and benefits for all officers and employees on a
standard of comparability to the compensation and benefits paid
for comparable levels of work in the private sector of the
economy.''
This laudable policy is subject to the collective
bargaining process. The Postal Service does not set the pay and
working conditions of bargaining unit postal employees; it
bargains over them with its four employee labor unions.
Should labor and management fail to agree during periodic
contract negotiations, 39 U.S.C. Sec. 1207 provides for a
neutral arbitration board to settle disputed items. According
to subparagraph (c)(2): ``The arbitration board shall give the
parties a full and fair hearing, including an opportunity to
present evidence in support of their claims, and an opportunity
to present their case in person, by counsel or by other
representative as they may elect.'' Currently, the law provides
no direction or constraints on what the arbitrators consider,
requiring only that there is a full and fair hearing at which
each side may present its case. Rather, the law offers only
general guidance to the Postal Service, not arbitrators.
During the Committee's consideration of S. 1507, an
amendment from Senator Coburn was adopted, by voice vote, which
would for the first time add an explicit criteria that the
arbitration panel would be required to consider. It would amend
Sec. 1207(c)(2) by adding ``The arbitration board shall
consider the financial condition of the Postal Service in
making any decision.''
This amendment does not change the Postal Service's general
pay comparability or other compensation policies under 39
U.S.C. Sec. 1003, only how disputes should be settled if
collective bargaining fails. Moreover, it implies a lopsided
standard for arbitrators, favoring management, by requiring
that they consider financial health of the Postal Service and
no other factors. The language also presumes that each labor
contract will go to arbitration, and does not require any
consideration of the financial state of the Postal Service
during contract negotiations before any arbitration.
According to the amendment's supporters, one of the primary
reasons for inclusion of this language is to keep labor costs
down during times of financial difficulties for the Postal
Service.\4\ However, the Congressional Budget Office (CBO)
estimates for budgetary impacts of S. 1507, as amended, makes
no mention of any savings as a result of the arbitration
amendment. But even if it were effective in bringing labor
costs down, this is not the way to do it. As APWU President
Burrus testified, ``Free collective bargaining is either free
or it's not.''\5\ Within the confines of the collective
bargaining process, the parties must be free to reach their own
agreement. It does not work to establish a process allowing the
parties to bargain freely over wages and other issues, but then
allow the employer recourse to a neutral arbitrator required by
law not to be neutral.
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\4\Senate Homeland Security and Governmental Affairs Subcommittee
on Federal Financial Management, Government Information, Federal
Services, and International Security Hearing, ``The U.S. Postal Service
in Crisis'' (S. Hrg. 111-409), pp. 6, 10, 25, August 6, 2009.
\5\Id. at p. 50.
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The Postal Service certainly faces an immediate financial
crisis, brought on by customers using the mail less and
accelerated by the worst economic crisis since the Great
Depression. The Postal Service needs relief from its retiree
health prefunding payments to address its critical financial
deficits. Efforts to reduce the Postal Services workforce
costs, while important, should be examined separately. We
strongly support the aims of this bill, with the exception of
the amendment by Senator Coburn.
Daniel K. Akaka.
Carl Levin.