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Hopes Rise for New Postal Reform Bill

The fight for postal reform continues. As of late July, Sen. Tom Carper (DDE) still intended to put a bipartisan postal reform bill on President Obama’s desk by the August recess. While this isn’t likely, the Republican and Democrat leaders of the House Committee on Oversight and Government appear headed toward a compromise that could have a bipartisan bill in the offing by year’s end.

Committee Chairman Darrell Issa (R-CA) has issued a “discussion draft” of a new bill that contains four significant changes to H.R. 2309, which failed to pass muster in the last Congress.

Key changes in Issa’s new draft:

1. Eliminated is a provision to set up an independent body to oversee closure of postal facilities modeled on the Base Realignment and Closure (BRAC) plan. “Chairman Issa has taken into consideration the progress the USPS has made on its own in consolidating operations,” says Issa aide Ali Ahmad.

2. Issa called for total elimination of Saturday delivery in the bill he and Rep. Dennis Ross (R-FL) introduced in the 112th Congress. The new bill allows Saturday delivery of parcels and medications, as did Postmaster General Patrick Donahoe’s plan. “That was a big move on [Issa’s] part,” says Jerry Cerasale, SVP of government affairs at the Direct Marketing Association.

3. The USPS failed to make its annual $5.7 billion prepayment toward the retiree health care fund last year, and Donahoe has argued that the USPS could never again show a profit if saddled by this burden. Starting in 2014, according to Issa’s new plan, future payments will be based strictly on an actuarial calculation designed to achieve full funding by 2056. “This is similar to what the Senate did, which was to give the USPS a 20% write-down on principal and have them fund only 80% of the liability,” Ahmad says.

4. Surpluses in the USPS’s Federal Employees Retirement System (FERS) will be used to pay down health benefits liabilities. “The last Congress permitted a one-time set-aside to the Postal Service to use this surplus to cover operating losses,” Ahmad says. “It’s not something Issa is comfortable with.”

Donahoe challenged two of Issa’s proposals in an appearance before his committee in mid-July. Donahoe said that total elimination of the pre-funding requirement—“not just re-amortization”—was crucial to USPS’s survival. He also asserted that the USPS should have purview over FERS refunds.

Sen. Tom Carper issued a statement lauding Issa’s efforts to “address this imminent threat to the Postal Service.” The chairman of the Senate Homeland Security and Governmental Affairs Committee added that, while he differs with his House counterpart on postal reform in some areas, “Chairman Issa and I are united in our effort to restore the Postal Service to solvency and give it the tools it needs to thrive.”

Postal workers, however, appear poised to throw a wrench into the legislative machinery. “This discussion draft has a number of major problems that need to be addressed before it is used as the basis of actual legislation,” said National Association of Letter Carriers President Fredric Rolando in a statement, citing elimination of Saturday delivery as an example. He called for alternative approaches to modernize the USPS, “rather than to destroy it brick by brick.”

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