The Senate passed legislation last night allowing the U.S. Postal Service to scale back some of its pension payments, a move that could keep postal rates steady until fiscal 2006.
The bill — S. 380, the Postal Civil Service Retirement System Funding Reform Act of 2003 — passed under unanimous consent. As amended, it is identical to a House of Representatives bill expected to be approved April 8. The House bill, H.R. 735, also is called the Postal Civil Service Retirement System Funding Reform Act of 2003.
If approved, the House likely would adopt the Senate bill next week to avoid any procedural glitches associated with having two bills with the same text. Then the bill will go to President Bush's desk for a signature, which is expected to come before April 15, when Congress is scheduled to adjourn for recess.
“Today is a good day for anyone or any company that buys stamps,” said Bob McLean, executive director of the Mailers Council.
The move to reduce the contributions came after reviews by the federal Office of Personnel Management and the General Accounting Office found that the USPS was paying too much into the Civil Service Retirement System, which covers employees who joined the agency by 1983. It found the agency was on course to overfund its pension obligations by $71 billion.
The bill requires the postal service to use some of the savings to pay down its $11.2 billion debt in fiscal years 2003, 2004 and 2005. Other savings would be used to continue funding retiree health benefits and hold postal rates steady until 2006. It could not use the money to pay bonuses to its executives.
The postal service estimates that it would save $2.9 billion in fiscal year 2003 and $2.8 billion in FY 2004 through lower contributions.