Postmaster General Patrick Donahoe today approached the House committee preparing a postal reform bill with one overriding question: “Does it enable $20 billion in savings by 2016?”
Rep. Darrell Issa (R-CA), the chairman of the House Oversight and Government Reform Committee, issued a “discussion draft” of a postal reform bill in May that included compromises he hopes will win bipartisan approval. The draft did not appear to meet the full approval of the PMG, however, who is adamant that any new legislation remove the U.S. Postal Service’s obligation to prefund employee health and retirement programs. Issa’s plan calls for future payments to be made on an actuarial calculation that will reduce the Postal Service’s annual $5.7 billion prefunding payment, which it defaulted on last year.
“We are seeking the authority under the law to control our healthcare and retirement costs. We can completely eliminate the need for Retiree Health Benefit prefunding if we can move to our proposed solution,” Donahoe said, addressing Issa directly.
Our goal should be the elimination…not just re-amortization…of any prefunding, and this is achievable,” Donahoe continued. “Our employees and retirees will also benefit from lower premiums and get the same or better health benefits. Just by pursuing this one element of our plan, the Postal Service can reduce its annual costs by up to $8 billion dollars.”
Donahoe added that the USPS will seek a refund of what it sees as some $6 billion in overpayments into the Federal Employees Retirement System (FERS). Issa’s draft includes a provision that will prohibit the USPS to use any FERS refunds to offset operating costs.
Donahoe warned the committee that the Postal Service was headed for a chasm and that postal reform “can be the bridge over that chasm.” But he added that half measures, such as some proposed by Issa, “are about as useful as half a bridge.”