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Legislative & Political Dept. |
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Congress Finally Acts,
Approves Short-Term USPS Financial Relief
(This article by Legislative & Political Department officers Myke Reid and Steve Albanese first appeared in the November/December 2009 issue of The American Postal Worker magazine.)
With the end of Fiscal Year 2009 fast approaching, both the House and Senate approved an appropriations bill in late September that provided emergency financial relief for the Postal Service. President Obama signed the legislation into law Sept. 30, 2009.
The provision gave one year of financial relief, allowing the USPS to make a reduced payment to the Postal Service Retiree Health Benefits Fund for future-retiree health benefits for one year. Instead of making a scheduled $5.4 billion payment before the end of the fiscal year on Sept. 30, the Postal Service had to pay $1.4 billion.
The Postal Accountability and Enhancement Act of 2006 (PAEA) established the retiree fund and required the Postal Service to make annual payments to cover health insurance premiums for USPS employees who will retire in the future.
The PAEA specifies the size of the payments for the first 10 years — through FY 2016, the range is $5.4 billion to $5.8 billion. After 2016, the Office of Personnel Management is directed to recalculate the amount of the remaining liability, and to establish a payment schedule to amortize the remaining liability.
An earlier bill, H.R. 22, would have given the USPS eight years of financial relief. Although it garnered the support of 339 co-sponsors in the House, budget rules and legislative guidelines necessitated the consideration of a less-costly vehicle for financial relief. A compromise covering a three-year period, which was reported by the House Committee on Oversight and Government Reform on July 21, was later adjusted to the one-year plan included in the spending bill.
Even that bill drew criticism from some Republican legislators, who said that it constituted a “bailout.” But the chairmen of the House committee and subcommittee that have oversight responsibility for the Postal Service refuted those claims in a Sept. 15 letter to House members.
Rep. Edolphus Towns (D-NY) and Rep. Stephen Lynch (D-MA) wrote, “The bill is not a bailout. No taxpayer funds will be provided to the Postal Service.” It would lower the payment the USPS must make into the Retirement Health Benefits Trust Fund this year.
“No other government agency or private company is required to prefund retiree benefits on such an aggressive schedule,” the letter noted, and it pointed out that “the trust fund currently contains about $32 billion.”
The House approved the appropriations bill on Sept. 25 by a vote of 217 to 190. The Senate voted in favor of the measure 62 to 38 on Sept. 30. President Obama signed the legislation that evening.
Although the final bill provides less relief than the original version of H.R. 22, its enactment will help the USPS in the short-term to survive the most devastating economic downturn since the Great Depression.
We would like to thank former Rep. John McHugh, Rep. Towns, Rep. Lynch, Rep. Danny Davis (D-IL), and Rep. Darrell Issa (R-CA) for their support. In the Senate, thanks go to Homeland Security and Government Affairs Chairman Joe Lieberman (ID-CT), Appropriations Committee Chairman Daniel Inouye (D-HI), Susan Collins (R-ME), and Tom Carper (D-DE).
Thanks also to the many staff people who were cooperative and helpful during the consideration of this legislation.
S. 1507 Still a Threat
We caution, however, that passage of this legislation does not preclude further consideration of S. 1507, a bill introduced by Sen. Carper. An amendment offered by Sen. Tom Coburn (R-OK) and approved by the Governmental Affairs committee provides “that an arbitration board shall consider the financial condition of the Postal Service in certain labor disputes,” promoting that issue to the forefront of issues to be considered by interest arbitrators.
John McCain (R) of Arizona also introduced amendments that are likely to be looked at by senators.
APWU members are once again urged to contact their two U.S. Senators to oppose S. 1507 as currently structured.
