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Postal Reform Battle Rages On

Myke Reid
Legislative and Political Department Director

(This article appeared in the January/February 2012 issue of The American Postal Worker magazine.)

Shortly after a House committee approved H.R. 2309 — a bill that would destroy the Postal Service as we know it — members of the Senate postal committee signaled that the bill was unacceptable to them. On Nov. 2, 2011, Senators Joe Lieberman (DCT), Susan Collins (R-ME), Tom Carper (D-DE) and Scott Brown (R-MA) introduced their own proposal for reforming the Postal Service, the 21st Century Postal Service Act (S. 1789). The bill was amended and approved by the Senate Homeland Security and Governmental Affairs Committee on Nov. 9.

While the Senate bill would give the USPS short-term financial relief, it also would inflict long-term damage to the Postal Service. Because it fails to provide sufficient economic relief, the legislation would force the agency to close thousands of post offices and hundreds of mail-processing facilities. It also would allow the USPS to eliminate Saturday mail delivery after two years and would degrade delivery to customers’ doors.

The bill would return approximately $11.4 billion in overpayments the USPS made to the Federal Employees Retirement System (FERS), and urges the USPS to use part of that money to offer incentives to active employees who retire by Oct.1, 2014.

However, the bill would not return $50 billion to $75 billion in overpayments to the Civil Service Retirement System (CSRS). Two independent actuarial studies concluded that the USPS has overpaid the CSRS account by $50 billion to $75 billion due to a faulty funding formula.

Earlier bills introduced by Sen. Carper and Sen. Collins both contained provisions that would return the CSRS overpayments, but the new bill excludes that provision. (The Government Accountability Office [GAO] issued a report in October that did not specifically refute the overpayments, but concluded that the overpayments did not violate federal law.)

In addition, although the bill would restructure required payments to pre-fund healthcare benefits for future retirees, it would not do enough to relieve the Postal Service of the pre-funding obligation. No other government agency or private company is required to make these payments. The bill would re-amortize the payments over a 40-year period, rather than the 10-year period required by current law.

Several other provisions of the bill are also troubling to the APWU: It would dramatically reduce the compensation of employees who are injured on duty once they reach retirement age. The bill also would require arbitrators to consider the financial health of the USPS. Arbitrators have routinely done so for 40 years, and the provision is a thinly-veiled attempt to skew contract negotiations in favor of management.

In addition, the bill would allow the USPS and postal unions to agree to develop an independent health benefit plan by September 2012. If they agree, postal workers would no longer be eligible to participate in the Federal Employees Health Benefit Program (FEHBP).

While S. 1789 is better than the bill introduced in the House, the APWU cannot support it as written. We will work to improve the bill when it comes to a vote before the full Senate. In the meantime, APWU members must remain vigilant and let their senators know about our concerns.

Amendments Offered

At the Nov. 9 Senate committee meeting where the bill was approved, nearly 20 amendments were offered by both Democrats and Republicans. This meeting, known as a “mark-up,” is a prelude to consideration of the bill by the full Senate.

At the mark-up, Sen. John McCain (R-AZ) tried to substitute H.R. 2309, the Issa bill, for the legislation offered by his senate colleagues, but the motion was defeated. He also offered amendments to deny postal unions the right to bargain over reduction-in-force procedures; increase employees’ share of health insurance costs; establish a commission to close post offices with little or no public input, and immediately reduce mail delivery to five days per week. All of Sen. McCain’s amendments were defeated.

Sen. Tom Coburn (R-OK) offered amendments to close unprofitable rural post offices; establish a national “Do Not Mail” program; end the mailbox monopoly in rural areas, and require arbitrators to consider stand-by time when deciding union contracts. All of Sen. Coburn’s amendments also were defeated.

Sen. Daniel Akaka (D-HI) offered several proposals that would remove objectionable provisions from the bill. He proposed amendments to prevent reductions in OWCP payments to injured employees when they reach retirement age; eliminate instructions requiring arbitrators to consider the financial condition of the Postal Service when deciding union contracts; prevent the Postal Service from establishing its own healthcare plan, and eliminate the requirement that retirees be forced to enroll in Medicare A and B. The amendment eliminating the Medicare A and B enrollment requirement was approved; the others were defeated.

Sen. Mark Begich (D-AK) was troubled by language instructing arbitrators to consider the financial condition of the USPS prior to rendering an award. After much discussion, the matter was deferred, and could be revisited as the bill moves forward.

In the end, S. 1789 was approved by the committee by a vote of 9-1 (counting proxies, the tally was 11-6), and now moves to Senate floor for action.

We will continue to work to remove objectionable provisions from the bill. If the Senate passes the bill and the House passes H.R. 2309, a conference committee between both chambers is likely to be established, where the differences between the two versions would be resolved.

Sen. Sanders Introduces Postal Reform Bill

Sen. Bernie Sanders (I-VT) introduced the Postal Service Protection Act (S. 1853) on Nov. 10, which would address the Postal Service’s financial woes “without resorting to drastic cutbacks in service and massive layoffs.”

Sen. Sanders hosted a town meeting of 300 Vermont residents just days before he introduced the Postal Service Protection Act.

Sen. Sanders hosted a town meeting of 300 Vermont residents just days before he introduced the Postal Service Protection Act.

Sen. Sanders’ bill would rectify the Postal Service’s immediate financial crisis by allowing the USPS to recover the overpayments it made to its retiree pension funds and by eliminating the unique requirement that the USPS pre-fund 75 years worth of future retiree health benefits in just 10 years.

It also would protect mail-processing facilities by requiring strict standards for delivering first-class mail; safeguard rural post offices by giving the Postal Regulatory Commission binding authority to prevent closures based on the effect on the community and employees; prohibit USPS from considering whether a post office is turning a profit when making the decision to close an office; protect six-day delivery, and establish new ways to generate revenue by ending the prohibition on USPS providing non-postal services.

COPA Launches New Program

Elections have consequences. Currently, many in Congress are ready to dismantle the Postal Service: They are threatening to lay-off over 100,000 USPS employees, close post offices and processing facilities, and break our contract. [read more - members only]

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