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Postal Service seeks $4 billion waiver on upcoming retiree health fund payment

Aug. 6, 2010 - 06:00AM   |  
By SEAN REILLY   |   Comments
Congress last year allowed the Postal Service to ante up only $1.4 billion instead of the $5.4 billion than it would otherwise have had to pay under the 2006 Postal Accountability and Enhancement Act.
Congress last year allowed the Postal Service to ante up only $1.4 billion instead of the $5.4 billion than it would otherwise have had to pay under the 2006 Postal Accountability and Enhancement Act. (Candice Towell / GNS)

Just as it did last year, the U.S. Postal Service is asking Congress for a $4 billion break on a contribution due next month to its Retiree Health Benefits Fund.

"We are in discussions with committee staff on how we can gain some relief this year as well," USPS spokesman Gerry McKiernan said today. While it's up to lawmakers to decide what to do, he said, "I think there's an understanding and appreciation of our situation. ... We're hopeful."

Under federal law, the Postal Service must contribute $5.5 billion to the retiree fund on Sept. 30. In announcing another quarter of dismal financial results Thursday, the agency warned that it could not make that payment and meet all of its fiscal 2011 obligations.

Although the payment is required under the 2006 Postal Accountability and Enhancement Act, Congress last year allowed the Postal Service to ante up only $1.4 billion instead of the $5.4 billion than it would otherwise have had to pay. The $4 billion balance was included in obligations to be amortized after fiscal 2016, according to a Congressional Research Service report. "We've asked for relief similar to what we got last year," McKiernan said.

Both the Postal Regulatory Commission and the Postal Service's inspector general have concluded that the current payment schedule for the retiree health fund is overly aggressive, according to the CRS report. The inspector general believes that USPS should pay $1.6 billion annually through 2016 to meet its obligations, while the PRC pegged the needed yearly contribution at $3.4 billion.

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