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Board could take over Postal Service's finances under new bill

Sep. 21, 2011 - 06:00AM   |  
By SEAN REILLY   |   Comments
The legislation passed by the House Oversight and Government Reform postal subcommittee would create a five-member board to take control of the Postal Service's finances if the agency misses any payment to the federal government.
The legislation passed by the House Oversight and Government Reform postal subcommittee would create a five-member board to take control of the Postal Service's finances if the agency misses any payment to the federal government. (Getty Images)

A divided House subcommittee approved legislation Wednesday aimed at forcing a major downsizing of the U.S. Postal Service's workforce and its network of 32,000 post offices and processing plants.

The 8-5 party-line vote by the House Oversight and Government Reform postal subcommittee came after several hours of heated debate over how best to rescue the mail carrier. The Postal Service says it expects to lose more than $8 billion this fiscal year and could run out of cash by next summer.

The bill, sponsored by Reps. Darrell Issa, R-Calif., and Dennis Ross, R-Fla., would create a five-member board to take control of the Postal Service's finances if the agency misses any payment such as an approximately $5.5 billion retiree health care payment due at the end of each September to the federal government.

Among other steps, the board could override union contracts and order layoffs in the interest of putting the Postal Service back in the black.

However painful, such steps are necessary for its survival, Republicans said.

"Either we make necessary systemic changes to the postal infrastructure, or we allow this proud American institution to disintegrate before our eyes," said Ross, who chairs the postal subcommittee. The measure would save $10.7 billion a year once fully implemented, he said.

Democrats said that the bill has no chance of winning the bipartisan support needed to become law and would further weaken the Postal Service's competitiveness.

The bill "is setting the Postal Service up to fail," said Rep. Elijah Cummings, D-Md. Rep. Gerald Connolly, D-Va., accused Republicans of seeking "to break the back of public employee unions."

Connolly and other Democrats said the Postal Service should get access to tens of billions of dollars in pension fund overpayments identified by the agency's inspector general and an outside actuary. Republican lawmakers disagree on whether any overpayments occurred.

Although about a half-dozen measures have been introduced to address the Postal Service's woes, Wednesday's vote marked the first time that any has advanced beyond the talking stage. Issa, who chairs the oversight committee, indicated that the full panel will take up the measure in two weeks.

On Monday, http://www.federaltimes.com/article/20110919/DEPARTMENTS02/109190303/1026/DEPARTMENTS02">the Obama administration outlined its own rescue package that, like the Republican bill, would allow the Postal Service to end most Saturday delivery. It also would give the agency a break on retiree health benefit payments for the next several years.

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