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Senators reveal bipartisan plan to fix USPS' financial woes

Nov. 2, 2011 - 03:43PM   |  
By SEAN REILLY   |   Comments
Sen. Joseph Lieberman, I- Conn., is one of several senators backing legislation that would allow the Postal Service to tap a pension fund surplus to encourage as many as 100,000 employees to quit or retire in the next few years.
Sen. Joseph Lieberman, I- Conn., is one of several senators backing legislation that would allow the Postal Service to tap a pension fund surplus to encourage as many as 100,000 employees to quit or retire in the next few years. (GETTY IMAGES)

The U.S. Postal Service could tap a pension fund surplus to encourage as many as 100,000 employees to quit or retire in the next few years, under a bipartisan Senate bill introduced Wednesday.

The legislation, touted as a comprehensive fix for the failing mail carrier, would also lower its annual health care bill by billions of dollars, require eligible retirees to enroll in Medicare, and allow the Postal Service to create its own health insurance plan if its four unions go along, according to lawmakers and aides.

"If our rescue legislation is adopted, we're confident that the U.S. Postal Service ... will survive and flourish through the 21st century and beyond," Sen. Joe Lieberman, I-Conn., chairman of the Senate Homeland Security and Governmental Affairs Committee, said at a news conference. The committee plans to vote on the bill next Wednesday.

The measure would, however, bar the Postal Service from ending most Saturday delivery for at least two years. After that, it could take that step which USPS leaders say would save $3 billion annually only after showing it has exhausted all other cost-cutting options and comes up with remedies to soften the impact on customers who may be disproportionately affected.

Lawmakers want to ensure that eliminating Saturday delivery "is the last resort, not the first option," said Sen. Susan Collins of Maine, the committee's top Republican.

But the Postal Service, which says it is at risk of running out of cash by next summer, wants to take that step immediately.

In an email, USPS spokesman Dave Partenheimer said the agency is reviewing the bill "to determine how it addresses our financial crisis and the need for a flexible business model."

The four postal unions had no immediate comment.

The Postal Service, which lost billions of dollars last fiscal year, which ended in September, is moving ahead with plans to close more than 300 mail processing plants and up to several thousand post offices. To aid in shrinking its workforce, the bill would give the agency access to about $7 billion in overpayments into the Federal Employees Retirement System.

The Postal Service predicts that it would need about $1.7 billion of that total for early-out incentives or to credit employees with more service years to allow them to retire, said Sen. Tom Carper, D-Del., chairman of the Senate governmental affairs subcommittee with direct responsibility for the Postal Service. The agency could use the balance of the money to pay down some $15 billion in debt to the U.S. Treasury and for other purposes.

Among other provisions, the legislation would significantly lower the amount currently around $5.5 billion that the Postal Service has to pay each year to "pre-fund" future retiree health care benefits. In a change that would affect the rest of the federal workforce, the measure would also revamp the federal workers' compensation program so that new enrollees would have their benefits cut from two-thirds to half of their previous salary once they reach retirement age.

Besides Lieberman, Collins and Carper, the bill's sponsors include Sen. Scott Brown of Massachusetts, the top Republican on Carper's subcommittee.

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