News & information

Proposed budget preserves six-day mail delivery and offers postal relief

The U.S. Postal Service received mixed news from the Obama administration Feb. 14 when the White House released its proposed budget for the 2012 fiscal year. The White House reaffirmed its commitment to six-day mail delivery by proposing the continuation of the annual appropriation provision that mandates it. It also requested legislation to defer $4 billion of the $5.5 billion pre-funding payment due in September for future retiree health benefits and to require the Office of Personnel Management to return to the Postal Service a $6.9 billion pension surplus in its Federal Employees Retirement System (FERS) account over the next 30 years, a provision worth $550 million per year.

Unfortunately, the administration’s budget fails to address the massive over-funding of the Postal Service’s Civil Service Retirement System (CSRS) pension obligations (some $50 billion to $75 billion, according to independent analysts). The NALC, the postal industry in general and the bipartisan leadership of our oversight committee in the Senate—Sen. Tom Carper (D-DE) and Sen. Susan Collins (R-ME)—support using this surplus to relieve the excessive burden of financing future retiree health benefits—a burden that no other agency or private company in America is required to carry.

“We are grateful that the administration confirmed its support for six-day delivery and welcome the short-term relief that will come with another deferral,” NALC President Fredric V. Rolando said, “but Congress and the Obama administration have to step up on a permanent fix for pre-funding retiree health, a fix that uses the CSRS surplus.”

“With a divided Congress, there’s little doubt that we face an uphill fight for real pre-funding reform,” he said. “But we believe that a strong Postal Service is a bipartisan policy.”

Aside from the six-day delivery provision, the most promising part of the 2012 budget proposal is the inclusion of wording that directs the Office of Personnel Management to refund the almost $7 billion surplus in the Postal Service’s FERS account over the next 30 years, beginning with a $550 million payment this year. While the NALC welcomes the administration’s recognition that the FERS surplus should be returned to the USPS, we believe this policy should be applied to the much bigger CSRS surplus ($55 billion to $75 billion) and that the funds should be returned much more quickly so that they can be used to cover the cost of the pre-funding payments.

The president’s budget also addresses reforms of the Federal Employee Compensation Act (FECA) and calls for eliminating relatively small $29 million annual payments to the Postal Service for past revenue forgone appropriations that were not paid to cover the cost of free mail to the blind. NALC is studying the administration’s FECA proposal and will report full details in the days and weeks ahead, and we will oppose the cut in revenue forgone payments.