Congressman William Lacy Clay (D-MO) issued the following press release:
Clay Cosponsors Bill to Give Postal Service 90-day Extension of Pre-Payment of Retired Employee Healthcare Benefits
September 16, 2011
Washington, DC – Congressman Wm. Lacy Clay (D) Missouri, joined Ranking Oversight Committee Member Elijah E. Cummings (D) Maryland, and ten of his House Democratic colleagues to co-sponsor legislation that would provide the U.S. Postal Service with a 90-day extension on its pre-payment to the retired postal employee health benefit fund. The bill, H.R. 2884, would postpone a $5.5 billion prepayment to the Postal Service’s retiree health benefits fund that is currently due on September 30th.
“Transforming the U.S. Postal Service into a viable business model for the 21st Century is absolutely essential,” said the Congressman. “This bill gives Congress some time to consider positive steps that will put the postal system back on stronger financial footing while maintaining our historic commitment to universal mail service for every American.”
Under the 2006 Postal Accountability Enhancement Act, the U.S. Postal Service is currently required to make accelerated annual payments to fully fund its anticipated retiree health care costs. That mandate creates an enormous cash-flow crunch and makes the postal service less competitive. The postal service has already paid more than $42 billion to the U.S. Treasury toward its employees’future healthcare costs.
“The truth is that in addition to a decline in first-class mail volume, part of the reason that the Postal Service is experiencing huge financial losses is that previous Congresses imposed costly mandates that no other federal agency must meet, “ said Mr. Clay. “Our bill will ensure that the Postal Service and Congress have sufficient time to work together on comprehensive legislation to improve the Postal Service’s long-term viability.”
Temporarily suspending this prepayment will not affect the health care provided to postal retirees and will not disrupt the daily delivery of mail or the operations of post offices or mail processing facilities. The U.S. Postal Service currently handles an average of 563 million pieces of mail each day, and it delivers mail to over 151 million addresses.