USPS OIG Responds to GAO Report

Hmmm… it appears that some members of Congress have been sitting on this GAO report for at least a week. Of course, the report was sent out to GOP-leaning news media to get ahead of today’s spin on the USPS overpayment. The games some people play once they are in power.

USPS OIG sent the following letter to GAO:

We disagree with the major conclusions of the report. Your review focuses on the 1974 law (P.L. 93-349), which is not in dispute. All parties agree that the 1974 law made the Postal Sen/ice responsible for funding the additional CSRS liabilities resulting from pay increases after 1971.

The issue in question surrounds the CSRS Funding Reform Act of 2003 (PL. 108-18) as it pertains to the Office of Personnel Management’s (OPM) share of CSRS liability. Your report fails to recognize how the 2003 law changed the 1974 law. We do not understand your assertion that the “consequence of the 2003 Act was to leave the 1974 allocation unchanged, notwithstanding the removal of the explicit allocation provision.” If. as you state, the allocation provision was removed, it does not seem reasonable to assume the intent of Congress was that the allocation remain unchanged.

In fact, the 2003 law changed the directive to OPM. As the legislative history shows, it was intended to “repeal” the 1974 law (Senate Report No. 108-35, page 6). OPM was required to adopt modern dynamic methods. Dynamic methods dictate that OPM take into account the effect of future salary increases on the total liability. Using these methods, OPM was to capture the size of the postal liability and the respective responsibilities of the Postal Service and OPM to satisfy the liability. Instead, OPM applied dynamic assumptions solely to the Postal Sen/ice’s share of the liability — not to its own share. It appears that OPM failed to follow the 2003 law and now must agree to do so or be compelled by law for a second time.

The current OPM methodology is neither fair nor modern nor does it comply with the 2003 law. We agree with you that action from Congress is necessary to settle this issue once and for all. We believe Congress did just that in 2003. If OPM cannot be convinced of the need to change its methodology, the only alternative is for Congress to compel OPM to act by adding even more explicit reform language to the legislation currently being prepared.

USPS OIG letter via

USPS OIG Letter to GAO

20 thoughts on “USPS OIG Responds to GAO Report

  1. Congressman Issa may be a great American, I haven’t followed his other bills or Congressional actions, however, on this one Bill alone, I conclude that he does not have the American public’s interest in his heart. I cannot conceive of the lies and misinformation that came up with THIS resolution of a ‘failing’ USPS. The failure of the USPS is the keeping up with the political requirements of the right wing Congress of December 2006. The USPS has never profited $5.5 billion in its existence. How could it pre-fund the retirement benefits by taking out that amount of its revenue every year and still be a viable financial institution? The mind boggles as to how that decision was made. The numbers show that without this pre-funding requirement, the USPS would break even or have a few million in profit. Why tear down a performing, functional, self-sustaining part of the government, when so many other parts of the government can’t even wipe their own backsides? Sound familiar, Congress?

  2. Sam thought his own post was so absurd that he couldn’t even finish it the first time. He started to type – laughed at how silly his post was- then had to come back and finish.

  3. ISSA a great American? A great American with a criminal record you mean. How this crook ever got elected is beyound me!

  4. ITheThe Dems are the blame for the wackos in Congress now.

    The tea party started when Obamacare was pass.Without this law being shoved down our throats our situation COULD have been resolved.

  5. IThis tea party started when Obamacare was pass.Without this law being shoved down our throats our situation COULD

  6. Impeach the traitors Issa and Ross!Their ilk is not needed in America!Boot out all the freeloading,lazy,fat-a**ed ,dopey teabaggers and rethuglicons!Bunch of crooked,dishonest liars and cheats!

  7. The US government has transferred $5 Billion of its debt onto the USPS.

    The USPS has a break-even pricing scheme, and doesn’t charge enough to cover the $5 Billion cost of paying the US government this fee.

    This is because the USPS is required to price its products at a price that reflects the cost of that product. As such, we price first class mail at the cost of first class mail, and we aren’t allowed to use funds from that fee to subsidize other classes of mail.

    The result has been that the $5 Billion has been borrowed by the USPS, and the USPS needs to charge more to pay it off.

    What will happen is this: the USPS will either charge more for its products, and thus transfer the cost like a tax upon the American people;

    Or, they will cut costs and services while still charging just as much for what people receive. the result here is that the people won’t be charged less for the reduced service and cost savings they would’ve gotten if USPS had cut these costs in the first place.

    Either way, it amounts to a transfer ot US government debt onto the public, and makes USPS tax the American public to pay for US government debt.

    Thanks a lot.

  8. Hey Suckas, add 3 years/10k to anybody eligible for VERA.. RIF the ‘immediate retirement” people and privatize the rest and let’s be done with it.

  9. If postal retiree funds had been placed in hands of USPS or PRC all past and present retirees would have wound up on welfare! Thank God these incompetent imbeciles never had the opportunity to squander away these retirement funds!

  10. USPS should have realized that pension money might not be returned before they handed out all the management bonuses.

  11. Guys, we are screwed, blued, and tattooed! Congress does what it must to keep in power, remember deregulation? Everything gets cheaper through competition? Where did that go??
    Term limits, never happen. The American public is under the thumb of those arrogant persons in DC.

  12. Politicians are all crooked, I say fire them all and start over. Any incumbent running for office needs to go. Next enact Term Limits with no retirement or healthcare benefits until they reach 66 years old. Next give them a normal salary not the over bloated one with all the perks they now get. Next, make lobbying against the law, punishable by imprisonment. Next, take away all staff and interns, and make the politicians work for their living like we have to do. Next, make them retire at 60 years of age. Next, limit personal wealth going in and going out, that way we make sure no kickbacks are occuring. Next, SEE HOW THEY LIKE IT! J.

  13. PL 109-435 Postal Accountability & Enhancement Act of 2006 said, that surpluses in postal CSRDF be transfered to the Postal service retiree health benefits fund in designated years begining 2007 & annual determination made by OPM of postal liability or surplus be SUBJECT TO REVIEW BY THE PRC (postal regulatory commission), at the request of USPS.

    This act was put in place by congress, and congress should back up the PRC not take of management of the post office. PRC was to review OPM and they determined there was a surplus, not only that but USPS OIG determined the same basic thing “overpayment”,. To say that determining the “appropriate allocation of responsibility for CSRS benefits is ultimately a policy choice rather than a question of accounting or actuarial standings.”, is like saying 5+5= 800 because it is an “ultimate policy choice,” …even though we all know 5+5=10 and 800 is just plain WRONG!
    The amendment Mr. Connolly of Virginia presented at the Congressional oversight committee should have passed. Congress needed to back the PRC not take over postal management.

  14. I don’t think Obama is a do nothing president…Issa, Ross, and the GAO are not our friends…and their tactics will not work. Issa and ross knew this going in and so they paid off senior officials at the GAO to side with them in an effort to railroad the weak APWU and NALC.

    But the Obama administration, as well as most democratic members of congress along with un-bribed officials of both the GAO and OPM will never let Issa commit this crime!

  15. The GAO is working for Issa and Ross.
    They take their orders from them.
    It is so sad that they have a personal agenda of destroying the post office and unions in America.
    While they use their offices for personal gains and to make themselves into multi millionaires.
    Where is Obama?
    He should be investigating Issa and Ross.
    That is some President we have.
    A do nothing President that looks the other way while these Republicans get away with their immoral and shameful conduct.

  16. The CSRS over funding issue has always been an essentially political one. It goes back all the way to the formation of the USPS from the old POD and continues through subsequent legislation that tried to adjust some of the chronic inequities embodied in the original transition and the manner in which Congress has overseen (some might say interfered in) the operation of the USPS.
    The fact that remains is that even without addressing this particular issue the excesses resulting from the ridiculous prefunding schedule and unchallenged overages in FERS payments are more than enough to set the USPS on sound footing without resorting to draconian layoffs and reductions in service. It bears repeating, the operations of the USPS have been essentially break even over the last five years – virtually all of the reported deficits are attributable to the prefunding mandate and other charges against the Postal Service.
    Postal pensions and retiree benefits are funded more solidly than virtually any other system public or private in the United States.
    What we need is a clarity of vision. Postal management has embraced a vision that says we must shrink, dismantle, and abandon a postal network that has taken generations to build in favor of a mailing stakeholder company. By definition they place themselves solidly in the camp of those who declare the mail irrelevant.
    Perhaps a more appropriate vision is of the Postal Service as infrastructure, embracing both the burdens, but more importantly the opportunities embodied in the universal service obligation. In this light the Postal Service continues to provide solid, well funded employment for hundreds of thousands while adapting to the needs of the American people.
    Our last mile delivery network provides profitable opportunity for private mailers who have repeatedly said they don’t want to build out to that depth. Our network of retail facilities can be utilized to provide a transitional bridge into the electronic economy for the unbanked and those who have not fully embraced the internet. Our broad plant and technological capacity can be utilized as a test platform for various green transportation models and our thousands of delivery vehicles can provide both test capacity for new technologies and act as data collection platforms.
    Fairness would dictate creating a postal structure that recognizes the value of the USO while fairly providing funding for past and future obligations. Unfortunately politics and a management that has been paralyzed by its own groupspeak will likely win the day.
    Given all that’s been said by postal management and the right wing cynics I wonder if it’s fair to ask, what efficiency would be accomplished by eliminating several hundred thousand well paying jobs in this economy? What trend line is improved by drastically raising rates or cutting service? How is the public better served by dismantling a system that provides for the neutral, broad and cost efficient exchange of information? How is the greater deficit problem solved by eviscerating our national infrastructure?

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