Congressional Budget Office Analysis of Senate postal reform bill
S. 1789 would change the laws that govern the operation of the United States Postal Service (USPS). Major provisions of the bill would:
Transfer more than $11 billion in surplus retirement contributions from the Civil Service Retirement and Disability Fund (CSRDF) to the Postal Service Fund;
Change the payments that the Postal Service is required to make to the Postal Service Retiree Health Benefits Fund (PSRHBF);
Permit the Postal Service to reduce mail delivery from six days per week to five;
Authorize the Postal Service to offer employees credit for additional years of service as an incentive to retire; and
Reduce payments to most federal workers receiving benefits under the Federal Employees’ Compensation Act (FECA) and reform the administration of that act. In addition, other provisions of S. 1789 would aim to help the Postal Service reduce its costs and increase its revenues.
CBO estimates that enacting the bill would result in off-budget savings of $25.6 billion over the 2012-2022 period and on-budget costs totaling about $31.9 billion. (USPS cash flows are recorded in the federal budget in the Postal Service Fund and are classified as off-budget, while the cash flows of the PSRHBF, CSRDF, and the FECA account are on-budget.)
Combining those effects, CBO estimates that the net cost to the unified budget of enacting S. 1789 would be $6.3 billion over the 2012-2022 period. All of those effects reflect changes in direct spending. In addition, we estimate that enacting S. 1789 would decrease revenues by $15 million over the 2012-2015 period. Pay-as-you-go procedures apply because enacting the legislation would increase on-budget direct spending and decrease
S. 1789 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, or tribal governments.
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of S. 1789 is shown in Table 1. The costs of this legislation fall within budget functions 370 (commerce and housing credit) and 600 (income security).
BASIS OF ESTIMATE
For the purposes of this estimate, CBO assumes that S. 1789 will be enacted early in calendar year 2012. The bill would affect outlays of the Postal Service Fund, which is off-budget, and of the PSRHBF, CSRDF, and FECA accounts—all of which are on-budget. CBO estimates that the net cost to the unified budget would total $6.3 billion over the 2012-2022 period. In addition, we estimate that enacting the bill would decrease revenues by $15 million over the 2012-2015 period (with no impact on revenues after 2015).