WASHINGTON – Anticipating the imminent default by the U.S. Postal Service (USPS) on its required pre-payment for future retiree health benefits, the Senate authors of comprehensive postal reform legislation Wednesday urged the House of Representatives to consider its own version of postal reform legislation quickly.
Senators Joe Lieberman, ID-Conn., Susan Collins, R-Maine, Tom Carper, D-Del., and Scott Brown, R-Mass. authored reform legislation to shore up the Postal Service’s financial solvency. That legislation passed the Senate in April. The House must act now and allow the two chambers to reconcile the differences between the bills.
Lieberman, who is Homeland Security and Governmental Affairs Committee Chairman, said: “In the absence of reform legislation, the financial condition of the Postal Service continues to deteriorate to the extent that it will miss a $5 billion payment to its healthcare fund for future retirees today and is likely to miss the next payment as well. The Postmaster General is running out of options, and, unless Congress acts, draconian cuts are a certainty in the future. The Senate passed the 21st Century Postal Service Act in April. It is long past time for the House to take up its own postal legislation so that we can get the Postal Service back on solid financial footing before essential services are lost for millions of people.”
Ranking Member Senator Collins said: “More than three months ago, the Senate passed comprehensive postal reform by a strong bipartisan vote. Changes are needed now, but we cannot move forward without action by the House of Representatives. Failure to act is irresponsible and only ensures that the financial free fall of the Postal Service will continue.
“For the first time, the Postal Service will default, on a required payment to the fund that supports health care for future retirees, potentially setting the stage to break promises to current workers about their future benefits. The Senate bill ensures those promises will be kept, while still providing billions in relief by restructuring the payment plan in a responsible way.
“The Postal Service faces a daily loss of $25 million. Without legislation, the universal mail service that drives a trillion dollar mail industry and supports more than eight million jobs will be in jeopardy. Each job lost in this fragile economy is another family tragedy. The Senate has passed a bipartisan postal reform bill to preserve the Postal Service and the critical economic activity it supports. Now it is the House’s turn. We urge the House to act now.”
The Postal Service is expected to default late Wednesday on a long-deferred payment to the U.S. Treasury to fund its future retiree health care obligations. The payments are required as a result of the 2006 Postal Accountability and Enhancement Act. It is important to note that the Postal Service has reported deficits of billions of dollars even with the prefunding payment deferred, suggesting that the fiscal woes would still exist without the advance funding requirements in the 2006 law.
The bipartisan Senate bill, the 21st Century Postal Service Act, would restructure the Postal Service’s retiree health payments by stretching more of the total obligation out over a 40-year amortized payment schedule and by moving that schedule up to start in 2013 instead of in 2017.