H.R. 1351 and the United States Postal Service pension crisis

¶ … Pass H.R. 1351 "United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011"

It is no secret that the local post office is in trouble. The Postmaster General is claiming that the U.S. Postal Service is in peril of financial collapse. The current proposal on the table is to close thousands of post offices and postal facilities, reduce services like Saturday delivery, and lay off workers, modify benefit programs, and end protection against layoffs. H.R. 1351, the United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011, would start to solve part of the dilemma by requiring the Office of Personnel Management (OPM) to move the billions of dollars in overpayments to the retirement funds to the retiree health benefits account (O'Farrell, 2011).

H.R. 1351 has been proposed to modify the requirements of title 5, United States Code, involving the method for calculating the quantity of any Postal surplus or supplemental liability under the Civil Service Retirement System, and for other purposes. Basically this bill would require the Office of Personnel Management (OPM) to figure out the amount of any surplus or liability as of the close of the most recently ending fiscal year using the method necessary under this Act and if the outcome is an excess, to move the surplus amount to the Postal Service Retiree Health Benefits Fund within fifteen days after the determination of an excess (H.R. 1351: United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011, 2011).

Reasons for Passage

Currently the USPS is controlled by an exclusive legal burden to pre-fund future retiree health benefits, artificially stripping billions each year from their operational budget. The Postal Service would really be in the black if not for this burdensome mandate, which even covers retiree health benefits of future workers and has no equivalent in either the federal segment or private enterprise. At the same time, the USPS is in fact owed somewhere between fifty billion and seventy five billion for historic pension overpayments. This enormous treasure was funded entirely by postage rate-payers and contributions from postal employees.

HR 1351 provides a reasonable solution to the pension overpayment and retiree health pre-funding loads. And it does so without using a single tax dollar. It requires a definitive recalculation of the Postal Service's Civil Service Retirement System (CSRS) pension account balance. It then commands any resulting excess be transferred to the Postal Service Retiree Health Benefits Fund (PSRHBF). This legislation also foresees that fairly calculating the true value of billions in postal pension overpayments, employing systematic, dynamic, state-of-the-art actuarial methods, will take time. So it also provides short-term relief to the USPS in 2011 by permitting the agency to use an existing surplus in its Federal Employees' Retirement System (FERS) account to cover the 2011 retiree health pre-funding payment. In the end this is their own money from postal receipts and employee contributions this is being redistributed, not tax dollars being used (What's your position on H.R. 1351, 2011).

Opposing Reasons for Non-Passage

Those that oppose the passage of this bill feel that the U.S. Postal Service, and its accompanying pension liabilities, should be privatized and sold to the highest bidder. Some feel that this is a union backed bailout and that the union has no interest in protecting the American tax payer. These people feel that the USPS should be left to sink or swim and that if they fail this would be the beginning of government employee reduction. Other believe that it has been proven that things cannot go on the way they are ultimately, far-reaching changes are essential for survival.

Conclusion

The future of USPS and mail delivery is not looking bright. As digital technology continues to advance, USPS will persevere to struggle to find a place for itself. Congress, nonetheless, is making that effort even harder by staggering USPS's capability to cut costs and by banning competition. Mail service may lose its battle for continued existence, but it should be permitted make a run. As digital technologies become more and more accessible, mail is used less and less. E-mail, online bill payment, and even digital greeting cards are taking the place of paper and stamps. The inclination is clear First-class mail amount has shrunk twenty percent since its peak in 2006, and the fall shows no sign of ending. This doesn't automatically mean that mail service will go away altogether. There may very well be a use for hand-delivered mail going forward. And package delivery is up in today's online shopping economy. But there's no doubt the environment and scope of mail delivery will change radically.