Sen. Tom Carper (D-DE) has introduced a bill that would eliminate Saturday mail delivery and give the U.S. Postal Service greater leeway to close post offices as well as relieve certain obligations to pay retiree health costs.
One key provision of this bill would give the USPS authority to reduce delivery frequency to five days a week, down from the current six.
The USPS has said for several years that making this move would save it at least $3 billion per year. At first, mailer groups blasted this idea, saying it would further erode the importance of direct mail. But earlier this year, several said they could live with it if it truly cur expenses but warned there was a lot of resistance in Congress to this (http://directmag.com/mail/news/mail-group-live-delivery-cutback-0222/index.html).
This bill also attempts to permanently address the pension and retiree health issues that have caused the USPS serious financial problems for years, according to Carper.
Earlier this year, the USPS Office of the Inspector General found the postal service has overpaid its pension obligations to the Civil Service Retirement System by $75 billion and the method for calculating this amount was unfair (http://directmag.com/postal/0122-postal-usps/index.html).
Also, since 2007 the USPS has been required to pay between $5.5 billion and $5.9 billion a year in an effort to prefund its future retiree health obligations. The postal .service has had to pay this money since the passage of the Postal Accountability and Enhancement Act, which was intended to reform the USPS.
Last year, the Obama administration gave the USPS temporary relief from this obligation but mailer groups thought at the time further USPS reform may be needed (http://directmag.com/mail/news/mailer-fear-usps-reform-1005/index.html).
The measure would also require the U.S. Office of Personnel Management to recalculate the Postal Service’s retiree pension obligations. The new method will use a modern formula that more fairly divides responsibility for pension costs related to pay increases granted to former Post Office Department employees who transitioned to the Postal Service between the Postal Service and the federal government, according to Carper.
The legislation also seeks to reform the way in which postal employees’ wages and benefits are determined.
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