Mailer groups are more outraged at Congress than at the U.S. Postal Service for saying it would file a postal rate case to cover employee pension obligations that were previously lifted.
At its monthly meeting on Feb. 17, the USPS Board of Governors told USPS management to prepare a filing with the Postal Rate Commission to cover a $3.1 billion escrow requirement resulting from changes in the Postal Civil Service Retirement System Funding Reform Act of 2003.
“What folks need to understand is that the postal service wouldn’t have to file for this extra rate increase if it weren’t for the extra obligations of civil service and military retirement,” said Neal Denton, executive director of the Alliance of Nonprofit Mailers.
“In fact, if the postal service didn’t have these obligations, it’s possible they may not have had to file a rate case at all,” he said, noting that the USPS had recently improved its productivity and financial performance.
In the fall of 2002, the USPS discovered that it had overpaid the Civil Service Retirement System (CSRS) fund that provides for its retired employees by more than $70 billion. But in order for the USPS to reclaim that money it needed Congressional approval [Direct Newsline, Nov. 4].
The industry then lobbied Congress fervently and got the payments obligations transferred to the U.S. Treasury Dept. and put the money the USPS would have spent on these obligations into an escrow account.
That law, P.L. 108, expired at the end of 2004, bringing the entire process back to square one. At the same time, mailers were hoping overall postal reform legislation would deal address this matter.
Two postal reform bills in the last session of Congress, S 2468 and HR 4341 that dealt with this issue and many others, died, leaving the USPS with a $3.1 billion shortfall it must make up somehow.
The postal service had to make this additional move to get back money “it didn’t really need” because of the pension issue, explained Bob McLean, executive director of the Mailers Council.
He predicted the rate case could be filed as early as March but did not speculate on its size.
To resolve this whole issue, McLean renewed his call for comprehensive postal reform as outlined in HR 22, sponsored by Rep. John McHugh (R-NY). Among many other things, this bill would eliminate the escrow provision.
McLean said HR 22 would likely be referred to House Government Reform Committee next month and that Sen. Susan Collins would probably introduce her version then.
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