Congressman Lynch Introduces Legislation to Enhance Financial Viability of the United States Postal Service

Mar 15, 2013

Congressman Stephen F. Lynch, Ranking Member of the House Subcommittee on the United States Postal Service, recently introduced legislation to enhance the financial footing of our nation’s most trusted government institution. In particular, the United States Postal Service Stabilization Act, H.R. 961, would address the billions of dollars that the agency has overpaid to the Federal Employees Retirement System (FERS) liabilities and return the overpayment surplus to the Postal Service so that it can better meet its financial obligations.

 “The Postal Service continues to face fiscal challenges and it is imperative that Congress reach agreement on postal reform in the 113th Congress,” said Congressman Lynch. “The United States Postal Service Stabilization Act is a commonsense alternative that will afford the Postal Service much-needed financial flexibility without compromising mail delivery standards or unfairly burdening our dedicated postal workforce.”
 
As recently reported by Postmaster General Patrick Donahoe, the Postal Service is facing a $20 billion budget gap after recording a loss of $15.9 billion last year. In addition, while the Postal Service has overpaid its FERS liabilities by billions of dollars, the amount that the federal government could return to the agency has been significantly understated due to the use of an arbitrary and misguided calculation formula by the Office of Personnel Management (OPM).  In particular, in determining the amount of the Postal Service’s FERS surplus, OPM did not include the fact that postal workers have experienced significantly less salary growth than the rest of the federal workforce.

 The United States Postal Service Stabilization Act would require the federal government to recalculate the Postal Service’s FERS liabilities using postal-specific factors such as postal salary growth and postal employee demographic statistics in order to determine the exact amount of the FERS surplus.  According to a recent report issued by the Hay Group, an independent actuarial consulting firm, the use of postal-specific assumptions by OPM could result in a FERS surplus of at least $12.48 billion, as opposed to the $3 billion figure projected by OPM using government-wide factors.  Notably, H.R. 961 would also return this overpayment amount to the Postal Service in order to enhance the agency’s financial viability and better allow USPS to meet its outstanding and future financial obligations.  Moreover, the bill would also require the use of postal-specific assumptions going forward in order to safeguard against future overpayments.

The United States Postal Service Stabilization Act has received the strong support of the National Association of Letter Carriers (NALC), the National Rural Letter Carriers’ Association (NRLCA), the National Postal Mail Handlers Union (NPMHU), and the American Postal Workers Union (APWU).