National Association of Postal Supervisors
NAPS Legislative & Regulatory Update - Feb. 17, 2009
A Case Where Congress Did Something Right ... Well Almost
As
questions continue to swirl in Washington whether the economic stimulus
package was too big, too small or just right, no one disputes the
wisdom of what Congress did three years ago in its passage of the postal reform law,
requiring the Postal Service to set aside funds each year to assure the
future payment of postal retiree health care premiums.
The
good sense in what Congress did in establishing the Postal Service's
Retiree Health Benefits Fund and requiring USPS annual pay-ahead
payments into the Fund was underscored yesterday, when USA Today
led with a front-page look at how state and local governments have
pretty much failed to set aside any money to pay for at least $1 trillion in medical benefits to retired civil servants.
States
have $445 billion in unfunded obligations to help retirees pay for
health insurance, and local governments have obligations that surpass
the $500 billion mark. Governments may now be forced to cut benefits
or raise taxes in order to deal with the issue. (No federal agency is
required to make payments for the health care costs of its future
retirees, as the Postal Service is.
In comparison, the Postal Service is required under the Postal Accountability and Enhancement Act to make an annual payment between $5.4 to $5.8 billion, from 2007 to 2016, into the Retiree Health Benefits Fund to cover future
retiree health care costs. This helps to assure that the money will be
there, when the time comes, regardless of the Postal Service's
financial picture, to satisfy its health care obligations to its
retirees. Already, there is over $32 billion in the Fund.
Additionally, USPS makes a separate annual payment to the Office of
Personnel Management for its current retiree health benefit premiums, of about $2.3 billion.
The
problem -- where Congress went wrong -- is that the USPS payment
schedule that Congress set in 2005 was based upon the then-current
economic conditions -- reflecting a health economy and a healthy USPS
-- and not the deep recession of today, which has cratered USPS.
That's why HR 22,
which would afford reasonable financial relief to the Postal Service,
would permit USPS to make its payments for current retiree health
benefit premiums out of the Retiree Health Benefit Fund. This
accelerates the approach that is already envisioned in the PAEA after
2016.
Cut Postal Services, Don't Hike Stamp Prices, Americans Say
A new Gallup Poll
reveals that a majority of Americans prefer cutbacks in postal service,
such as ending Saturday mail delivery and closing post offices -- to
either government assistance or higher stamp prices. (The US Postal
Service announced
on February 10 new postal rates for 2009 including a two-cent increase
in the price of a First-Class Mail stamp to 44 cents. Prices for
mailing services are reviewed annually and adjusted each May. The new
prices will go into effect Monday, May 11.)
According
to the recent Gallup poll results, Americans --whether they later
regret it or not -- seem willing to forgo some of the Postal Service
conveniences they have become accustomed to, as opposed to paying to
keep those services directly (through higher stamp prices) or
indirectly (through taxpayer funds). This is an attitude shared widely
by Americans of nearly every demographic or attitudinal characteristic,
Gallup says.
With only 27% preferring government assistance --
something the post office has not received since 1982 -- and 14%
preferring significantly higher stamp prices, Americans appear more
than willing to give up some of the conveniences the Postal Service has
long offered, including six-day-a-week delivery and thousands of local
post office branches.
It
is possible the limited support for government funding of the Postal
Service may reflect concern over the vast amounts of money Washington
is spending in an attempt to revive the economy and help out struggling
industries. The poll provides some support for this idea, as those who
said they were "very closely" following news about the economic
stimulus plan Congress was debating favored cuts in postal services
over government funding by a 43-point margin (64% to 21%). That
compares to a smaller 25-point margin (54% to 29%) among those who were
less attentive to the stimulus debate.
Bruce Moyer
NAPS Legislative Counsel