National Association of Postal Supervisors
Legislative and Regulatory Update - November 13, 2008


In This Issue:



The Future is Now, USPS Seeks to Realign Its Retiree Health Benefit Obligations

Looking to defray its operating costs, the Postal Service is seeking quick Congressional relief from its obligation to pre-fund future retiree health benefits, by redirecting a portion of the amount it pays for future retiree health benefits costs to cover its current employer's share for retiree health benefit premiums.  The Postal Service is seeking Hill approval of the payment arrangement before the end of the 110th Congress.

USPS payments for future retiree health benefits represent a considerable financial obligation.  In FY2008, USPS made a $5.6 billion payment into the Retiree Health Benefits Fund (RHBF) to pre-fund retiree health benefits.

The arrangement the USPS is pushing on Capitol Hill would reduce the amount the Postal Service pays into the RHBF by $2.3 billion in FY 2009, and $28.1 billion through 2016.  The Postal Service's pre-funding payments after 2016 would grow in order to make up the difference.

Currently, the Postal Service pays approximately $2.3 billion a year to OPM for the employer share of health benefits for retired postal workers, and approximately $5.4 billion annually into the RHBF for future retiree health benefits.  The pre-funding rearrangement was imposed by the Postal Act of 2006 in order to assure that the Postal Service retained the means to satisfy its massive future retiree health benefit obligations, especially in light of the escalating costs of health care and uncertainty over future USPS finances. 

There is good reason for changing the funding arrangement, given the financial crisis the Postal Service faces.  Reflecting the deepening recession, the Postal Service announced today that it had experienced its largest single-year decline in postal volume in its history.  USPS Chief Financial Officer Glen Walker reported to the Board of Governors that postal volume was down by 9.5 billion pieces from 2007 levels, a decline of 4.5%.  Standard Mail dropped 4.3%, Shipping Services fell 3.3%, and Periodicals edged downward 2.2%.

The Postal Service ended FY08 with a $2.8 billion net loss, aggravated by the $5.6 billion payment required by the Postal Act of 2006 to pre-fund retiree health benefits.  The good news was that the Postal Service continued to improve national on-time First-Class Mail delivery performance, reaching record highs in FY 2008.

Due to cutbacks in overtime and shift schedules, the Postal Service also reported that it reduced work hours (which constitute a hefty portion of postal costs) by 50 million work hours.

Looking ahead to 2009, Walker indicated that the worsening economy will add more red ink to the USPS bottom line, forcing volume downward by another 8 billion pieces.  Walked also indicated that USPS will pursue an "unprecedented focus on across-the-board cost reductions."


Leadership Changes of Postal Oversight Committees Possible

Dramatic changes in the leadership of the Congressional committees that oversee the Postal Service could come about next week, when Congress returns to Washington for a lame duck session and party caucuses meet.

Committee chairmanships are put to a vote of the party membership in each legislative chamber by a secret vote, after recommendations have been made by the party's leaders.

In the House, Rep. Henry Waxman (D-CA), the current chair of the House committee with oversight of the Postal Service, has challenged Rep. John Dingell (D-MI) for chairmanship of the influential Energy and Commerce Committee.  Waxman is currently chairman of the House Oversight and Government Reform Committee and the second-ranking Democrat on the Energy and Commerce panel. 

Waxman's challenge for the E&C chairmanship marks a major showdown between two Democratic powerhouses, with implications for a host of major legislative initiatives next year, from health care to global warming to renewable energy. 

The contest has highlighted an ideological rift within the Democratic party and its senior leaders.  Dingell's close ties to Detroit automakers and utilities have continually put him at odds with the party's liberal leadership, including House Speaker Nancy Pelosi (D-CA) over climate-change initiatives such as higher fuel efficiency standards for cars and caps on carbon emissions. Waxman has been tenacious in his leadership of the House Oversight and Government Reform Committee, using the wide authority of the committee to scrutinize the Bush Administration, pursue inquests into its conduct of the Iraq war, White House political operations and regulatory failures behind the financial collapse.

If Waxman wins the Energy and Commerce post, Rep. Edolphus Towns (D-NY) could become the chairman of the Oversight and Government Reform panel.  However, Towns' support for Dingell could become problematic if Waxman wins the Energy Committee post.  Rep. Paul Kanjorski (D-PA) and Rep. Carolyn Maloney (D-NY) follow Towns in seniority.

The current chairman of the House subcommittee with direct oversight of the Postal Service, Rep. Danny Davis (D-IL), could also give up the subcommittee gavel, if he is named to the Illinois Senate seat that will be vacated by Sen. Barack Obama.  Davis is reported to be one of several members of Congress from the Chicago under consideration by Illinois Governor Rod R. Blagojevich, including Rep. Jesse L. Jackson Jr. (D-IL), Rep. Melissa Bean (D-IL), Rep. Luis V. Gutierrez (D-IL) and Rep. Jan Schakowsky (D-IL).

On the Republican side of the House Oversight and Government Reform Committee, Rep. Darrell Issa (R-CA) has announced his campaign to secure the ranking Republican slot on the panel after his leading rival for that post, Rep. Chris Shays (R-CT), lost his re-election bid last week.

In the Senate,the chairmanship of the Senate committee that oversees the Postal Service -- the Homeland Security and Governmental Affairs Committee -- could shift, but that outcome is far from certain.  Some Senate Democrats have called for the ouster of Sen. Joe Lieberman (ID-CT) from the committee chairmanship, due to his attacks against President-elect Obama during the presidential campaign and his endorsement of Republican nominee Sen. John McCain (R-AZ).

Momentum to strip the gavel from Lieberman appears to be losing ground, however, and he is not expected to be ejected from the Democratic caucus.  CQ reported yesterday that Senate Majority Leader Harry Reid (D-NV) met with Lieberman last week and offered him the gavel of the Small Business and Entrepreneurship Committee, but Lieberman rejected the compromise proposal.

If Lieberman loses the HSGAC chairmanship, next in line is Sen. Carl Levin (D-MI), but Levin is considered unlikely to give up his chairmanship of the Armed Services Committee.  Levin is followed in seniority by Sen. Daniel K. Akaka (D-HI), although Akaka would have to give up his current chairmanship of the Veterans' Affairs Committee.  That means that the HSGAC's fourth-highest-ranking Democrat, Sen. Thomas R. Carper (D-DE), who currently chairs the postal oversight subcommittee, could vault to the full committee's lead post.

Sen. Susan Collins (R-ME), who was reelected to a third Senate term last week, is expected to remain the ranking Republican on the HSGAC, though her name has been mentioned as a potential pick by the Obama Administration to the Homeland Security Department cabinet post.

In the Senate, with the pickup of six, and potentially nine seats once all the votes are counted, Democrats will be able to add at least one extra seat to their majority on every committee.  If they were to win all three of the undecided Senate races, they could make an argument to increase their committee majority from two seats to three, but Republicans have the ability to filibuster any organizing resolution setting committee ratios.

Either way, Republicans could try to expand the total number of Senators permitted to sit on committees so their members could preserve their seats. If the total number of seats on each panel remained the same, many less-senior Republicans would be forced to give up their committee assignments to make room for the larger Democratic majority.


Looking for Tickets to the Inauguration?

Landing a seat at President-elect Barack Obama's inaugural swearing-in ceremony on January 20 has become the hottest ticket in Washington, the Washington Post reports. 

Tickets to the swearing-in ceremony are being distributed by House Members and Senators of the 111th Congress.  If you're interested in getting a ticket to the Inauguration, contact your House Member or Senator.  Some are still taking constituent requests.  Others, due to the high volume of requests already received, are no longer accepting requests. 

A standing area for individuals without tickets will remain available, and information on this and other alternative attendance options can be found at inaugural.senate.gov.


Transition Quick Links

The Obama Transition Website  

Want a Job in the Obama Administration?
The Guide to Jobs: The 2008 Plumbook  
Questionnaire for Job Applicants in Obama Administration

Speedup the Transition, Says 2007 NAPS Legislative Conference Keynoter Donna Brazile

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Bruce Moyer
NAPS Legislative Counsel