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Senate to Debate Postal Service Benefits Amendments

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Members of the Senate are showing bipartisan interest in changing U.S. Postal Service benefits programs as they try to shore up Postal Service finances.

Earlier this week, supporters of S. 1789, a Postal Service change bill introduced by Sen. Joseph Lieberman (Independent-Conn.), rounded up 74 votes for a “motion for cloture” — an agreement to limit debate on the bill and let it get an up or down vote on the Senate floor.

Senate leaders have now “vitiated” the cloture motion agreement and scheduled debate on S. 1789 amendments for Tuesday.

S. 1789 supporters say quick action is needed because the Postal Service has a $9.2 billion deficit and, in theory, might be in such dire straits by August that it would have to shut down if it were an ordinary private company.

Postal Service officials say the agency is facing serious problems partly because of customers’ shift to the Internet, partly because it is carrying large and mounting retiree pension and health benefits obligations, and partly because of a federal law that requires the Postal Service to reserve for retiree health benefits.

S. 1789 would let the Postal Service use some of the payments it has made to the Federal Employees Retirement System to pay for early retirement programs and other programs aimed at reducing the size of the Postal Service workforce.

The bill also could let the Postal Service work with unions and the U.S. Office of Personnel Management (OPM) to get postal workers out of the Federal Employees Health Benefits Program (FEHBP) and put them in a new, leaner health benefits program.

Policymakers interested in health reform often have pointed to the FEHBP as an example of what a successfully reformed U.S. health care system could be like, but Postal Service officials argue that the FEHBP is richer and more expensive than it ought to be.

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The Senate S. 1789 debate agreement calls for the Senate to take up S. 1789 bill Tuesday, debate a number of proposed amendments, then vote on passage of the amendments and the bill. The bill would need to get 60 votes to pass.

One of the proposed amendments that would be debated would be S. Amendment 2061. Sen. Tom Coburn, R-Okla., the sponsor of that amendment, wants to require that Postal Service employees who are eligible for retirement to actually retire and not work part-time or on a temporary basis for the Postal Service.

In the past, some labor policy experts have suggested that older employees should be able to participate in “phased retirement” programs that would allow them to shift to part time or seasonal schedules as they shift toward full retirement.

Another amendment to be debated, S. Amendment 2074, was proposed by Sen. Jay Rockefeller IV, D-W.Va. That amendment would require the benefits provided by any new Postal Service health plan to be comparable to FEHBP benefits.

The Obama administration budget for fiscal year 2013, which starts Oct. 1, 2013, would let the Postal Service put off retiree health benefits funding payments in 2011, 2012 and 2013, according to analysts at the Senate Republican Policy Committee.

The Congressional Budget Office (CBO) estimates S. 1789 would add $6.3 billion to the federal budget deficit during the 10-year period starting in 2012. The Postal Service inspector general estimates that, if more accurate assumptions and scoring rules were used, the bill would cut the real deficit by about $18 billion.