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Is D.C. takeover a model for the U.S. Postal Service?

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Even before he was officially in a position to do much about it, Rep. Darrell Issa, R-Calif., was adamant that the U.S. Postal Service needed to cut costs faster and deeper. After Issa became chairman of the House Oversight and Government Reform Committee this January, the looming question was just how he would push that agenda.

The answer: Treat America’s biggest mail carrier like the District of Columbia.

Back in the mid-1990s, the Republican-controlled Congress set up a “board of control” that essentially stripped the district of home rule with the goal of putting its problematic finances in order.  Now, Issa wants to do something similar for the Postal Service, with the creation of a panel that could override the postmaster general, void union contracts, and basically prod the mail carrier to do whatever it takes to return to solvency, according to a newly introduced 132-page bill.

Here’s how it would work: If the Postal Service defaults on any obligations to the federal government (and an oversight committee spokesman confirmed that this would include the billions of dollars in prepayments into the USPS retiree health care fund due each September), it would quickly slide into what the bill delicately labels as a “control period.”

The President would then name a five-member commission (officially known as the Postal Service Financial Responsibility and Management Assistance Authority) that would assume overall management  responsibility. Among other powers, the authority would approve the Postal Service’s budget and hire and fire top managers. Its tour of duty would end only when the Postal Service made it through two consecutive fiscal years in the black.

The bill would also give the Postal Service a green light to go to five-day-a-week delivery. But from the perspective of current USPS management, which desperately wants such authority, that appears to to be its only major positive. In  a news release, agency leaders expressed disappointment that the legislation wouldn’t eliminate the prepayment requirement and that it “would create more government bureaucracy and slow our progress on streamlining our operations.”

The agency adds that it’s not really interested in another $10 billion in Treasury borrowing authority that the legislation would provide.  While the expanded line of credit would be available only during the control period subject to the authority’s approval, “the Postal Service does not need to incur additional debt–we need the money back that is already owed to us,” the release says in an allusion to overpayments into its pension program identified by the USPS inspector general and an outside actuarial firm.

In case anyone’s forgotten, incidentally, the Postal Service stopped paying employer contributions into the Federal Employees Retirement System last Friday as a way of holding on to more of its fast evaporating cash.

No hearing or markup on Issa’s legislation has been scheduled at this point.

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Comments

  1. Fan the Flames Says:
    June 28th, 2011 at 8:09 am

    A Republican is recommedning the expansion of government and government regulation along with increasing the loan limit by $10 Billion dollars. Meanwhile, you have a government agency requesting chnages that allow it to shrink (I believe that’s called smaller government) without wanting to take on more debt. Strange twist on what the congressman says versus wants to do.

  2. robertP Says:
    June 28th, 2011 at 10:21 am

    The USPS has over 300 processing plants. When mail volume was still growing, back before 2005, these plants were all needed. Now that mail volume has shrunk by over 17%, around 100 of these plants could be closed, with operations consolidating into the larger plants. Operations would be much more efficient. Yearly savings would approach $1 billion, with savings due to reduced employees, maintenance, utilities, building upkeep and repair, transportation and administration.

    Why aren’t these plants closing at a faster rate? Congressional interference plays a major role. Representatives and Senators bellow loudly when a plant (or post office) in their district/state is targeted for closure. Amendments are made to bills to uniquely protect individual plants or post offices from closings. The 2006 Postal Act added another layer of bureaucracy called the Postal Regulatory Commission (PRC), which now bellows along with Congress to halt or hinder closures of unneeded facilities.

    If Congress would get out of the way, the leaders of the USPS could quickly right the ship, providing a leaner, much more efficient service, that could continue to provide quality service for all Americans for years to come.

  3. chrisk Says:
    June 28th, 2011 at 7:11 pm

    Rep. Issa: GIVE US BACK OUR MONEY WE OVER PAID!!!!!!!

    The USPS was in the black until we had to over pay into the CSR and FERS retirement programs and pre pay for possible future retiree health care. No other Government agency has had to do this. So again, I say, GIVE US BACK OUR MONEY! Unless you can’t since you or others spent it on your pet projects such as bank, insurance, and auto, bailouts.

  4. jerry Says:
    June 28th, 2011 at 7:12 pm

    The United States only has ONE Vice President! Why does the Postal Service have 21??????

  5. jerry Says:
    June 28th, 2011 at 7:14 pm

    My Post master works 10AM til 3PM and makes 80,000 a year, maybe the problem is there are 7 layers of management all doing this!!!!!

  6. OG Says:
    June 28th, 2011 at 9:39 pm

    It is a little odd that the Issa/Ross bill say nothing about the FERS/CSRS overfunding. It is true that OPM followed the legal mandate as set in 1974 when calculating the pension funds, but USPS ended up spending $50-75 billion more than it should have. This money should be refunded to USPS and used to pay-off the draconian healthcare prefund requirement. Issa/Ross only needs to recognize this as the most obvious solution. The $5.5 billion yearly payment placed a burden on USPS especially when it needed fiscal flexibility. Issa/Ross obviously believe the problem would be solved with more unnecessary regulations and by halting the collective bargaining process. Perhaps Issa can be convinced to propose a $75 billion earmark payable to USPS. But then again, that may be perceived as a moral hazard. The Issa/Ross proposed bill should at least make for an entertaining reading.

    OG

  7. TERRY Says:
    June 28th, 2011 at 10:54 pm

    JUST HAND ME 80% FOR MY RETIREMENT AND I’M GONE.

  8. Barbara Says:
    June 29th, 2011 at 8:23 am

    That’s a huge problem, my office has only 27 employees working on any given day and 3 managers. With over $200,000. a year going out the door to support these three people who collectively don’t do 8 hours of work a day, how can the post office survive? No where in the private sector will you find this ratio. USPS, Get moving on removing the layers of useless management

  9. Steve Says:
    June 29th, 2011 at 4:39 pm

    I see most people still have that thought of its all about me. Sad, this is why our unions are failing. No one is willing to stand up and fight the fight. Give you your 80% your a real crumb. Closing plants great idea, But again where are the savings- there is none. Craft employees will be moved, most of the plants are owned, Wow wait I just thought of the true cost savings – its the electric bill. Your all a bunch of sheep, just keep following and keep those complaints coming.

  10. Kathy Says:
    July 16th, 2011 at 9:14 pm

    We need 5-day delivery. We can’t hire TRCs. No one wants to work just Saturday.

  11. James Says:
    July 22nd, 2012 at 8:00 pm

    The Unions need to get together and file a class action lawsuit to get our over paid money back. The postal inspectors, opm, 2 audit teams say the money has to be there. The postmaster general says the money is not there. If it is not there than tell us where it is. Why keep paying 5.5 billion each year if somebody is just stealing it. This is no different than the RICO act when money was embezzled from companies and unions by the mobsters. Maybe our mobsters are named Issa, Ross, and Donahue. Let’s bring this out in the open. It is public record and we have a right to know.