Sounds crazy, but with a bit of accounting help from Congress, the U.S. Postal Service could go from pauper to prosperous faster than an Express Mail package. Even though the Postal Service is $13 billion in debt, has stopped making certain payments into the federal retirement system, and is projected to become insolvent and lose another $8 billion this year, it could happen. Because over the last 40 years, USPS has overpaid between $50 and $70 billion into the U.S. Treasury, or so says the agency and its independent regulators. Several bills are pending in Congress that could release these funds to the agency. Read on for the details.
The Postal Service's massive retiree health benefits pre-funding obligations would be solved by H.R. 1351, entitled "United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011." The bill was introduced by Rep. Stephen Lynch (D-MA), and it would require the Office of Personnel Management (OPM) to recalculate the Postal Service's past, present, and future Civil Service Retirement System (CSRS) pension obligations. If the recalculation, using an updated methodology that is more favorable to USPS, results in the determination that USPS has paid in more than required, the surplus would be used to cover its pre-funding obligations for retiree health benefits. Problem solved -- done and done!
Similarly, S.1010, entitled "Postal Operations Sustainment and Transformation Act of 2011," introduced by Sen. Tom Carper (D-DE) would also solve the Postal Service's pre-funding problems. This bill would direct OPM to re-determine annually any postal surplus or liability to the Civil Service Retirement and Disability Fund and transfer any surplus to the Postal Service's retirement health benefits fund.
Instead of trying to fix the Postal Service's financial problems by finding a new pot of money, a bill introduced by Rep. Darrell Issa (R-CA) would try to solve the problem by sending it into receivership. Under "The Postal Reform Act of 2011," upon the Postal Service's failure to make a required payment to the U.S. Treasury, a newly created Postal Service Financial Responsibility and Management Assistance Authority would take over. This Authority would have ultimate power over the agency, and could overrule USPS management and the USPS Board of Governors on any fiscal matter. Most notably, it would have the power to require the renegotiation of existing collective bargaining agreements with postal unions to obtain specific economic savings and workforce flexibility.
So while the Postal Service is currently in dire financial straits and headed to certain insolvency in the next few months, bills are pending in Congress that could transform the Postal Service from a pauper to a prosperous (or at least solvent) agency. Once that problem is fixed, the next challenge for the Postal Service will be finding its proper role in the digital age.