The White House has proposed a series of steps to right the ailing Postal Service including giving it a $69 billion refund over two years stemming from surplus payments into the Federal Employees Retirement System.
Additional steps – included in the President’s plan for economic growth and deficit reduction — would include restructuring the Postal Service’s retiree health benefits prefunding obligations in such a way that would move them to an accruing costs basis and reduce near-year payments, allowing the USPS to move to a five-day delivery schedule, granting it the authority to offer non-postal produces and increase collaboration with state and local governments.
The White House’s postal reform proposal also includes giving the USPS the authority to better align postage and mail delivery costs while still operating within the current price cap, and permitting it to seek a small one-time increase in postage rates it proposed a year ago.
The proposals are similar to changes that postmaster general Patrick Donahoe has requested and arrive at a similar savings target of $20 billion over the next several years.
The White House stopped short of endorsing the USPS’s plan to pull out of the federal employee health plan in favor of its own plan, as well as its effort to get around collective bargaining provisions that would prevent it from reducing its workforce by a targeted 220,000 employees by 2015.
Regardless of how several postal reform plans under consideration in Congress pan out, the Postal Service has made it clear it will aggressively downsize, including by closing up to 3,700 post offices and consolidating or closing processing facilities, getting rid of processing equipment and scaling back its transportation network.
