GSA
Floor Speech
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Ms. COLLINS. Madam President, before my friend and colleague from Maryland leaves the floor, I wish to thank her for her passionate advocacy on behalf of her constituents. I have a similar problem in my home State of Maine, where a processing center has been targeted for closure that would have an extraordinarily detrimental impact on mail delivery for two-thirds of the State of Maine. It makes no sense whatsoever. It would do away with overnight delivery, as the Senator has indicated.
I would encourage her to continue to work with us and also to look at the specific provisions we have put into the substitute that reflect the input we have had from her and many other concerned Senators. One of those standards deals with the overnight delivery and the need to maintain that standard of service.
This is an advantage the Postal Service has, and it helps it keep customers. In my view, to do away with overnight delivery would be foolhardy, and it would actually cause more mailers to leave the Postal Service, which would produce a further decline in volume and, thus, revenues would plummet still further.
I understand a lot of the concerns the Senator from Maryland has raised. I do think we have taken care of some of her concerns in the new substitute we have proposed on a bipartisan basis. But we look forward to continuing to work with her to address her concerns.
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Ms. COLLINS. Madam President, I wish to discuss in more detail a key provision of the postal reform bill that is before us; that is, the provision that would refund to the Postal Service an $11 billion overpayment that the Postal Service has made to the Federal Employee Retirement System.
This is the key provision of our bill because part of the money from that refund would be used to finance the buyouts and retirement incentives the Postmaster General has estimated would allow him to decrease the size of the workforce, in a compassionate way, by about 100,000 workers.
The Postal Service has about 600,000 workers, just to give an idea of how many we are talking about. So it is about 18 percent. That would help the Postal Service right size. It is patterned on the practices many private corporations use when they find they need to downsize. They provide a little incentive for people to retire early or to retire. If they are eligible for retirement, it gives them a little incentive to take advantage of that.
I am convinced this will work because more than 33 percent of postal employees are eligible for retirement right now. We use the standards that are in current laws. The retirement incentive cannot exceed $25,000. That is in current law for Federal agencies to use, and we would extend that so it is capped to postal employees.
We also would allow the Postal Service to give 1 year of retirement credit for someone who is 1 year short of the necessary number of years under the old Civil Service Retirement System, 2 years under the newer FERS system.
But yesterday I heard one of our colleagues describe this refund of $11 billion as being an overpayment that will come from taxpayer pockets. That is not an accurate statement. I realize this bill is very complex. So I wish to provide to my colleagues some additional information. They do not have to just take my word for it; they can take the word of the inspector general of the U.S. Postal Service.
The FERS system does have tax dollars in it from Federal agencies that are paying in for their employees and, of course, the employees also contribute to the system. But when it comes to the Postal Service, the money is not coming from taxpayers. The contributions are not coming from taxpayers. They are coming from postal employees themselves, and they are coming from the Postal Service, which is using its revenue from postage and other services and, thus, it is the ratepayers' money.
The inspector general makes this very clear in his letter. I ask unanimous consent that this letter be printed in the Record.
There being no objection, the material was ordered to be printed in the RECORD,
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Ms. COLLINS. Madam President, the Government Accountability Office has also looked at this issue and found that OPM's Actuary did assess that there was an overpayment--what GAO calls a surplus.
There is one paragraph in the GAO letter that I particularly want to bring to my colleagues' attention because it is a call for action. The Comptroller General says:
We have also reported that Congress and USPS urgently need to reach agreement on a comprehensive reform package to address the Postal Service's financial problems. Congress could consider a one-time return of some, or all, of the FERS surplus as part of a broader package tied to specific actions on the part of USPS to help it address its financial problems. These actions could include prefunding its retiree health benefit obligation, reducing its $13 billion debt, or developing incentives to reduce its workforce.
Madam President, that is what our bill does. We are following the advice of the GAO to do this one-time refund of the overpayment and dedicate it specifically to the incentives to reduce its workforce and to reducing the debt the Postal Service owes to the Treasury. We also deal with the prefunding of the retiree health benefit issue in our bill as well.
My point is that there is agreement that this is not taxpayers' money. There is agreement that this is a true overpayment. And we have GAO suggesting that we do exactly what this bill does, which is the one-time refund of the overpayment, tied to reform to address the USPS's financial crisis and specifically mandating that the money be used to develop incentives to reduce the size of the workforce and pay down its debt.
I wanted to take this time today to explain this issue because I am very concerned that there are Members who are operating on the basis of a complete misconception that somehow this is a taxpayer bailout or that it is taxpayer funds that are being used to repay this overpayment. That is not accurate.
This bill is very complicated, and I hope we can stick to the facts as we debate it. People may have different views on the way forward or the path forward, but I hope we can keep this free from mischaracterizations about the bill. I understand how it is going to happen because it is a complex matter. That is why we have spent, on our committee, so many months carefully studying this issue and getting help and expertise from GAO, OPM, and outside parties to make sure--and from the IG--we fully understand the provisions of the bill.
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Ms. COLLINS. Mr. President, I, too, want to comment on this issue of the prefunding for the health care benefits of future retirees. I think it is important to note that when the 2006 law was written, the Postal Service supported this provision because it recognized that it had a huge unfunded liability for future health benefits and it knew it was important to start putting money aside to ensure that at the time those retirees needed to claim those benefits, the money would be there and the promises would be kept.
It was also important because we wanted to avoid the possibility of a system going into default and taxpayers having to step in to keep the promises the Postal Service has made.
The fact is the current liability is about $46 billion for those retiree health benefits, the future retiree health benefits. That liability is a very real one. It is not going away. Nevertheless, we have taken steps in our bill, as Senator Lieberman has described, to ease the funding by setting up a 40-year amortization schedule and by changing the discount rate. So those two provisions should save the Postal Service approximately $2 billion--the exact number would be determined--each year, and that is obviously very welcome.
But I do want to address what I believe is another misconception, and that is that the funding for future retirees' health benefits is somehow the cause of the Postal Service's financial crisis. It is not. The fact is that the Postal Service has not made its payment of $5.5 billion that was due to this fund in either of the last 2 fiscal years. Yet the Postal Service lost billions in both of those years, despite not paying the $5.5 billion that was due to this fund. In total, the Postal Service has made only $6.9 billion of the $16.4 billion that was required in prefunding payments for the past 3 years, but has posted losses, total losses for those 3 years of $26.9 billion.
So it is certainly true that we can and should ease the funding requirement in light of the problems of the Postal Service. It is also true that we don't need to fund to 100 percent, which the 2006 law requires. If my memory serves me correctly, I believe we have lowered the funding level to 80 percent. Those provisions all have a substantial impact on lowering the annual payment.
I have two final points I want to reiterate. The prefunding requirement is not the cause of the Postal Service's financial crisis; and second, that $46 billion liability is very real and it is not going away. Indeed, stretching out the amortization schedule, which I believe we should do, is going to actually cause that liability to increase because we will be paying it over a longer period of time.
Nevertheless, I think the changes that have been made in the funding for future retirees' health benefits make sense. I think they are financially responsible and they will provide some needed relief to the Postal Service without exposing taxpayers to the possibility of having to pick up the tab and without breaking the promise that has been made to postal employees.
Thank you, Mr. President.
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