Democrats' bill delays Postal Service payment

Reuters News
Posted: Sep 12, 2011 4:08 PM
Democrats' bill delays Postal Service payment

By Emily Stephenson

WASHINGTON (Reuters) - A group of Democratic lawmakers introduced legislation on Monday that would allow the cash-strapped U.S. Postal Service to delay for 90 days a massive upcoming payment for retiree health benefits.

Postmaster General Patrick Donahoe has said the mail agency will default on the $5.5 billion payment, due at the end of September. The Obama administration wants Congress to extend the due date while it crafts an agency overhaul, an official told lawmakers last week.

"This measure will ensure that the Postal Service and Congress have additional time to work together on comprehensive legislation to improve the Postal Service's long-term viability," Representative Stephen Lynch, one of the bill's sponsors, said in a statement.

The Postal Service, which lost more than $3 billion last quarter, has struggled to adapt as consumers correspond by email and pay bills online. The economic recession exacerbated the drop-off in mail volume.

The agency says personnel costs are a large burden, pointing to the massive payment Congress requires each year to pre-fund expected future health care costs for postal retirees.

Lynch and several other lawmakers have introduced other pieces of legislation offering a range of longer-term remedies. Proposals include cutting Saturday mail, allowing the Postal Service to use cash from an estimated surplus in its retirement fund to pay bills, and giving it more freedom to lay off workers.

Other lawmakers intend to introduce bills as well, according to a statement from Democrats on the House of Representatives Oversight Committee. The White House plans to introduce its own proposal in the next few weeks, Office of Personnel Management Director John Berry said last week.

The Postal Service has taken a number of actions of its own, announcing that it would study more than 3,600 post offices for possible closure and asking Congress to consider letting the agency take over health benefits for employees.