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National Association of Postal Supervisors
Legislative & Regulatory Update
NAPS Leg/Reg Update - August 1, 2011
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Back to Code Blue
The dust is settling on what's just happened in Washington.
History has been made. The Age of Austerity in the United Sates has begun.
What does the new debt reduction legislation, whose protracted birth over the past week portrayed Washington at its worst, mean for the United States Postal Service?
Good news and bad news. First the good news. Because the Postal Service is "off-budget," (or not part of the federal budget), the Postal Service is immune from the punishing, arbitrary cuts imposed on the rest of the federal government by the debt legislation -- the "Budget Control Act of 2011". (The Postal Service went off-budget in 1989.)
The bad news is that the debt legislation doesn't throw a lifeline to the Postal Service, given its dire financial straits. Although the White House attempted two weeks ago to include the Postal Service in its "grand bargain" proposal, those efforts failed.
All this means that the Postal Service is back to Code Blue. September 30 is approaching and the Postal Service is showing every sign of refraining from writing the $5.5B check for its retiree health benefit obligations that is due -- in order to stave off insolvency.
Congress could yet throw a lifeline to the Postal Service sometime this fall, but with a price, potentially involving legislation introduced by Rep. Darrell Issa (R-CA), that would essentially throw the bankrupt Postal Service into receivership.
Finally, does the debt legislation affect postal employees? Here again, the answer is yes, but not directly. Dreaded cuts in civil service retirement and health insurance benefits themselves are not mandated by the debt legislation. However, benefit cuts eventually are likely and are still in the mix.
The second stage of budget cuts mandated by the debt law -- coming in December out of the Joint Committee's recommendations on $1.5 trillion in spending cuts -- could include proposals that have been circulating for months. These could include increasing the employee contribution for retirement, reducing retirement benefits by changing the way those benefits are calculated, increasing employee contributions for health insurance, and making cost of living adjustments less generous for all retirees. There is a small glimmer of hope: a White House fact sheet on the debt legislation suggests that federal pensions could be exempt from the across-the-board cuts that would be triggered by the legislation if Congress fails to approve the Joint Committee's recommendations.
Many in Washington are still deciphering the perilous path of pitfalls created by this new legislation. There are certain to be more brinksmanship moments over further spending cuts down the road, though those moments are unlikely to be as calamitous as a government default could have been.
Looking back on the past week, the Republic still endures, but with a black eye, and a waistline about to begin a take-no-prisoners diet.
NAPS Legislative Counsel
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National Association of Postal Supervisors Postal Legislative/Regulatory Update January 29, 2010 In this Issue:
NAPS Alerts Congress to Possible Pay Abuse by USPS Postal IG Says USPS Overcharged by $75 Billion Lynch Proposal Would Provide FEHBP Drug Oversight -----------------
NAPS Alerts Congress to Possible Pay Abuse by USPS
The National Association of Postal Supervisors has warned key Senate and House leaders of potential abuse that may occur in the Postal Service's administration of its pay-for-performance system covering 75,000 USPS managers, supervisors and postmasters. Such abuse, NAPS projects, could result in a salary loss of at least $500 to $800 by each affected employee, effective February 5.
In letters to the chairmen of the Senate and House panels that oversee the Postal Service, NAPS President Ted Keating warned, "Based upon anecdotal information learned by our members in the field, we have reason to believe that lax enforcement by upper-level management within the Postal Service of pay-for-performance goals could arbitrarily reduce the performance assessments and salary increases of an unspecified number of management employees ... Any action by the Postal Service that revises performance goals at the end of a performance period unfairly moves the goalposts and undermines confidence in the validity of pay-for-performance."
The Postal Service on February 5 is slated to provide notification to each management employee of his or her 2009 increase in base salary, based upon the attainment of pre-set performance goals and objectives under the National Performance Assessment (the USPS pay-for-performance system) for the 2009 fiscal year, which ended September 30, 2009. Those performance goals have been set through a negotiated pay agreement reached between the Postal Service, NAPS and the two other management associations. The pay agreement conditions a management employee's receipt of any annual salary increase upon that employee's success in achieving or exceeding the pre-set performance goals and objectives.
NAPS is strongly encouraging all its members and other EAS employees who believe their performance goals to have been wrongly adjusted, once they receive word of their salary adjustment on February 5, to file an appeal through eRecourse, the USPS internal appeal process. For Information on eRecourse and filing an appeal, click here.
"eRecourse will be our member's first avenue of appeal," Keating explained. "If any improper adjustment of pre-set goals is not made right through eRecourse, we will go to Congress for correction," he promised.
In recent letters to Sen. Tom Carper (D-DE) and Rep. Stephen Lynch (D-MA), Keating noted that NAPS has "received no assurance from the Postal Service that it intends to follow-through and award salary increases based upon the previously-set performance goals -- goals on which management employees aligned their sights and worked hard to attain, achieving some of the highest levels of service attained by the Postal Service."
"While all postal managers and supervisors are deeply concerned about the Postal Service's financial condition, the same concerns did not dissuade the Postal Service from awarding significant salary increases -- in the tens of thousands of dollars -- to many of its executive-level employees during the past year," Keating added.
Postal IG Says USPS Overcharged by $75 Billion
The Postal Service's Inspector General has released a study finding that the Postal Service has overpaid the Civil Service Retirement System by $75 billion over past years. The IG finding of the USPS overpayment comes at a time when the Postal Service is scrambling to find the money to cover billions of dollars in losses, expanded by its future retiree health benefit obligations.
The USPS overpayment also marks the third time in less than a decade that the Postal Service has been overcharged for its pension obligations.
If Congress agrees that the overpayment exists and approves the move of the overpaid monies from CSRS to the Postal Retiree Health Benefits Fund, it would represent a huge windfall for USPS.
As the OIG report notes, if "the overcharge was used to prepay the Postal Service's health benefits fund, it would fully meet all of the Postal Service's accrued retiree health care liabilities and eliminate the need for the required annual payments of more than $5 billion." Also, the health benefits fund could immediately start meeting its intended purpose -- paying the annual payment for current retirees, which was $2 billion in 2009."
Don't say lightning can't hit thrice. In 2002, after years of suggestions by postal officials that it was being required to overpay its pension payments, the federal government acknowledged that the Postal Service was on pace to overfund the CSRS by $78 billion. Congress thought it had corrected that overpayment through legislation in 2003. That same legislation, however, required USPS to pick up the $27 billion tab for CSRS military service credits of its employees. That $27 billion overcharge was subsequently corrected by the 2006 postal reform law. And now, if the USPS-OIG is correct, a third overpayment needs to be reckoned with.
Once again, the unnecessarily complicated and sometimes irrational federal budget scoring rules will likely suggest that the accounting transfer of the $75 billion overcharge from the CSRS fund to the postal retiree health benefit fund "scores" against the federal treasury, thereby contributing to the deficit. That drives lawmakers up the wall.
For NAPS, that means Congressional budget scoring rules should be waived or changed to restore common sense to how Congress operates. NAPS delegates to the upcoming legislative conference in March will send Congress this message: credit USPS for the $75 billion CSRS overpayment and apply those funds to USPS' retiree health benefit obligations. This will help to restore financial stability to the Postal Service so that it continue to serve all Americans with affordable, universal service.
Additional reading:
The Postal Service’s Share of CSRS Pension Responsibility USPS Office of Inspector General, January 20, 2010
Estimates of Postal Service Liability for Retiree Health Care Benefits USPS Office of Inspector General, July 22, 2009
Federal Budget Treatment of the Postal Service USPS Office of Inspector General, August 27, 2009
House Measure Would Provide FEHBP Drug Oversight
Rep. Stephen Lynch (D-MA) has introduced a bill in the House of Representatives that would give greater power to the Office of Personnel Management to bring lower prescription drug prices to employee and retiree enrollees in the Federal Employee Health Benefits Program (FEHBP). The bill, the "FEHBP Prescription Drug Integrity, Transparency, and Cost Savings Act' (H.R. 4489) would require changes in FEHBP drug pricing and contracting methods -- moves that the drug industry is opposing. Congressman Lynch chairs the House Government Oversight committee's Subcommittee on Federal Workforce, Postal Service and the District of Columbia. Lynch says his measure will ensure that "FEHBP is providing our federal employees with the best value for their prescriptions. Through strong oversight provisions that allow for alternative prescription drug benefit contracting and pricing for the FEHPB, my legislation will serve to enhance accountability and transparency relating to the FEHBP drug prescription benefit." aims to “ensure program integrity, transparency, and cost savings in the pricing and contracting of prescription drug benefits under the Federal Employees Health Benefits Program.” If the level of opposition to Lynch's bill from the drug industry corresponds to the real merit of the bill, there should be no doubt about whether it should pass. The bill zeroes in on pharmacy benefit managers (PBMs), who aren't at all happy with the bill. PBMs serve as the middlemen who negotiate drug benefits between the drug manufacturers and the 200 health insurance carriers that provide prescription drugs to the 8 million people covered under FEHBP. The Pharmaceutical Care Management Association, which represents the nation’s PBMs, strongly opposes the measure. Why? Because it would impose greater oversight of what PBMs can do in FEHBP and probably crimp PBM profits. Lynch held hearings last year that raised concerns that FEHBP enrollees were paying 15 to 45% more for drugs than federal military personnel, veterans and other participants in other government health insurance programs. Lynch said at the time that federal employees appeared to be "getting a raw deal on this plan," and said he would move to affect reforms. One of those reforms contained in his new bill would ban PBMs that own or are owned by pharmacy retailers from participating in FEHBP. That would pose problems for CVS Caremark Corp. (CVS), which is owned by CVS. Other parts of the bill would ban drug switching in the program without prior physician approval, impose new disclosure and transparency requirements and cap drug prices paid by the FEHBP at the average manufacturer price. The migraine-producer for the pharmaceutical industry, and especially PBMs: a provision requiring PBMs to return 99% of all the oil that greases their relationship wheels: rebates, market-share incentives and other money received from pharmaceutical manufacturers for FEHBP business. NAPS strongly endorses the legislation. In announcing NAPS' support, NAPS President Ted Keating said, "This legislation provides the kind of health care reform that all postal and federal employees, retirees and their families should expect. OPM needs the power to make the FEHBP work better for all of us. And we need greater integrity and transparency within the drug industry if it deserves to participate in FEHBP. Chairman Lynch's bill will make those things happen." Send a message today to your House lawmaker to urge support for H.R. 4489. Click here to easily send that message to Congress. For more news coverage: Pharmacy benefit managers and the rising drug costs for federal workers Washington Post, Jan. 7, 2010 Bill would boost oversight of FEHBP prescription drugs GovExec.com, Jan. 21, 2010 Drug Benefit Mangers Targeted for More US Oversight Wall Street Journal, Jan. 22, 2010
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Bruce Moyer NAPS Legislative Counsel
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National Association of Postal Supervisors Legislative & Regulatory Update September 24, 2009
Postal Relief Added to Government Stopgap Funding Bill
House and Senate lawmakers have included emergency financial relief for the Postal Service in a temporary government funding measure awaiting House and Senate approval. A vote in the House is slated for Friday, with the Senate to follow.
The postal financial relief provisions -- identical to H.R. 22, as approved by the House on September 15 -- are included in a continuing resolution to keep government operations funded through October 31. The continuing resolution is necessary to extend government funding while Congress completes work on its twelve annual government appropriations bills. In a complicated parliamentary maneuver, the continuing resolution has been added to the House-Senate conference report of the FY2010 Legislative Branch appropriations measure.
The Postal Service relief package contained in the CR reduces the size of the pre-funding payment the Postal Service must make to the Retiree Health Benefit Fund on September 30 from $5.4 billion to $1.4 billion. The reduction covers only the USPS pre-funding obligation for Fiscal Year 2009, which ends September 30. No taxpayer funds are involved, and the relief is not a "bailout." The Congressional Budget Office previously indicated that H.R. 22 will not have an affect on the Federal unified budget.
The savings will provide assistance to the Postal Service in dealing with significant financial problems brought about by the recession and electronic diversion. Future legislation addressing USPS retiree health benefit payments, as well as the underlying health benefit prefunding arrangement, is likely in the months ahead.
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PRC Reviews Station/Branch Closures at Bronx Hearing
NAPS encouraged the Postal Regulatory Commission on Wednesday to balance commercial and public interest factors in determining whether to validate the Postal Service's initiative to close and consolidate hundreds of post office stations and branches.
At a PRC field hearing on Wednesday in the Bronx, New York, NAPS Branch 459 President John Vincenzi told the PRC in testimony:
"The fundamental aim of my organization -- the National Association of Postal Supervisors, as a mangement association of employees of the Postal Service -- is to support the effective and efficient operation of the Postal Service. As such, we are conscious of the tremendous financial pressures the Postal Service faces. We are sensitve to the heightened need for the Postal Service to reduce its costs, while assuring universal service. This is not an easy task. It requires a balancing of commercial and public service factors. This means that the Postal Service must be guided not merely by how postal operations were conducted yesterday, but how they need to be conducted in financially responsible and public-minded ways today and tomorrow. Where the consolidation of postal facilities makes commercial sense, where service to the public will not be adversely affected, where major mailers will not be inconvenienced, and where negotiated agreements and statutory requirements have been satisfied, the Postal Service should be permitted to proceed in undertaking consolidations of its commercial retail network."
The PRC held Wednesday's field hearing in the Bronx, along with another hearing last week in Ohio, to assist in its review whether to validate the USPS effort to close hundreds of post office stations and branches, called the "Station and Branch Optimization and Consolidation Initiative." The latest list of post office stations and branches under review is here.
Bruce Moyer
NAPS
Legislative Counsel
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National Association of Postal Supervisors Legislative & Regulatory Update July 24, 2009
Postal Service Emergency Aid Proposed in Senate Legislation to provide emergency financial relief to the Postal Service was introduced in the Senate on Thursday and is expected to be cleared by a Senate panel within days. The legislation, S. 1507, “the Postal Service Retiree Health Benefits Funding Reform Act of 2009,” was introduced by Sen. Tom Carper (D-DE), chair of the Senate postal oversight subcommittee. Senate sources signaled it could be marked up by the Senate Committee on Homeland Security and Governmental Affairs at its next business session on Wednesday, July 29. Like H.R. 22, a similar (but not identical) measure moving through the House of Representatives, Carper's bill restructures the Postal Service’s obligation to pay its retiree health benefit payments, generating significant savings to the Postal Service over the next several years. The Carper bill also gives USPS more borrowing authority to meet its financial obligations and get through this current fiscal year and next. Action on S. 1507, which is expected to win backing from the White House, comes as the Postal Service faces dire straits. Recently Postmaster General Jack Potter and Postal Service Board of Governors Chairman Carolyn Gallagher notified Congress and officials at the Treasury Department that the Postal Service will not make its $5.4 billion retiree health, pre-funding payment by September 30, as required by law. The Postal Service expects mail volume to be roughly 175 billion pieces this fiscal year, a decline of 38 billion pieces since 2007. The Postal Service is also projecting a loss of $7.1 billion in FY2009 despite achieving $6.1 billion in cuts in costs in the past year.
In a statement released
on Thursday, Sen. Carper said, “The economic slowdown and
the ever-growing electronic diversion of the mail have put a
serious strain on our nation’s Postal Service." “We in
Congress must provide some way to help preserve the vital
services post offices provide for American families and
businesses.”
But Carper warned that his
legislation "is not a silver bullet that will fix
everything wrong with the Postal Service." He encouraged
USPS management to find ways to attract new business and
further streamline operations and said, "Congress and
postal employees need to continue to work closely with
management to keep the Postal Service running smoothly and
reliably.”
FERS Sick Leave Encounters Senate Stalemate
A Senate
amendment -- supported strongly by NAPS and other
federal employee groups -- that would allow FERS employees
to credit unused sick leave toward their retirement, as well
as effect other federal workforce reforms, was withdrawn on
Thursday after the amendment became subject to a filibuster
during Senate consideration of the fiscal
2010 Defense authorization bill. Many
of the terms of the Akaka amendment had been approved last
month by the House of Representatives in its passed version
of the Defense authorization bill. Sen.
Akaka withdrew his own amendment after Sen.
Tom Coburn (R-OK) indicated he would remain on the floor
and filibuster the amendment into the night. To avoid
protracted debate, Sen. Akaka withdrew the amendment and
indicated he would fight for its inclusion when the Senate
and House reconcile the final terms of the defense
authorization.
Bruce Moyer NAPS Legislative Counsel |
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National Association of Postal Supervisors Legislative & Regulatory Update June 24, 2009
House Panel Approves Financial Relief for the Postal Service
The relief is needed because the Postal Service, despite continued cost-cutting, has projected losses of more than $6B this year, due to the devastating impact of the economic recession. On a voice vote, the Subcommittee on the Federal Workforce, Postal Service and the District of Columbia unanimously approved an amended version of H.R. 22, that permits the Postal Service to pay its obligations to its current retirees by tapping into billions it has set aside for future payments. The Subcommittee permitted the Postal Service to realign its health benefit payments for the next three years. The original version of the legislation proposed eight years. The reduction in the length of coverage under the bill was prompted by House fiscal disciplinary rules and a Congressional Budget Office estimate that pegged the bill as costing $12 billion, despite not using a single dollar in taxpayer funds. NAPS President Ted Keating indicated on Wednesday that NAPS will continue to work to secure financial relief for the Postal Service and gain approval of the amended bill by the full House Oversight and Government Reform Committee soon after Congress returns from its 4th of July recess. President Keating also extended his thanks to Subcommittee Chairman Stephen Lynch (D-MA) and the panel's top Republican, Rep. Jason Chaffetz (R-UT), along with Rep. John McHugh (R-NY) and Rep. Danny Davis (D-IL), for their leadership in moving the legislation ahead. Keating also thanked the many NAPS members who have contacted their House Members and helped to add 337 co-sponsors to HR 22. No other legislation pending in Congress has as many cosponsors and such bipartisan support.
NAPS Legislative Counsel source: http://www.naps.org/Legislative_News/LegUpdate_06-24-09.doc |
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National Association of Postal Supervisors Legislative & Regulatory Update June 23, 2009 source: HR 22 Markup Could Miss the Mark; Cover Your Eyes: This May be Messy, 06-23-09 HR 22 Markup Could Miss the Mark
The Postal Service's Office of Inspector General poked another hole yesterday in the unfair and burdensome requirements Congress imposed in the postal reform law on the Postal Service and the payment of its retiree health benefit obligations. Those obligations, in part, are causing the Postal Service to go broke.
The House postal oversight committee is scheduled to markup HR 22 on Wednesday, June 24. But tt is not certain that Subcommittee Chairman Stephen Lynch will push for approval of H.R. 22 and its eight-year period of relief, due to (questionable) cost projections by the Congressional Budget Office.
Cover Your Eyes: This May Be Messy
German Chancellor Otto von Bismarck
said, "There are two things you don't want to see being made: sausage
and legislation." He was referring to all the unappetizing ingredients
that find their way into a tasty wiener that may look great to the
eye, but less so if we knew from whence it came. Bismarck's observation about the legislative process remains alive today. A good example currently in Congress is a measure of strong interest to NAPS members and the postal community. H.R. 22 has earned bipartisan support and gained 321 co-sponsors, more than any other measure in the 111th Congress. It was introduced in January, but, since then, has encountered delays unrelated to its merits. Despite H.R. 22's simplicity-the bill is fewer than two pages-common sense in the congressional treatment of it has been discarded. Congress has become the United States Sausage Factory. H.R. 22 would permit the Postal Service to realign how it pays for its retiree health benefits. It would allow the USPS to save $2 to $4 billion a year over the next eight years, while continuing to make down payments for future benefits.
That meant when the economy began to fall into a recession, the Postal Service went into the red, to an extent because of the size of the multi-billion dollar retiree health benefit payments it had to make and continues to make. So, a fiscal charade for Congress in creating an aggressive payment schedule set the stage for today's scoring nightmare. Scoring again is the culprit. This time, the Congressional Budget Office (CBO) says H.R. 22 would cost $25 billion over the next eight years. Cost who? The Postal Service? No. Ratepayers? No. Then who? The "unified federal budget," CBO says. Because the Postal Service, as a result of its retiree health benefit payment schedule being relaxed, would be less inclined to seek further savings, thereby imposing net costs to the federal budget.
And CBO further finds-and here's where the thinking really goes off the rails-the Postal Service would not adequately offset that amount of the deficit. Why? Because, the CBO predicts, the USPS will take its foot off the cost-savings pedal once it begins to be relieved of its financial obligations.
So, what will emerge from the sausage factory in Washington? It is difficult to say. If Congress disregards the illogical arithmetic of CBO, it will pass H.R. 22. But if the bill becomes enmeshed in budget politics this summer, the outcome may become, like so many things postal right now, much more uncertain.
Bruce Moyer NAPS Legislative Counsel |
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National Association of Postal Supervisors NAPS Legislative & Regulatory Update June 12, 2009
Senate Approves TSP Reforms, but Drops FERS Sick Leave Fix The Senate on Thursday approved landmark tobacco regulation legislation that includes several provisions expanding federal employee options under the Thrift Savings Plan, but does not allow FERS-covered employees to count unused sick leave toward retirement savings. The FERS sick leave fix would correct an inequity in coverage between workers covered by the older CSRS system and FERS and also encourage workers to save their sick leave, creating management benefits and cost-savings.
The Senate, however,
included only the Roth IRA and other TSP provisions in its version of
the tobacco bill, causing the FERS sick leave and other federal employee
provisions to be subject to a procedural objection of germaneness successfully
lodged by
Sen. Jim DeMint (R-SC).
The FERS sick leave provision was contained in an amendment offered by Sen. Joseph Lieberman (I-CT), that also contained provisions that would have made it easier for the government to rehire federal retirees part time; modified how the CSRS calculates annuity payments for employees who retire as part-time workers; and moved federal employees in Alaska, Hawaii and U.S. territories from cost-of-living adjustments into the federal locality pay system. Approval of the Lieberman Amendment, because of Senate rules, required the approval of all Senators, and DeMint would not budge. TSP provisions remaining in the Senate legislation included measures that would automatically enroll federal civilian hires into the plan; enable employees to invest their retirement money into mutual funds of their choice; allow enrollees to create a Roth 401(k) so they do not have to pay taxes when funds are withdrawn; and permit spouses of deceased federal workers to continue managing their funds in the TSP. Current law requires spouses to withdraw those funds 60 days after their spouse passed away and reinvest them elsewhere.
NAPS Sues the Postal Service over Representation Rights NAPS has gone into federal court to challenge the determination of the Postal Service that the management association is not entitled to represent supervisors and other managerial employees in the Shared Services Center in Greensboro, North Carolina. On June 9, NAPS filed a motion in the United States District Court for the District of Columbia requesting the court to enforce a prior court order originally issued on February, 17, 1977, that provided NAPS with the legal right to represent supervisors and other managerial employees of the Postal Service. This action stems from the establishment of the Shared Services Center in Greensboro, North Carolina that consolidated some of the human resources activities of the Postal Service into a single worksite. NAPS members began transferring from the field to this central work location beginning in 2005 as their positions in the field were eliminated and they followed their work to the Greensboro facility. The Postal Service contends that the individuals at the Shared Service Center are not eligible to be represented by NAPS because the facility reports to Headquarters. In explaining the legal action, NAPS President Ted Keating stated that NAPS has attempted to resolve this matter through the consultative process, but the Postal Service would not concur with NAPS' position despite the court’s original decision in 1977 and the fact that other positions that were transferred to headquarters reporting over the years maintained their rights to representation by NAPS.
House Panel Approves Voting by Mail in Federal Elections Support for voting by mail got a big boost in the House on Wednesday when a House panel approved a set of election reform bills, including one supported by NAPS that would allow voting by mail in all federal elections. The measure, the "Universal Right to Vote by Mail Act" (H.R. 1604) guarantees the right of any eligible voter to vote "no-excuse absentee" in a federal election. Currently, 22 states and the District of Columbia restrict an eligible voter’s ability to vote by mail, some of them imposing doctor’s note, notary and privacy information requirements. The vote by mail bill was one of three election reform bills approved by the House Administration Committee and sponsored by Rep. Susan Davis (D-CA). Another, "The Absentee Ballot Track, Receive and Confirm (TRAC) Act (H.R. 2510), would provide grants to states to establish absentee ballot tracking systems to assist voters to easily find out, online or through an automated phone system, whether an elections office has sent out a ballot, whether a completed ballot has arrived back at the registrar’s office and whether the ballot was actually counted. Rep. Davis worked with Rep. Kevin McCarthy (R-CA) in sponsoring the absentee ballot tracking measure. "Democracy flourishes when all Americans have a fair chance to participate in elections and have confidence that the process is fair, Rep. Davis said in a statement.
Obama Picks McHugh for Army Post
The House of Representatives is set to lose one of its most experienced and knowledgeable lawmakers on the operations of the Postal Service. President Obama on June 2 announced his plans to nominate Rep. John McHugh (R-NY) as Secretary of the Army. McHugh would be the third top-ranking Republican to join the Obama Administration. The ranking GOP member on the House Armed Services Committee, McHugh has represented upstate New York's 23rd District for nine terms. His district includes Fort Drum, where the Army's 10th Mountain Division is based.
The sixty-year old lawmaker, known to many in the postal community as the "Father of Postal Reform," fought for over a dozen years in the House of Representatives for legislation to modernize the Postal Service and liberalize postal ratemaking processes, ultimately resulting in the passage of the Postal Accountability and Enhancement Act in December 2006.
Known for his ability to reach across the aisle and bridge partisan differences, as well as his seasoned understanding of the postal industry, McHugh's departure could be quickly felt in the Congress on postal issues. Over the last six months he has championed legislation, H.R. 22, to provide financial relief to the Postal Service. A Congressional source indicated that McHugh's Senate confirmation hearing for the Army post could occur before the start of the August recess.
Bruce Moyer NAPS Legislative Counsel
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National Association of Postal Supervisors NAPS Legislative & Regulatory Update May 21, 2009
Although the postal relief legislation, HR 22, was scheduled to be marked up yesterday by the House Subcommittee on Federal Workforce, Postal Service and the District of Columbia, those plans were scuttled on Monday and subcommittee chairman Rep. Stephen Lynch (D-MA) announced yesterday the likelihood of a subcommittee markup in early June, shortly after Congress returns from its Memorial Day recess.
HR 22 would ease the Postal Service's payment schedule for health benefits for its 400,000 retirees, permitting the Service to begin now to tap a trust fund intended for the payment of future retiree health benefits, instead of waiting until 2016, while still requiring the Service to make payments into the fund.
If Congress doesn’t pass HR 22 by September 30, the end
of the fiscal year, the Postal Service says it will be unable
to make its full annual contribution — $5.4 billion — into
the trust fund. “We would run out of cash. ... There
becomes a choice when you’re at the brink of insolvency:
Do you pay employees, do you pay suppliers, or do you not
pay this $5 billion?” William Galligan, USPS Senior Vice
President of Operations, told Congressional lawmakers yesterday.
“We break the law by not paying that. Not a place we want
to be at.” In the meantime, widespread support for HR 22 among Democratic and Republican lawmakers in the House of Representatives continues to swell, with 315 cosponsors of the legislation. Click here to check if your House Member has become a cosponsor of HR 22. If your House Member has not yet signed-on as a cosponsor, click here and send them a message (it's easy to do), urging them to support this critical measure. Congressional Interest in Five-Day Delivery Begins to Grow Reluctant support among pivotal House lawmakers for a cutback in mail delivery to five days a week appears to be growing, a hearing by the House postal oversight panel revealed yesterday. But Congress is unlikely to embrace the five-day move until it has a clearer understanding of how much the move would actually save. Postmaster General Jack Potter in January first proposed a seasonal transition to five-day delivery, suggesting that a reduced delivery schedule made sense during the lower-volume summer months. Since then, and in light of its deteriorating financial condition, the Postal Service has sought a more permanent move to five-day delivery operations, contending it could generate as much as $3.5 billion in annual savings. The Postal Regulatory Commission in a December 2008 report estimated savings of only about half as much, predicting that it would yield $1.9 billion and cause mail volume to decline. "The only way we'll embrace it is if we have no other choice, and we're getting to that point," said Rep. Stephen F. Lynch (D-MA), chairman of the House postal oversight committee, said at yesterday's hearing. Del. Eleanor Holmes Norton (D-D.C.) asked for an independent assessment of the savings, saying "I would seriously consider it if we had an independent study showing that it would make a structural difference." Rep. Gerry Connolly (D-VA) acknowledged that the post office that our grandparents knew may not be the post office that is needed by their grandchildren. William Galligan, USPS Senior Vice President of Operations, told the subcommittee that the Postal Service is facing the most significant challenge of its history and said that even a move to five-day delivery would not be enough to bridge the financial gap between revenues and expenses, requiring structural solutions, including the closing and consolidation of mail processing and other facilities. Phillip Herr, Director of Physical Infrastructure Issues at the Government Accountability Office, said that USPS can streamline its retail network by closing unnecessary post offices and promoting lower-cost alternatives. He also said that GAO may have to consider adding the Postal Service to its High Risk list. For a good summary of the hearing, prepared by the Association for Postal Commerce, click here. The statements of all hearing witnesses are here. Media coverage is here and here. Bruce Moyer NAPS Legislative Counsel
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National Association of Postal Supervisors NAPS Legislative & Regulatory Update May 15, 2009
Postal Worker Benefit Cuts in the Works? Although the Obama Administration has pulled the plug on initial proposals to bring postal service employee benefits in line with those of federal workers, it has signaled that it has not backed off of interest in potentially reducing postal employee benefits. Kenneth Baer, spokesman for the Office of Management and Budget, told the Wall Street Journal on May 10 that the Administration is reviewing USPS worker benefit policies and that "[a] more comprehensive package of reforms will be coming down the pike." In March, the White House, as part of a preliminary Fiscal Year 2010 budget document, proposed requiring postal workers to pay 27% of their health insurance costs, the same as civil servants and up from the current level of 17% that postal workers currently pay. The plan also called for postal employees to begin paying 67% of their life insurance premiums, just as feds do. The White House, however, dropped its initial USPS benefits reduction proposal after postal unions complained that changing the benefit payment levels would violate collective bargaining agreements, which mandate the benefit levels, at least for covered workers, and run through 2011. More recent detailed White House FY 2010 budgets did not propose a USPS employee benefits adjustment. The Obama preliminary budget proposal projected government savings of $752 million in fiscal year 2010, or $9.4 billion over the next decade by reducing USPS worker benefits. NAPS and other postal employee groups will continue to monitor these developments very closely.
When Will HR 22 Move?
There still is no definite word on when and how Congress will begin to move legislation to provide critical financial relief to the Postal Service.
Action could begin in the House of Representatives as early as May 20, when the House postal subcommittee is tentatively slated to hold a business session to mark-up pending legislation. At that time, the subcommittee could consider HR 22 or a variation of the bill. Plans on the timing and shape of the postal legislation, according to subcommittee sources, are still in flux.
HR 22, which already has attracted 302 cosponsors, would provide $25 billion in savings to the Postal Service by allowing it to pay premiums for current retiree health benefits with funds it has already set aside for future retiree health benefits, while still continuing to make pre-payments for future benefits. The Congressional Budget Office contends, however, that HR 22 will be costly to the federal government and contribute to an unfunded government liability.
NAPS and other postal employee organizations last month wrote to House postal subcommittee chairman Rep. Stephen Lynch (D-MA), contesting CBO's and scoring approach and urged prompt action on HR 22, which would provide critical financial breathing room to the Postal Service. The Postal Service has incurred net losses in ten of its last 11 quarters, and announced on May 6 that it had ended its second quarter with a nearly $2 billion loss, largely due to the economic recession.
Click here to check if your House Member has become a cosponsor of HR 22. If your House Member has not yet signed-on as a cosponsor, click here and send them a message (it's easy to do), urging them to support the legislation.
House Panel to Examine Postal Operation Downsizing
The Postal Service is expected to announce its latest thinking on plans to cut operations and network costs on Wednesday, May 20, when the House postal oversight subcommittee holds a hearing on the hard choices and tradeoffs that underlie the preservation of the nation's mail system.
The hearing, "Nip and Tuck: The Impact of Current Cost Cutting Efforts on Postal Service Operations and Network," will be held by the House Subcommittee on Federal Workforce, Postal Service and the District of Columbia, chaired by Rep. Stephen Lynch (D-MA).
According to the Subcommittee, the hearing will focus on: "What are the hard choices and tradeoffs that need to be considered as mail volume declines significantly? What options should be considered to overcome barriers and facilitate the Postal Service in making significant progress in “rightsizing its networks?” How much cost does the Service need to take out of its network and operations to remain solvent and how will it be achieved? What impact, if any, will cuts have on service?"
William P. Galligan, USPS Senior Vice President, Operations, is expected to testify, along with witnesses from GAO, mailers, and postal employee organizations. USPS Summer Sale Could Generate Hot Revenue The Postal Service is awaiting the go-ahead from the Postal Regulatory Commission to proceed with the most expansive exercise of its pricing flexibility since Congress enacted the postal reform law in 2006. By mid-June the Postal Service is likely to learn from the PRC whether it may permit high-volume mailers to receive a 30% rebate on advertising mail they send through the postal system from July through September. The USPS "Summer Sale" pricing initiative, which could generate as much as $95 million in additional revenue for the Postal Service, responds to the disastrous downturn in USPS finances and mail volume brought about by the recession and the fact that mail volume is typically lower during the summer months. The USPS "Summer Sale" proposal to the Postal Regulatory Commission is here.
Bruce Moyer NAPS Legislative Counsel
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National Association of Postal Supervisors NAPS Legislative & Regulatory Update April 2, 2009
The district office consolidations are part of a series of measures responding to the economic recession that has rocked Postal Service revenues. As a result of the recession, mail volume will likely plunge from 212 billion pieces in 2007 to 180 billion pieces by September 30, the end of the current USPS 2009 fiscal year.
The Postal Service also agreed to comply with all legal requirements of the reduction-in-force (RIF) process, including notice to all impacted employees in the RIF- avoidance and RIF processes. The Postal Service also committed to provide NAPS with sufficient information and briefing as these actions move forward.
House Approves FERS Sick Leave Credit, TSP Reforms NAPS scored a victory on Wednesday when the House of Representatives approved a change in civil service laws that would award credit to FERS-covered employees for unused sick leave in the calculation of their retirement benefits. The new approach will provide an incentive to FERS-covered employees to conserve their sick leave, rather than use it up as they near retirement. This in turn will achieve management savings and promote productivity, to the tune of $68 million a year. Unlike CSRS-covered employees, FERS-covered workers have worked under a use-it-or-lose-it sick leave rule since the creation of FERS, effective January 1, 1987.
The provisions of the Federal Retirement Reform Act of 2009, H.R. 1804, were also added to a second measure, The Family Smoking Prevention and Control Act, H.R. 1256, passed by the House on Wednesday. That legislation provides the Food and Drug Administration with wider authority to regulate tobacco products. Adding the provisions of the Federal Retirement Reform Act ensures that the tobacco control bill is fully paid for and does not increase the deficit. Both House-approved measures -- H.R. 1804 and H.R. 1256 -- now move to the Senate.
-- Enroll new employees automatically in the Thrift Savings Plan;
-- Authorize the TSP Board to add self-directed investment window options for TSP participants;
-- Allow an individual who has returned to government service and who has received a refund of retirement contributions under FERS to deposit the amount that was received, with interest, to the credit of the Civil Service Retirement and Disability Fund (originally HR 928, the FERS Redeposit Act).
Bruce Moyer |
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National Association of Postal Supervisors NAPS Legislative & Regulatory Update March 27, 2009
NAPS Urges USPS to Cut Top Management Ranks
NAPS President Keating called upon the Postal Service to strip away top levels of management and take other cost-cutting moves, during testimony before a House subcommittee on Wednesday.
His comments came during a hearing of the House federal workforce and postal oversight subcommittee on the financial crisis facing the Postal Service, at which Postmaster General Jack Potter warned that, unless the Congress provides financial relief, the Postal Service will run out of money by the end of the year, September 30.
Potter urged Congress to approve changes that would save billions of dollars in the way the Postal Service pays for its retiree health benefits and authorize USPS to move to five-day delivery.
Keating joined the call for urgent action on HR 22, which would permit USPS to pay its current retiree health benefit costs differently, but went further and pointed to ways that the Postal Service could cut significant costs and improve operations.
He urged the Postal Service to consolidate its nationwide management structure from ten geographic areas to five, calling the current framework "far too large, bureaucratic and costly to be allowed to continue to exist."
"By reducing and consolidating its top management structure, the Postal Service would eliminate needless bureaucracy, save costs, and operate more efficiently," Keating said. "It is time that the Postal Service apply the same rigorous cost-cutting scrutiny to the numbers of its upper ranks as it is applying to middle and lower-management." Keating's call came after the Postal Service last week announced the closure of six district offices and the elimination of 1,400 processing supervisor and management positions.
Keating also criticized the Postal Service's practice of buying the homes of relocated employees and called for the end of the practice. "Recruitment and retention incentives can be provided through sufficient other means, without the need for home purchases that cause the Postal Service to rack up significant losses," Keating said.
Additionally, Keating took aim at the practice of USPS district managers detailing supervisors and managers to positions that, Keating said, don't officially exist in the USPS personnel structure. Keating said the practice, which involves hundreds of supervisors in ad hoc positions, is costly and harms productivity. "This is only one of numerous problems that NAPS and the postmaster organizations have raised with USPS, in light of the savings and management efficiencies that could be secured. Like so many of our recommendations, they have been ignored by USPS top management," Keating said.
Video Coverage
Video of the marathon, seven-hour House hearing is here.
Vdieo of the testimony of NAPS President Keating and other management association and union presidents is here.
Good reporting and analysis of the hearing and the underlying issues:
Postmaster general predicts $1.6B shortfall by year’s end, Federal Times, March 25, 2009
Postmaster defends compensation, wants help on deficits, Government Executive, March 25, 2009
In Special Delivery to Lawmakers, U.S. Postmaster Signals SOS, Washington Post, March 26, 2009
And as if Washington woes weren't enough:
Junk Mail Ban Adds to Postal Woes, Graphic Arts Online, March 27, 2009
NAPS Leaders Prepare to Take the Hill
Over 600 NAPS leaders will converge on Washington this weekend for the NAPS Legislative Conference and Training Seminar, followed by meetings on Capitol Hill on Monday and Tuesday with lawmakers to press NAPS' legislative agenda.
"There has never been a more critical time for postal supervisors and managers than now," said NAPS Executive Vice President Louis Atkins. "Our mission is to convince Congress of the need to put the Postal Service back on track."
NAPS members will promote the passage of HR 22, financial relief legislation for the Postal Service, along with several other measures advancing Postal Service and NAPS member interests. The NAPS Legislative Agenda is covered in the NAPS Legislative Issues Brief.
NAPS leaders at the legislative conference will hear from :
Rep. Edolphus "Ed" Towns (D-NY), chairman of the House Oversight and Government Reform Committee;
Rep. Stephen Lynch, chairman of the Federal Workforce subcommittee that oversees the Postal Service and government operations;
Postmaster General Jack Potter; and
Political strategist Michael Dunn.
Bruce Moyer NAPS Legislative Counsel
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National Association of Postal Supervisors NAPS Legislative & Regulatory Update - March 25, 2009
USPS to Face Tough Questions from Congress The latest take on the financial health of the Postal Service will occur on Wednesday in Washington, as the House postal oversight subcommittee hears from the Postmaster General, the USPS Board of Governors and other witnesses, including NAPS, on what to do, as the nationwide economic downturn, coupled with technological trends, continues to generate declining mail volumes and revenues. Postmaster General Jack Potter and Board of Governors Chairman Carolyn Lewis Gallagher likely will face tough questioning as the Postal Service heads towards its third multi-billion dollar deficit in three years, and executive compensation and relocation policies raise concerns. The hearing entitled, “Restoring the Financial Stability of the U.S. Postal Service: What Needs to be Done?” is the first to be convened by the postal subcommittee's new chairman, Rep. Stephen Lynch (D-MA). Witness testimony, the Chairman’s opening statement and the live broadcast of the hearing, starting at 10 am EDST, can be found on the Subcommittee’s website. “With the Postal Service facing budget shortfalls the Subcommittee will consider a number of options to restore financial stability, and examine ways for the Postal Service to continue to operate without cutting services,” Lynch said in a statement. “Given the ongoing financial losses at the Postal Service, there has been a considerable backlash among postal customers and current and former employees regarding the Postal executives’ compensation packages, including that of Postmaster General Potter. Members of Congress have been hearing from our constituents and we intend to look into this matter at the hearing and ascertain how those pay levels were determined and how to bring them in line with the current reality,” added Lynch. Wednesday's hearing could provide answers on: -- How soon Congress will move ahead to provide financial relief to the Postal Service and pass HR 22, championed by Rep. John McHugh (R-NY) and Rep. Danny Davis (D-IL). The legislation would revise the out-of-whack payment expectations contained in the postal act of 2006 that straight-jacket the Postal Service with extraordinarily large retirement health benefit prefunding requirements it cannot afford to pay, whether in good or bad times; -- What will likely come next in USPS attempts to cut costs, after the Postal Service's announcement Friday of the first big nationwide wave of facility consolidations and job cuts, including the elimination of 1,400 management and supervisory positions and the offering of early retirement to 150,000 employees; and -- Why the Board of Governors decided to implement controversial compensation packages for its top executives and costly housing purchase relocation policies that caused USPS to lose an average of more than $58,000 on the 500-plus homes its relocation program bought and sold in 2008. NAPS President Ted Keating, along with the presidents of the other six postal employee organizations and other witnesses, will testify at Wednesday's hearing. To read Mr. Keating's testimony, click here after 10 am EDST on Wednesday. NAPS Leaders Prepare to Take the Hill Over 600 NAPS leaders will converge on Washington this weekend for the NAPS Legislative Conference and Training Seminar, followed by meetings on Capitol Hill on Monday and Tuesday with lawmakers to press NAPS' legislative agenda. "There has never been a more critical time for postal supervisors and managers than now," said NAPS Executive Vice President Louis Atkins. "Our mission is to convince Congress of the need to put the Postal Service back on track." NAPS members will promote the passage of HR 22, financial relief legislation for the Postal Service, along with several other measures advancing Postal Service and NAPS member interests. The NAPS Legislative Agenda is covered in the NAPS Legislative Issues Brief. NAPS leaders at the legislative conference will hear from : Rep. Edolphus "Ed" Towns (D-NY), chairman of the House Oversight and Government Reform Committee; Rep. Stephen Lynch, chairman of the Federal Workforce subcommittee that oversees the Postal Service and government operations; Postmaster General Jack Potter; and Political strategist Michael Dunn. Bruce Moyer NAPS Legislative Counsel USPS to Face Tough Questions from Congress; NAPS Leaders Prepare to Take the Hill, 03/25/09 |
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National Association of Postal Supervisors NAPS Legislative & Regulatory Update - Feb. 17, 2009
A Case Where Congress Did Something Right ... Well Almost As questions continue to swirl in Washington whether the economic stimulus package was too big, too small or just right, no one disputes the wisdom of what Congress did three years ago in its passage of the postal reform law, requiring the Postal Service to set aside funds each year to assure the future payment of postal retiree health care premiums. The good sense in what Congress did in establishing the Postal Service's Retiree Health Benefits Fund and requiring USPS annual pay-ahead payments into the Fund was underscored yesterday, when USA Today led with a front-page look at how state and local governments have pretty much failed to set aside any money to pay for at least $1 trillion in medical benefits to retired civil servants. States have $445 billion in unfunded obligations to help retirees pay for health insurance, and local governments have obligations that surpass the $500 billion mark. Governments may now be forced to cut benefits or raise taxes in order to deal with the issue. (No federal agency is required to make payments for the health care costs of its future retirees, as the Postal Service is. In comparison, the Postal Service is required under the Postal Accountability and Enhancement Act to make an annual payment between $5.4 to $5.8 billion, from 2007 to 2016, into the Retiree Health Benefits Fund to cover future retiree health care costs. This helps to assure that the money will be there, when the time comes, regardless of the Postal Service's financial picture, to satisfy its health care obligations to its retirees. Already, there is over $32 billion in the Fund. Additionally, USPS makes a separate annual payment to the Office of Personnel Management for its current retiree health benefit premiums, of about $2.3 billion. The problem -- where Congress went wrong -- is that the USPS payment schedule that Congress set in 2005 was based upon the then-current economic conditions -- reflecting a health economy and a healthy USPS -- and not the deep recession of today, which has cratered USPS. That's why HR 22, which would afford reasonable financial relief to the Postal Service, would permit USPS to make its payments for current retiree health benefit premiums out of the Retiree Health Benefit Fund. This accelerates the approach that is already envisioned in the PAEA after 2016. Cut Postal Services, Don't Hike Stamp Prices, Americans Say A new Gallup Poll reveals that a majority of Americans prefer cutbacks in postal service, such as ending Saturday mail delivery and closing post offices -- to either government assistance or higher stamp prices. (The US Postal Service announced on February 10 new postal rates for 2009 including a two-cent increase in the price of a First-Class Mail stamp to 44 cents. Prices for mailing services are reviewed annually and adjusted each May. The new prices will go into effect Monday, May 11.) According to the recent Gallup poll results, Americans --whether they later regret it or not -- seem willing to forgo some of the Postal Service conveniences they have become accustomed to, as opposed to paying to keep those services directly (through higher stamp prices) or indirectly (through taxpayer funds). This is an attitude shared widely by Americans of nearly every demographic or attitudinal characteristic, Gallup says. With only 27% preferring government assistance -- something the post office has not received since 1982 -- and 14% preferring significantly higher stamp prices, Americans appear more than willing to give up some of the conveniences the Postal Service has long offered, including six-day-a-week delivery and thousands of local post office branches. It is possible the limited support for government funding of the Postal Service may reflect concern over the vast amounts of money Washington is spending in an attempt to revive the economy and help out struggling industries. The poll provides some support for this idea, as those who said they were "very closely" following news about the economic stimulus plan Congress was debating favored cuts in postal services over government funding by a 43-point margin (64% to 21%). That compares to a smaller 25-point margin (54% to 29%) among those who were less attentive to the stimulus debate. Bruce Moyer NAPS Legislative Counsel |
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NAPS Legislative/Regulatory Update
- Feb. 11, 2009
National
Association of Postal Supervisors
Attempts to Secure USPS Pre-Funding
Relief Continue
Effort to pass
HR 22, to provide critical financial relief to the Postal Service
through the recalculation of its future retiree health premium payments,
continues in the House of Representatives.
NAPS members have been urging their House lawmakers to cosponsor
HR 22, which provides eight years of pre-funding relief to the
Postal Service between now and 2016. To send a message to your
lawmaker to urge them to support HR 22,
click here.
Parallel effort in the Senate failed to gain inclusion of two years
of USPS prefunding relief in the
$828 billion stimulus package passed by the Senate yesterday.
Postal employee organizations and the
mailing industry had pushed for the inclusion of the prefunding
relief in the Senate measure.
HR 22, introduced by
Rep. John McHugh (R-NY) and
Rep. Danny Davis (D-IL), would permit the Postal Service to begin
to pay its retiree health premiums out of the retiree health benefit
trust fund -- to which the Postal Service has already deposited $32
billion. Ultimately, the Postal Service will pay $107.5 billion
into the fund by 2016, under the postal reform law.
NAPS supports
HR 22 because it would help pay for $2.3 billion of the Postal
Service's current retiree health care obligation this year -- rather
than require use of current operating funds. This would not
interfere with the health care that current and future retirees receive
or their own premium payments. It would simply cut to the chase
and accelerate a provision in the postal reform law that calls for
USPS premium payments to start being drawn from the retiree health
benefit fund after 2016, from which the Postal Service will make annual
payments of $5 to $6 billion.
A hearing by the House postal oversight subcommittee on HR 22 and
the USPS financial picture is likely sometime in the coming weeks.
Rep. Stephen Lynch (D-MA), who was elected last week by the House
leadership to the chairmanship of the postal oversight committee,
will preside at that hearing for the first time. Lynch, the
five-term Congressman from the South Boston/Brockton area, has been
active on postal issues. During the last Congress he introduced
HR 4236, curtailing USPS use of contracting-out of mail delivery.
The Massachusetts Congressman knows postal issues from the real-world
perspective. His mother, Ann Lynch, was a postal clerk,
and other relatives have postal roots.
FERS Sick Leave Measure Dumps Use-It-Or-Lose It Approach
Legislation jettisoning the “use-it or lose-it” approach toward sick
leave for FERS workers has once again been introduced in the House.
This year’s bill, though, is much better than last year’s proposal.
The new measure,
The FERS Sick Leave Equity Act, HR 958, introduced by
Rep. James Moran (D-VA) and
Rep. Frank Wolf (R-VA), will apply the same sick leave policy
to employees covered under FERS as to employees under the CSRS.
Under Moran’s proposal, accrued sick leave at the end of a federal
or postal career will be added to the years of service an employee
has worked. Because these years of service are used to calculate
retirement benefits, the financial payoff will be better. Retiring
FERS employees who hold on to their sick leave will get more in retirement
benefits each year.
NAPS has endorsed the Moran bill and will work hard for its passage.
NAPS members at the upcoming LTS will hit the Hill in search of cosponsors.
In a
letter to Representative Moran, NAPS President Ted Keating thanked
the Virginia lawmaker for his valuable efforts in introducing the
measure, noting that it provides real incentives for federal and postal
employees under FERS to retain their sick leave at the end of their
career, rather than use it. “This uneven approach [between FERS
and CSRS sick leave policies] fails to sufficiently discourage the
use of sick leave by FERS employees during the period leading up to
retirement,” Keating told Moran. “Your legislation will balance
the scale and provide the tools for improved management of the federal
and postal workforce, yielding greater productivity and cost-savings.”
Postal Service and civil service employees under FERS will be attracted
to the Moran measure because of the fairness it provides in how sick
leave is treated and for the boost it gives to their pensions when
they save their sick leave. Congress will be attracted to the
Moran measure for a different reason, namely, the gains to the government
when employees retain their sick leave, rather than use (or abuse)
it. Greater productivity should come about, through employees
being present to perform their jobs, rather than leaving the work
to others. This should help to save dollars, improve morale
and create a better workplace.
There is no doubt that the difference in how sick leave is treated
under CSRS and FERS creates distinguishable trends in its use among
workers nearing retirement. FERS employees who receive no value
for their unused sick leave will use that leave rather than simply
forfeit it back to the government at retirement. The Congressional
Research Service last August found that FERS employees who were eligible
to retire or approaching eligibility generally used more sick leave
than their CSRS counterparts. Independent reports by the Treasury
Inspector General for Tax Administration and the Bureau of Prisons
also confirmed that FERS employees were more likely to use sick leave
than CSRS employees at the time of retirement.
The savings that can result through abandonment of the use-it-or-lose
it approach toward FERS sick leave are considerable. The Office
of Personnel Management estimated in a May 2006 report that the lost
productivity caused by the increased use of sick leave by FERS employees
who were eligible or nearly eligible to retire cost the federal government
$68 million on an annual basis, based upon available data between
April 2005 and March 2006.
Last year, the House passed
HR 1108, a bill regulating the use of tobacco, which included
a provision to provide 75% credit for accrued sick leave for three
years following enactment. Although there was broad support for the
bill in the House, the measure did not move in the Senate because
of the controversial tobacco provisions. This year’s FERS sick
leave measure is a stand-alone bill, without the tobacco provisions.
Bruce Moyer
NAPS Legislative Counsel
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NAPS: Warning Letter on Mitigation of FY 2008 from MINK Area VP Larry Ewing (December 4, 2008) This is intended as a heads up to all Managers and Supervisors of Customer Service in level 21 and below Stations and Branches who have the understanding that the unit portion of the FY 2008 is based on the performance of the city as a whole. In FY 2008 as well as FY 2009 this is not true. This can cost you several thousand dollars from your PFP payout this year alone. This may seem complicated but check it out. Call me if you need help walking through it. It will be worth your time. I have discovered that, in many/most cases, when we confirmed our profile in PES, way back in September and October of 2007 for FY 2008, the unit level was changed from the previous year’s “Post Office EAS 26-21”.to read “Level 21 Station and Branch”. In most cases there was no notification of the change and when we confirmed it in PES it appeared correct and went un-noticed. I have found no instances where the impact of the change in the unit designation was explained to those affected. I will try to explain the consequences of this event and recommend action. If you managed your operation selflessly the entire year it’s possible that your numbers may not be as good as the station you helped. When you short staff your window the revenue you may lose by people going to a station without a line will end up coming out of your paycheck. When you give away carriers and end up working more expensive overtime hours in your office your TOE is adversely affected and therefore your paycheck. When you “take one for the team” and take on a station that performs poorly (we’ve all got one like that) the resulting poor numbers result in a smaller pay raise for you. Everyone is willing to take the “easy” station with good performance and great revenue. Do the rest just suffer? Did you understand in the beginning of the FY that you would work as team toward all goals except the one over which you had direct control; your core goals? To determine if this is affecting you go to the NPA website and compare what is available to you. The site can be found by typing “NPA” in the address bar. Go to reports and on the left select “Report Card Detail”. See how far down you can drill when you select September of FY2007. You’ll find you can only go down to your city…which you knew. Now select September FY2008 and in the “Org Level” you’ll see that you can drill down to C/S Station/Branch. Take a look at the difference in the Unit Summary for the different stations within your city. Compare the NPA composite Summary, your score before the cores are calculated. What you will find is that some stations vary a great deal from the number that would have been achieved with the Post Office or city score designated as the unit. Here’s what I recommend: If you are under the impression that you were working together as a team toward unit goals, immediately send a request for information to the Postmaster or MCSO. Request a copy of the screen that indicates each of his direct report’s NPA Composite Score. (This will be very close, within a few hundreds, to the score you see on the report card detail report). If you find these scores are different, and most of you will, I suggest the local president file for mitigation on behalf of the city EAS based on the fact that it was not explained that the rules had changed. While it will likely be rejected because you can’t prove a 1 box change, it will serve as notice that you tried to address the problem before the mitigation deadline of December 12. Yes I said December 12!! Even though you aren’t supposed to know what your rating is until January 17, 2009, the dead line for mitigation to go through the process and be at headquarters is December 12. Seems like a Catch 22 doesn’t it? Headquarters is addressing this in the December consultative and I have been asked to present support on the issue to them. I hope to be successful in clearing this up. Please feel free to call me to walk you through the NPA screens or the mitigation process. |
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Sick Leave Removed as NPA Core Goal for EAS Employees December 1, 2008 – Through the effort of NAPS in the Consultative Process and the cooperation of The United States Postal Service, a change is being made today to the FY 2009 NPA Core Requirements: “Reduce Sick Leave Usage” will be removed as an option for employees when selecting Core Requirements. This Core Requirement is being removed at the request of and through the Consultative process with NAPS. Employees who selected this Core Requirement will be notified via email that their Core Requirements have been returned and they will need to select a different Core Requirement. The Postal Service will provide additional information on how to change your selection of Core Goals due to the removal of Sick Leave as a Core Goal. |
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National Association of Postal Supervisors Legislative and Regulatory Update - November 13, 2008 In This Issue:
The Future is Now, USPS Seeks to Realign Its Retiree Health Benefit Obligations Looking to defray its operating costs, the Postal Service is seeking quick Congressional relief from its obligation to pre-fund future retiree health benefits, by redirecting a portion of the amount it pays for future retiree health benefits costs to cover its current employer's share for retiree health benefit premiums. The Postal Service is seeking Hill approval of the payment arrangement before the end of the 110th Congress. USPS payments for future retiree health benefits represent a considerable financial obligation. In FY2008, USPS made a $5.6 billion payment into the Retiree Health Benefits Fund (RHBF) to pre-fund retiree health benefits. The arrangement the USPS is pushing on Capitol Hill would reduce the amount the Postal Service pays into the RHBF by $2.3 billion in FY 2009, and $28.1 billion through 2016. The Postal Service's pre-funding payments after 2016 would grow in order to make up the difference. Currently, the Postal Service pays approximately $2.3 billion a year to OPM for the employer share of health benefits for retired postal workers, and approximately $5.4 billion annually into the RHBF for future retiree health benefits. The pre-funding rearrangement was imposed by the Postal Act of 2006 in order to assure that the Postal Service retained the means to satisfy its massive future retiree health benefit obligations, especially in light of the escalating costs of health care and uncertainty over future USPS finances. There is good reason for changing the funding arrangement, given the financial crisis the Postal Service faces. Reflecting the deepening recession, the Postal Service announced today that it had experienced its largest single-year decline in postal volume in its history. USPS Chief Financial Officer Glen Walker reported to the Board of Governors that postal volume was down by 9.5 billion pieces from 2007 levels, a decline of 4.5%. Standard Mail dropped 4.3%, Shipping Services fell 3.3%, and Periodicals edged downward 2.2%. The Postal Service ended FY08 with a $2.8 billion net loss, aggravated by the $5.6 billion payment required by the Postal Act of 2006 to pre-fund retiree health benefits. The good news was that the Postal Service continued to improve national on-time First-Class Mail delivery performance, reaching record highs in FY 2008. Due to cutbacks in overtime and shift schedules, the Postal Service also reported that it reduced work hours (which constitute a hefty portion of postal costs) by 50 million work hours. Looking ahead to 2009, Walker indicated that the worsening economy will add more red ink to the USPS bottom line, forcing volume downward by another 8 billion pieces. Walked also indicated that USPS will pursue an "unprecedented focus on across-the-board cost reductions." Leadership Changes of Postal Oversight Committees Possible Dramatic changes in the leadership of the Congressional committees that oversee the Postal Service could come about next week, when Congress returns to Washington for a lame duck session and party caucuses meet. Committee chairmanships are put to a vote of the party membership in each legislative chamber by a secret vote, after recommendations have been made by the party's leaders. In the House, Rep. Henry Waxman (D-CA), the current chair of the House committee with oversight of the Postal Service, has challenged Rep. John Dingell (D-MI) for chairmanship of the influential Energy and Commerce Committee. Waxman is currently chairman of the House Oversight and Government Reform Committee and the second-ranking Democrat on the Energy and Commerce panel. Waxman's challenge for the E&C chairmanship marks a major showdown between two Democratic powerhouses, with implications for a host of major legislative initiatives next year, from health care to global warming to renewable energy. The contest has highlighted an ideological rift within the Democratic party and its senior leaders. Dingell's close ties to Detroit automakers and utilities have continually put him at odds with the party's liberal leadership, including House Speaker Nancy Pelosi (D-CA) over climate-change initiatives such as higher fuel efficiency standards for cars and caps on carbon emissions. Waxman has been tenacious in his leadership of the House Oversight and Government Reform Committee, using the wide authority of the committee to scrutinize the Bush Administration, pursue inquests into its conduct of the Iraq war, White House political operations and regulatory failures behind the financial collapse. If Waxman wins the Energy and Commerce post, Rep. Edolphus Towns (D-NY) could become the chairman of the Oversight and Government Reform panel. However, Towns' support for Dingell could become problematic if Waxman wins the Energy Committee post. Rep. Paul Kanjorski (D-PA) and Rep. Carolyn Maloney (D-NY) follow Towns in seniority. The current chairman of the House subcommittee with direct oversight of the Postal Service, Rep. Danny Davis (D-IL), could also give up the subcommittee gavel, if he is named to the Illinois Senate seat that will be vacated by Sen. Barack Obama. Davis is reported to be one of several members of Congress from the Chicago under consideration by Illinois Governor Rod R. Blagojevich, including Rep. Jesse L. Jackson Jr. (D-IL), Rep. Melissa Bean (D-IL), Rep. Luis V. Gutierrez (D-IL) and Rep. Jan Schakowsky (D-IL). On the Republican side of the House Oversight and Government Reform Committee, Rep. Darrell Issa (R-CA) has announced his campaign to secure the ranking Republican slot on the panel after his leading rival for that post, Rep. Chris Shays (R-CT), lost his re-election bid last week. In the Senate,the chairmanship of the Senate committee that oversees the Postal Service -- the Homeland Security and Governmental Affairs Committee -- could shift, but that outcome is far from certain. Some Senate Democrats have called for the ouster of Sen. Joe Lieberman (ID-CT) from the committee chairmanship, due to his attacks against President-elect Obama during the presidential campaign and his endorsement of Republican nominee Sen. John McCain (R-AZ). Momentum to strip the gavel from Lieberman appears to be losing ground, however, and he is not expected to be ejected from the Democratic caucus. CQ reported yesterday that Senate Majority Leader Harry Reid (D-NV) met with Lieberman last week and offered him the gavel of the Small Business and Entrepreneurship Committee, but Lieberman rejected the compromise proposal. If Lieberman loses the HSGAC chairmanship, next in line is Sen. Carl Levin (D-MI), but Levin is considered unlikely to give up his chairmanship of the Armed Services Committee. Levin is followed in seniority by Sen. Daniel K. Akaka (D-HI), although Akaka would have to give up his current chairmanship of the Veterans' Affairs Committee. That means that the HSGAC's fourth-highest-ranking Democrat, Sen. Thomas R. Carper (D-DE), who currently chairs the postal oversight subcommittee, could vault to the full committee's lead post. Sen. Susan Collins (R-ME), who was reelected to a third Senate term last week, is expected to remain the ranking Republican on the HSGAC, though her name has been mentioned as a potential pick by the Obama Administration to the Homeland Security Department cabinet post. In the Senate, with the pickup of six, and potentially nine seats once all the votes are counted, Democrats will be able to add at least one extra seat to their majority on every committee. If they were to win all three of the undecided Senate races, they could make an argument to increase their committee majority from two seats to three, but Republicans have the ability to filibuster any organizing resolution setting committee ratios. Either way, Republicans could try to expand the total number of Senators permitted to sit on committees so their members could preserve their seats. If the total number of seats on each panel remained the same, many less-senior Republicans would be forced to give up their committee assignments to make room for the larger Democratic majority. Looking for Tickets to the Inauguration? Landing a seat at President-elect Barack Obama's inaugural swearing-in ceremony on January 20 has become the hottest ticket in Washington, the Washington Post reports. Tickets to the swearing-in ceremony are being distributed by House Members and Senators of the 111th Congress. If you're interested in getting a ticket to the Inauguration, contact your House Member or Senator. Some are still taking constituent requests. Others, due to the high volume of requests already received, are no longer accepting requests. A standing area for individuals without tickets will remain available, and information on this and other alternative attendance options can be found at inaugural.senate.gov. Transition Quick Links The Obama Transition Website Want a Job in the Obama Administration? The Guide to Jobs: The 2008 Plumbook Questionnaire for Job Applicants in Obama Administration Speedup the Transition, Says 2007 NAPS Legislative Conference Keynoter Donna Brazile Bruce Moyer NAPS Legislative Counsel |
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National Association
of Postal Supervisors Legislative and Regulatory Update - November 12,
2008
Election Results Could Mean Change for the Postal Service We have witnessed history. A Democratic electoral headwind swept Sen. Barack Obama into the White House and significantly widened that party's majorities in both chambers of Congress. As we look toward Inauguration Day and the start-up of the 111th Congress, here’s what an Obama White House and a larger Democratic majority in Congress could mean for the Postal Service, its workforce and retirees. The Economy and Postal Service Finances. Congress and the White House will devote their foremost attention over the coming months to curing a sick economy and restoring jobs. For the Postal Service, the sooner the economy returns to normal, the sooner the Postal Service’s finances will become more stable. Postal volume has been in near freefall over the past year as the recession has worsened, falling by 9 billion pieces to 1977 levels. It is likely to decline even more in coming months. Credit card companies are expected to send a billion fewer unsolicited offers to consumers by the end of the year, dropping from 5.2 billion offers last year, according to the Washington Post. The Postal Service will continue to spill red ink in 2009, on top of the $3 billion loss in 2008. These financial pressures, until the economy returns to health, will continue to prompt greater USPS cost cutting and job shedding. The return of the financial health of the Postal Service indeed depends in large part upon the success of the nation’s economic recovery. Postal Service Retiree Health Benefits Fund Payments. As a result of financial pressures, the Postal Service is expected to seek early next year to gain Congressional approval of a change in the payment schedule, imposed by the 2006 Postal Act, that requires the Postal Service to pay $5.4 billion annually into a fund for the future retiree health benefits of today’s workers. These payments are in addition to the $2.3 billion that the Postal Service annually pays as its employer share for current retiree health benefits. The thinking is that if the Postal Service’s payment schedule for future retiree health benefits were revisited and spread out over a longer term, lowering annual USPS costs, that its financial health would be strengthened, without harming retiree health benefits. FEHBP. Although the timeline may be pushed back, the Obama White House is still expected to try to make good on its promise to install a national health care plan, one that, in Obama’s words, is “based on benefits available to members of Congress.” That plan to which Obama referred, of course, is the FEHBP, which covers nine million federal and postal employees, retirees and family members, not merely 535 members of Congress. As the Obama Administration and the Congress craft a health care reform plan, the primary challenge for NAPS and the federal and postal employee and retiree community will be to assure that any national health care plan that comes about is one that runs parallel to FEHBP, and does not absorb FEHBP into a national plan, consolidating its participants and risk pool. Otherwise, health care costs for federal and postal employees and retirees would skyrocket upward. Medicare Part D. An Obama White House may be more receptive to assuring that the Postal Service receives the rebate for the Medicare Part D prescription coverage that USPS makes available to postal retirees, a reimbursement that could provide several hundred million dollars annually to the Postal Service. The Bush Administration had opposed USPS efforts to permit the Postal Service to receive the rebate, which is made available to all employers who provide prescription coverage directly to their retirees. Voting by Mail. The expansion of voting by mail – which could provide additional volume and income to the Postal Service – is likely to pick up steam in 2009. During the past election, more than 25 million voters cast ballots in states where early voting was allowed, including no-excuse absentee balloting, providing convenience for voters and averting overwhelming turnout at some poll locations. The tidal wave of early voters in the recent election may prompt Congress to mandate voting by mail in future elections, at least in federal races. Twenty-eight states now allow voters to cast absentee, mail-in ballots without providing an excuse. Oregon administers its elections entirely by mail. Some states, like California, permit voters to have their absentee ballots sent to their homes for every election. During the last Congress, legislation (H.R. 281 ) that would have forced all states to offer no-excuse mail-in balloting stalled. Although the legislation is likely to be reintroduced in the 111th Congress, its major obstacles are Republican fear that absentee voting will provide a partisan advantage to Democrats (a misguided fear) and the control that states have over deciding voting procedures. That’s why NAPS will continue its efforts in the 111th Congress , but in addition also pursue voting by mail legislation in a dozen or so states (New Jersey, New Mexico, Ohio, Florida, Montana, Minnesota, Michigan, Maryland, Virginia, North Carolina, Nevada, Pennsylvania, Idaho, and Utah) in league with other postal employee organizations and the Voting by Mail Project. Bruce Moyer NAPS Legislative Counsel |
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National Association
of Postal Supervisors Legislative and Regulatory Update - October 30,
2008
NAPS and Postmaster Organizations Say “No” to Pay Concessions The three postal management organizations today informed the Postal Service that they will not agree to either forego or defer the upcoming NPA payouts scheduled for January 2009. During a meeting with the Postal Service and in a joint letter, the presidents of the National Association of Postal Supervisors, the National Association of Postmasters of the United States, and the National League of Postmasters advised the Postal Service that USPS did not have the right “to demand that we re-open pay consultations or change the pay agreement in any way.“ The management organizations indicated that the overwhelming feedback received from their members supported retention of the financial recognition of supervisor and postmaster performance, scheduled for January 2009, and that the payouts cannot be stopped. Meeting discussions, as recorded in the meeting minutes, also covered the recent NALC agreement on route evaluations, District Support positions, Area and District consolidations, Tour Two plant operations and 10 hour/4 day workweeks The management groups reaffirmed their commitment to continue to collaborate with the Postal Service on cost reduction efforts in accord with the organization's mission, and the groups underscored their readiness to support legislative changes that reduce the financial burdens of the Postal Service. Postmaster General Jack Potter in a Washington Post interview today acknowledged ongoing talks with Capitol Hill to adjust the timing of the Postal Service's payment of $5.4B in future retiree health benefit costs, an obligation imposed by the Postal Act of 2006. “It requires the Postal Service today to pay approximately 10 percent of every dollar we take in toward retiree health benefits,” Potter said. Bruce Moyer NAPS Legislative Counsel |
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National Association of Postal Supervisors Legislative
and Regulatory Update - September 18, 2008 In this Issue:
NAPS Celebrates Its Centennial at Successful Convention in Louisville The National Association of Postal Supervisors held a successful national convention in Louisville, Kentucky last week, attended by nearly 1,500 NAPS members, celebrating the 100th anniversary of the association and addressing a variety of business issues. Rep. John Yarmuth (D-KY), whose Congressional district includes the Louisville area, congratulated NAPS convention delegates at the NAPS 100th anniversary banquet and inserted his congratulatory remarks in the Congressional Record. With the excitement of the 2008 Congressional elections building, NAPS delegates contributed nearly $56,000 to the Supervisors’ Political Action Committee, one of the highest totals ever achieved at a NAPS convention. So far this year, NAPS has contributed over $100,000 to 90 House and Senate candidates who support NAPS and a strong postal system. A big THANK YOU to all who contributed to SPAC. Results of NAPS elections for national, regional and area officers are here. Other daily convention bulletins and other convention information are here. PMG Potter Warns of “Perfect Economic Storm”; USPS May Lose $3 Billion by Year’s End Postmaster General Jack Potter, in his address at the NAPS convention last week, reported that the Postal Service will lose more than $2 billion by the approaching end of the USPS fiscal year. “We are struggling,” Potter said, pointing to declining mail volume and a weakening economy. “We’re in a dynamic situation, with greater losses in volume than we’d expected.” Potter’s remarks to NAPS were similar to those he delivered in a Public Customer Council broadcast yesterday, warning of a “perfect economic storm” that threatens to deteriorate mail volume further. Citing fluctuating oil prices, inflation in paper prices and strife in financial markets, Potter described the impact of economic conditions upon USPS as the most difficult since the 1960s, along with the impact of email and questions about mail’s environmental impact that have led to a volume decline of 9 billion pieces this year. “But the economy will bounce back,” Potter predicted optimistically, “and we have to be ready to adapt,” Potter added. The Postal Service reported a net loss of approximately $960 million in August, according to recent reports filed with the Postal Regulatory commission. While year-to-date revenue is slightly above the same period last year, revenue for August was about ten percent below August 2007 in spite of a 2.9% increase implemented in May. Pointing to a “vigorous debate” going on right now at USPS headquarters on 2009 mail volume projections, Potter said that those numbers will influence craft staffing levels, and in turn supervisory staffing. He noted the possibility of movement to 4-day/ten-hour shifts, but continued to insist that USPS will not offer financial incentives coupled with VERAs. “We have to be prudent. In 1992, we paid 46,000 employees a half-year’s salary to go, then ended up rehiring 70,000,” Potter maintained. More details on the Postal Service’s financial situation and possible reorganization will likely be released during next week’s meeting of the USPS Board of Governors. GAO Says USPS Pay For Performance Should Emphasize Delivery Indicators In a report last week to Congress, the Government Accountability Office recommended that the Postal Service incorporate delivery performance indicators in its pay for performance system. Pay for performance determines the annual salary increase for approximately 72,000 EAS and PCES managers and supervisors, who do not receive the cost of living and “step” increases added to bargaining unit employee salaries. GAO recommended that USPS add new delivery performance indicators to PFP, since existing delivery indicators, like EXFC, apply to less than one-fifth of mail volume. GAO said, “As USPS implements requirements of the postal reform law for measuring delivery performance, it will have opportunities to incorporate new indicators into its PFP program, notably for timely delivery of Standard Mail (49 percent of mail volume in fiscal year 2007) and bulk First-Class Mail (25 percent of volume). Once new delivery performance measurement systems are fully implemented and mailers’ participation is sufficient to generate representative data, USPS will be able to incorporate new delivery performance indicators into its PFP program.” To read the report, click here. Bruce Moyer Legislative Counsel to NAPS
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National Association of Postal Supervisors Legislative and Regulatory Update - August 7, 2008 In this Issue:
NAPS Challenges USPS Network Plan, Questions USPS Outsourcing The National Association of Postal Supervisors has questioned the Postal Service's plans for the use of contracting out in realigning its mail processing and distribution network and has encouraged Congress to ask the Postal Service where it's headed in its reliance on private contractors to process and transport mail. In an August 5 letter to Rep. Danny Davis (D-IL), chairman of the House panel that oversees the Postal Service, NAPS President Ted Keating challenged the Network Plan the Postal Service recently sent to Congress and the Service's lack of explanation of the role it intends outsourcing to play in modernizing mail processing and transportation activity. Keating pointed to USPS efforts to contract-out processing and transportation operations at its Bulk Mail Centers as raising significant policy concerns that "could represent a significant step toward the privatization of postal operations." The Postal Service on July 1 issued a draft Request for Proposal to create a "Time Definite Surface Network" (TDSN) that envisions outsourcing all mail processing and transportation activity currently performed by the 21 BMCs within the USPS mail network, starting with those in Chicago, Cincinnati, Detroit, St. Paul, Atlanta and Seattle. Bulk Mail Centers are highly mechanized mail processing plants that distribute parcel post, media mail, standard mail and periodicals in bulk form. "If BMC activity is ultimately outsourced through the TDSN initiative, does the Postal Service intend to extend outsourcing to all of its Processing and Distribution Centers and related transportation activities?" Keating asked Congress. "What is the ultimate goal? Is this the first phase of wider reliance on privatization of mail processing and distribution? Does the Service ultimately intend to contract out all processing and distribution of mail, if it believes that service standards and customer service can be maintained at acceptable levels?" Keating also took aim at the USPS Network Plan itself, criticizing USPS for providing few new details to Congress, which mandated in the 2006 postal reform law that the Postal Service provide a comprehensive report on how intended to modernize the processing/transportation backbone of the postal network. Keating called the plan the USPS sent to Congress a "strategy without a destination." "The Postal Service's faith in a 'fluid approach' toward network realignment, as evidenced in the Network Plan," Keating said, "is largely a continuation of the zigzagging we have witnessed since 2001, from the Network Integration and Alignment program, to the Evolutionary Network Development program, to the most recent efforts involving ill-fated Regional Distribution Centers." "There is one potentially distinct difference in the latest iteration, however," Keating warned. "The single-most important development in the Network Plan is the one whose possible consequences are left the most unaddressed. Left unanswered is the role of outsourcing in the Postal Service's vision of network realignment and whether the Service intends to apply outsourcing toward the entirety of its processing and distribution operations ..." "We regard these omissions as flaws in the transparency and completeness of the Network Plan, as well as the creation of understanding by the Postal Service stakeholders and the public of the implications of these steps." Keating encouraged the Postal Service to provide answers to the Congress and postal stakeholders, including the Postal Regulatory Commission, and explain the relationship between the TDSN outsourcing initiative and future efforts to modernize and cut costs in USPS processing and distribution centers and other facilities in the mail network. The potential for USPS outsourcing to private contractors of the responsibility for processing and distribution of mail, in light of stalled USPS efforts to privatize mail delivery, holds huge implications -- both financial and political -- for the USPS, not to mention its 700,000 employee workforce. There are well over 300 processing and distribution plants in the Postal Service's mail network, providing jobs to tens of thousands of postal workers and economic heft to the surrounding communities in which the plants are located. At the same time, considerable excess capacity in many plants exists, worsened by the continued decline in mail volume, likely necessitating further facility consolidations and closures, even if the work continues to remain within the Postal Service. At a July 24 hearing of the House Subcommittee on the Federal Workforce, Postal Service and the District of Columbia on the USPS Network Plan, Subcommittee Chairman Danny Davis in his opening remarks focused on the need for USPS to adopt a smarter approach toward downsizing the postal network, saying, "For this effort to be successful the Postal Service MUST do a better job of realigning its processing and transportation networks, improve the data used in its computerized and statistical modeling, and minimize service disruptions. Failure to prevent and predict service problems will result in poor mail delivery, which in turn will anger the public and trigger political considerations." Preserve Universal Service and the Mailbox Monopoly, NAPS Tells the PRC Urging the Postal Regulatory Commission to listen to the scores of witnesses over the past two months who have urged the continuation of current national policy that guarantees postal service to all Americans, no matter where they live or work, NAPS President Ted Keating last week told the Postal Regulatory Commission that "there is broad public consensus for the preservation of the universal service obligation and the postal monopoly." Keating's remarks were part of comments filed by NAPS with the Commission, in connection with the PRC's inquiry (Pl2008-3) into the future of the universal service obligation and the USPS monopoly on First-Class Mail. The PRC is required by the 2006 postal reform law to report to Congress by December 19 on its findings and recommendations growing out of its inquiry. Keating also encouraged the PRC to affirm the value of six-day mail delivery. "Unless the Commission finds that there are cost savings and collateral merit so significant as to convincingly demonstrate the viability of an alternative delivery schedule," Keating said, "six-day delivery should also remain the norm." "The public expects no less." Noting that FedEx and the National Newspaper Association had urged the PRC to relax the mailbox monopoly and permit homeowners to indicate whether they would like to receive unstamped mail from registered companies in their mailboxes, Keating urged the Commission to turn down that approach and "affirm and maintain the privacy and integrity of the mail through preservation of the mailbox rule." That approach, which gives USPS exclusive access to all mailboxes, would extend the same policy that the Congress and the President embraced in enacting the 2006 postal reform law, Keating noted. USPS Announces Greater Quarterly Loss Than Expected A continued decline in mail volume, aggravated by a national economic slowdown and higher fuel prices, pushed the Postal Service further into the red for the last quarter, the USPS announced yesterday. The loss mirrors what's been going on in the logistics and mailing industry and throughout the nation. The USPS ended its third quarter (April 1 - June 30) with a greater-than-expected loss of $1.1 billion. Mail volume dropped by 5.5 percent compared to the same period last year. First-Class Mail and Standard Mail volume were each down 5.5 percent, reflecting the "challenging economic environment," USPS said. "When the economy does rebound, mail volume may not return to previous levels," Postmaster General John Potter warned in a statement. "This requires that we significantly accelerate process improvements and the realignment of resources in order to achieve long-term financial success. Failure to do so will threaten our ability to meet our mission of providing universal service at affordable prices." While USPS operating expenses inched upward only 1 percent for the quarter, despite substantial increases in gasoline costs, operating revenue fell by nearly 2.4 percent, a decrease of $437 million compared to the same period last year. The good news was that on-time delivery performance reached record highs for all categories of First-Class Mail tracked by the Postal Service. Overnight service was 97 percent on time, up from 96 percent in the same period last year. Financial uncertainties further prompted the Postal Service to refrain from announcing a pricing structure for its use of the Intelligent Mail Barcode, which USPS continues to promise will be ready for use by mailers in May, 2009. " ... [G]iven the volatility of the economy, decreasing mail volumes and our own financial situation, it would be premature for us to commit to a pricing structure for the Intelligent Mail barcode at this time," Tom Day, Senior Vice President, Intelligent Mail and Address Quality told the Mailers' Technical Advisory Committee yesterday. For the Postal Service, Intelligent Mail and the underlying intelligent mail barcode is the greatest thing since sliced bread. It is expected to revolutionize the way USPS accepts, processes and transports mail, by informing mailers when a piece of mail enters the mail stream and journeys through the postal network and into the hands of the intended recipient. Bruce Moyer Legislative Counsel to NAPS |
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National Association of Postal Supervisors Legislative and Regulatory Update - July 31, 2008 House Approves FERS Sick Leave and Thrift Savings Reforms The House of Representatives has approved legislation http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.01108: that would give employees covered under the Federal Employees Retirement System largely the same retirement credit for unused sick leave as already applies to workers covered under the older Civil Service Retirement System. Also included in the House-passed measure are improvements to the Thrift Savings Plan. The conferral of FERS sick leave credit has been a legislative goal of the National Association of Postal Supervisors. The FERS sick leave approach approved by the House last night is more generous than that originally proposed in FERS sick leave legislation http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.05573: introduced earlier this year by Rep. James Moran (D-VA) http://thomas.loc.gov/cgi-bin/bdquery/z?d110:HR06500:@@@L&summ2=m&. Under the measure approved by the House, FERS employees who retire within three years of the bill's enactment would receive service credit, in the computation of their pension, for 75 percent of their accrued sick leave at the time of retirement. Those who retire three years after enactment would receive 100% credit for all of their unused sick leave. Moran's original proposal would have provided a cash payout to FERS employees of up to $10,000 for unused sick leave. Delighted with the more generous approach approved by the House, Congressman Moran in a statement http://moran.house.gov/apps/list/press/va08_moran/SickLeavePass.shtml said, "Our current use-it or lose-it sick leave system for FERS employees hurts productivity and increases training costs." "We need to be incentivizing the accrual of sick leave, not encouraging people to call in sick in the weeks leading up to retirement. With today's passage, we're putting FERS employees on par with their CSRS colleagues, replacing a flawed approach to sick leave with one proven to work in everybody's favor." The FERS sick leave provisions were included in a larger measure approved by the House that would grant the Food and Drug Administration authority over tobacco products. The bill, the Family Smoking Prevention and Tobacco Control Act (H.R. 1110 http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.01108), was approved by a 326-102 vote <http://clerk.house.gov/evs/2008/roll542.xml. It would require the FDA to regulate the labeling and advertising of tobacco products and ban flavored cigarettes excluding menthol. The tobacco measure also includes provisions that would improve the Thrift Savings Plan, including the automatic enrollment into the TSP of of newly-hired eligible federal and postal employees and members of the military. It also would authorize the Federal Thrift Retirement Investment Board to establish a Roth contribution plan and self-directed investment options within the TSP. It is the addition of the Roth contribution plan option that, under Congressional budget scoring rules, would provide additional federal revenue, making possible the more generous, CSRS-like FERS sick leave formula. The Roth revenue also offsets the loss of federal tobacco taxes from an anticipated decline in smoking. The tobacco bill, including the FERS and TSP provisions, now moves to the Senate, where its prospects are uncertain. The bill enjoyed wide bipartisan support in the House, but few days remain in the legislative calendar, and Republican leaders and the Bush administration are opposed to the tobacco provisions. The White House has threatened to veto the bill, arguing that it would disproportionately tax low-income Americans, through user fees assessed against tobacco companies to raise funds to underwrite FDA's regulatory efforts. The Postal Supervisors and other postal and federal employee groups will continue to push for enactment. Bruce Moyer Legislative Counsel, National Association of Postal Supervisors
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National Association of Postal Supervisors Legislative and Regulatory Update - July 22, 2008 In This Issue:
USPS Announces Early Out Details for Some Supervisor Positions The Postal Service has released details of the voluntary early retirement (VER) offer for USPS employees in supervisor of distribution operations and supervisor of customer services positions, as well as clerk and mail handler positions. The USPS voluntary offer, recently approved by the Office of Personnel Management, will extend to approximately 20,000 employees -- including approximately 5,300 EAS employees -- who are at least 50 years of age with 20 years of creditable federal service or any age with 25 years of creditable federal service. Eligible employees will have from August 25 to September 30 to accept the VER offer and submit their retirement application. The effective date of retirement will be January 3, 2009. According to USPS, it will mail an annuity estimate to all VER-eligible employees on August 18, followed on August 22 by a VER offer packet containing application materials and further information on the VER offer. The September 30 due date on the employee's filing of the VER acceptance paperwork is also the date on which an employee's voluntary choice to retire will become irrevocable. USPS says that by mid-November, the Human Resources Shared Services Center will notify employees as to the status of their VER application. House Hearing Will Examine USPS Network Realignment Plans A House panel will hold a hearing on Thursday, July 24, on Postal Service plans to realign its processing and transportation postal networks. The hearing of the House Subcommittee on Federal Workforce, Postal Service and the District of Columbia, titled "The Three R's of the Postal Network Plan: Realignment, Right-Sizing, and Responsiveness" will look at the impact of USPS realignment plans upon the public, the postal workforce, the mailing industry and the economic health of the Postal Service. Witness testimony is expected to include an assessment from the Government Accountability Office, which has been critical of USPS network planning efforts in the past. NAPS officials will monitor Thursday's hearing, and may file comments with the Subcommittee on the network realignment issue if warranted. Over the past two months, USPS has issued two important documents on network realignment: a network realignment strategy report, required under the postal reform law; and a draft RFP for a Time-Definite Surface Network, proposing to realign the Bulk Mail Centers and outsource to a private contractor the responsibility for sorting and end-to-end movement of origin-entered Standard Mail and Periodicals, as well as destination-entered Package Mail. The Postal Service has indicated that its current processing and distribution facilities were built when all mail entered the network at origin. Today approximately three-quarters of all mail is entered at destination, generating excess capacity. The USPS network strategy document, which revealed few new details, reaffirmed continuing USPS intent to reorganize its processing and transportation networks, potentially leading to the elimination of significant numbers of jobs, starting at airport mail centers and continuing to mail processing plants and bulk mail centers. USPS did not identify in the report which facilities it is considering for further consolidation, indicating only the intent to continue to assess the feasibility of further restructuring through the use of "recently enhanced" AMP guidelines. The draft RFP for the Time-Definite Surface Network, issued on July 1, anticipates USPS award of the BMC-related work through a contract to a single private sector contractor, with the contractor barred from subcontracting any portion of the distribution work. The contract would cover eight years, with the possibility for extensions for another six years. Activation of the network would occur within 18 months after the contract was awarded. Comments on the draft RFP by interested parties are due to USPS by August 1, PRC Universal Service Study Could Moot Congressional Inquiry on 5-Day Delivery Even if Congress commissions a study on the cost-effectiveness of 5-day mail delivery, as approved recently by the House Appropriations Committee, that inquiry will be preceded by another, potentially more conclusive study already underway by the Postal Regulatory Commission, as part of its report on the universal service obligation and the postal monopoly. The PRC report is required to be completed and sent to Congress by mid-December. Congress is not likely to approve a 5-day delivery study, at the earliest, until February, 2009, when the final version of the funding bill, in which the 5-day delivery study is tentatively lodged, comes up for approval, according to the timetable announced by Congressional leaders. And it is possible that the 5-day delivery study could be dropped from the final version, especially if the Senate opposes its inclusion. Ann Fisher, Acting Director of Public Affairs and Government Relations, confirmed to NAPS that the PRC's report on the universal service obligation would address the five-day versus six-day delivery issue. "The extent to which the PRC efforts would overlap any [Congressionally-ordered] study that might be conducted in response to the Kingston amendment would depend on the design of that study, " Fisher said in an email. The House version of the FY 2009 Financial Services and General Government appropriations measure, as approved by the House Appropriations Committee on June 25, includes an amendment, proposed by Rep. Jack Kingston (R-SC) requesting "a report on the cost effectiveness and fuel consumption of a five-day delivery system and the efficiency and consumer demand of Saturday delivery services of the United States Postal Service." Kingston said his amendment was prompted by concern over the fuel use and cost-effectiveness associated with six-day delivery, According to Kingston, an estimated $85 million in annual fuel savings would be accomplished by five-day delivery. Kingston did not estimate how much USPS would actually save in total terms by a move to five-day delivery. NAPS President Ted Keating, during his July 10 testimony before the Postal Regulatory Commission at its fourth and final public hearing on the USO study, strongly urged the continuance of six-day delivery. "While declining First Class mail volume and rising fuel costs will require the Postal Service to continue to consider and undertake measures necessary to assure the core viability of secure, efficient and affordable mail service, we believe six-day delivery service should continue," Keating testified. All union and management association leaders joined Keating in urging the Commission to support the continuation of universal service as we understand it today -- affordable and dependable service to every American, six-day-aweek delivery, the mailbox monopoly, and equal, affordable access to services. Keating reminded the PRC commissioners, "You have more than 200 years experience on this panel, and I think it's relevant that postal management and labor are delivering the same message." Editor's Note: Interestingly, the debate on Capitol Hill surrounding the future of Fannie Mae and Freddie Mac, the private companies that bolster the nation's housing market, mirrors in some respects the public policy tension underlying universal service and study by the PRC. In the Fannie/Freddie debate, Congress is wrestling with whether to commit billions of dollars to financially prop up two private corporations whose mission fulfills a necessary and public purpose in the country's mortgage market. While the USPS is not a private corporation, the same private operating/public mission expectations apply to the Postal Service. Though the U.S. Postal Service is a government corporation, not a private company, it is expected to fulfill a very public mission. Yet it is also expected to turn a profit, walk and talk like a private business. Question: Were the USPS to fail, how many billions of dollars would the Congress be ready to commit to assure its solvency? Bruce Moyer Legislative Counsel, National Association of Postal Supervisors |
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National Association of Postal Supervisors Legislative and Regulatory Update -- July 7, 2008 In this Issue: * Postal Service Seeks Early Out Authority as Restructuring Plans Emerge * Congress Pursues Pared-Down Agenda * House Panel Approves Five-Day Delivery Study * NAPS to Urge Preservation of Universal Service Postal Service Seeks Early Out Authority as Restructuring Plans Emerge The Postal Service reportedly has requested Voluntary Early Retirement Authority (VERA) -- more commonly known as "early out authority" -- from the Office of Personnel Management, to seek permission to temporarily lower the age and service requirements to increase the number of USPS employees eligible for retirement. Details on the VERA request are sketchy, but the pursuit of VERA is not surprising, given the need for the Postal Service to pursue significant cost-cutting moves to offset falling First-Class mail volume and rising costs, especially as soaring gas prices flatten USPS profits. VERA theoretically encourages more voluntary attrition in order to permit an agency to pursue downsizing and restructuring with minimal workforce disruption. Acceptance rates by Postal employees to early-out offers in past restructuring efforts have been mixed at best. According to unconfirmed reports, the Postal Service will target the next round of early-out offers to specific areas, but without the aid of buyouts or additional financial incentives to sweeten their appeal. The Postal Service also recently announced plans to continue efforts to reorganize its processing and transportation networks, potentially leading to the elimination of significant numbers of jobs, starting at airport mail centers (AMCs), and continuing to mail processing plants and bulk mail centers. In a "network rationalization report" released to Congress on June 20, the Postal Service revealed few details on which facilities would be identified for further consolidation, indicating it planned to continue to asses the feasibility of further restructuring through the use of "recently enhanced" AMP guidelines. The USPS also announced in the report that it would continue to explore the potential of outsourcing the processing and transportation of mail in the Bulk Mail Center network through its Time-Definite Surface Network program. As Federal Times recently reported, the Postal Service also may outsource some BMC sorting functions to private companies, reportedly to free up space to install Flats Sequence System equipment. The Postal Service indicated it could take up to two years to further solicit expert and public opinion to decide which plants and BMCs to realign. Congress Pursues Pared-Down Agenda Congress returns this week from its July 4th recess, with relatively little time remaining in the session to accomplish much besides passing housing foreclosure assistance and terrorism wiretapping bills -- and continue to engage in partisan sniping as November's elections draw closer. A "pared-down summer agenda" is how the Washington Post described the work likely to get done in the abbreviated election-year calendar, with lawmakers departing tin August for a month-long break and the two parties' presidential conventions , followed in September by posturing over FY 2009 budget issues, with adjournment in early October for the final campaign stretch. That means that most, if not all of the issues promoted by NAPS -- from voting by mail, to Social Security fairness (GPO/WEP), to premium conversion, to veterans reassignment protection, will likely be punted into 2009 and the 111th Congress. House Panel Approves Five-Day Delivery Study The House Appropriations Committee has approved an amendment requiring the Postal Service to study the merits of a five-day delivery system, both in terms of its cost-effectiveness and its impact on fuel consumption. The provision was added to the FY 2009 Financial Services and General Government appropriations measure, approved by the Committee on June 25. The bill, which includes nearly $112 million in funding for the Postal Service, now goes to the full House for approval; the Senate has not acted on its funding bill. The five-day delivery study requirement was proposed by Rep. Jack Kingston (R-GA) , who in a statement said, "I’ve been trying to get the postal service to end Saturday delivery for years." "It's a perfect example of government waste that is driving up the price at the pump. I can't think of the last time I got anything but a bill in the mail and, frankly, those can wait until Monday. Now my kids get all of their bills by email. What other way can the government immediately save 20.8 million galls of gas thereby reducing consumption and gas prices?" Kingston, a conservative Congressman from southeastern Georgia who, during his 16 years in Congress, has crusaded for smaller government, estimated that the Postal Service would annually conserve nearly 21 million gallons of gasoline and save $85 million on fuel costs through five-day delivery... "This is just one way to bring down the cost of fuel," Kingston said. "While some oppose this idea, this study will at least give us hard numbers on which we can make an informed decision." The Congress has mandated that the Postal Service provide six-day delivery to all parts of the country since 1983, through a requirement inserted in annual appropriations measures. Even if Congress refrained from continuing the six-day-delivery requirement, and the USPS sought to move to five-day delivery, the Postal Regulatory Commission would still need to approve the change. NAPS to Urge Preservation of Universal Service NAPS President Ted Keating on Thursday will urge the Postal Regulatory Commission to lend its support to the preservation of the universal service obligation and the postal monopoly. Keating's remarks will call upon the Commission to affirm the well-established principle that all Americans, no matter where they live, are entitled to secure, efficient and affordable postal service. Mr. Keating will appear with the presidents of several other postal employee organizations before the Commission at a hearing at the PRC's headquarters on Thursday morning, July 10. The hearing is the fourth of a series of hearings the PRC has held around the country, as it prepares its study on the universal service obligation and the postal monopoly. The report, due to Congress in mid-December, is required by the Postal Accountability and Enhancement Act. Bruce Moyer NAPS Legislative Counsel |
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