The debate about the Postal Service’s future is heating up and Pushing the Envelope is interested in your views. Last week the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security held a hearing on the Future of the Postal Service. The week before there was a hearing in the House on the Postal Service’s financial crisis and future viability, and on April 12, the Government Accountability Office issued a report laying out the strategies and options to maintain the Postal Service’s viability.
Some of the strategies under discussion include:
• Ending Saturday delivery.
• Reducing the size of the workforce.
• Making postal employees pay the same share of health and life insurance premiums that other federal employees pay.
• Generating revenue through new products.
• Allowing the Postal Service more pricing freedom.
• Restructuring the Postal Service’s network of mail processing facilities.
• Moving retail services from Post Offices to alternative access options.
One item that is generating a great deal of discussion is whether the large payments the Postal Service must make for retiree health benefits should be restructured. One option is to give back some of the excess pension funding and allow the Postal Service to use these funds for other purposes. In January, the Office of Inspector General for the Postal Service issued a report that found the Postal Service had been overcharged $75 billion for its pension obligations from 1971 to 2009 because of an inequitable method of calculating the size of those obligations. Adding to this inequity is the fact that the Postal Service is currently required to fund 100 percent of its retiree health and pension obligations. Very few in private industry do this, and the rest of the federal government’s pension funding level is only 41 percent. In addition, the OIG believes that the forecast of the Postal Service’s future retiree health care costs is too high. Fixing these issues could save the Postal Service $7 billion a year.
What do you think? Which strategies will be most useful to the Postal Service? Should the mix of strategies include cutting delivery service?
This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).