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Bipartisan Postal Reform Members Ask GAO to Settle Postal Overpayment "Issue" Once and for All

Washington, Sep 30 -

Lakeland, FL – Congressman Dennis A. Ross (R-FL), Chairman of the Federal Workforce, Postal Service & Labor Policy Subcommittee, today released a copy of a letter sent to GAO, signed by the bipartisan leadership on the issue of postal reform.

Postal unions have consistently claimed the service is “owed” $75 billion because of “overpayments” into CSRS retirement funds. This week’s nationwide protests at Congressional offices by postal employees was intended to underscore this claim. OPM and editorial boards have consistently recognized no overpayment. Republicans in the House remain committed to opposing any taxpayer bailout of the Postal Service and want to determine, once and for all, the extent of any financial issue, if any.

On top of the issue of a bailout, Chairman Ross, along with Full Committee Chairman Darrell Issa, has introduced HR 2309, The Postal Reform Act (www.savingthepostalservice.com) that would address the challenges facing the Postal Service, require market reform and give postal leadership greater flexibility to operate the service as it was intended – like a business.

The letter to GAO was signed by and is as follows –

Chairman Rep. Darrell Issa
Rep. Dennis Ross
Rep. Elijah Cummings
Rep. Stephen Lynch
Chairman Sen. Joe Lieberman
Sen. Tom Carper
Sen. Susan Collins
Sen. Scott Brown

September 15, 2011

The Honorable Gene L. Dodaro
Comptroller General of the United States
U.S. Government Accountability Office
441 G St. NW
Washington, DC 20548

Dear Mr. Dodaro:

The U.S. Postal Service (USPS) is facing deteriorating financial conditions as mail volumes– the primary source of revenue–continue to decrease at faster rates than projected. USPS has experienced a cumulative net loss of nearly $20 billion over the last 5 fiscal years, including an $8.5 billion loss in 2010; and a reported net loss of $5.7 billion in the first 9 months of fiscal year 2011. By the end of this fiscal year, USPS projects that it will incur a $10 billion loss, experience a substantial cash shortfall, reach its $15 billion borrowing limit, and not be able to make its statutorily mandated $5.5 billion retiree health benefits payment to the federal government.

USPS, several members of the House and Senate, and a variety of stakeholders have proposed a number of operational and restructuring options to address USPS’s dire financial situation, and have also made certain claims and recommendations regarding the financing of its retirement obligations. Among these is the assertion by the USPS Office of Inspector General, the Postal Regulatory Commission, and two outside accounting firms these agencies contracted with that USPS has overfunded its obligations to the Civil Service Retirement System (CSRS) by as much as $75 billion. Legislation has been introduced in both the House and the Senate to give the Postal Service access to the funds it is alleged to have overpaid into CSRS. Meanwhile, the Office of Personnel Management (OPM), its Office of Inspector General, and other stakeholders have called the existence of a USPS overpayment into CSRS into question.

Given the substantial amount of funds at issue, the potential impact on the OPM-administered CSRS fund of giving USPS access to the funds some believe it has overpaid, and the need to resolve conflicting information and positions about this issue, we request that GAO: (1) determine if the current methodology employed by OPM for allocating obligations between USPS and the federal government for CSRS is consistent with the law; (2) comment on the actuarial analysis the USPS IG and Postal Regulatory Commission are using in their assertion that OPM should refund the CSRS contributions in question; and (3) comment on (a) the potential impacts that such a refund would have on the CSRS fund and CSRS stakeholders, (b) USPS’s financial outlook, and (c) other impacts you may identify.

We would appreciate a briefing on these issues by the end of September with a report to follow by the end of October. If you have any questions, please contact …

via Bipartisan Postal Reform Members Ask GAO to Settle Postal “Overpayment” Issue Once and for All | Congressman Dennis Ross.

  • Linda

    It’s about time.

  • Give me break

    This letter was dated Sept. 15, 2011 and they are requesting an answer by today? Good luck with that.

    Am I the only one who finds it strange that the department that took the overpayments for many years is now being asked to validate if they owe USPS any money?

    Sounds like the fox watching the hen house to me!

    These audits weren’t good enough:

    Among these is the assertion by the USPS Office of Inspector General, the Postal Regulatory Commission, and two outside accounting firms these agencies contracted with that USPS has overfunded its obligations to the Civil Service Retirement System (CSRS) by as much as $75 billion.

    I am sure I am not the only one who thinks this request is a sham.

  • brian

    “Am I the only one who finds it strange that the department that took the overpayments for many years is now being asked to validate if they owe USPS any money?”
    Probably. Because your question misstates the facts.
    The “department that took the over-payments” is the Office of Personnel Management, which reports to the President. The agency “being asked to validate if they owe USPS any money” is the Government Accountability Office, which belongs to the Congress. They’re not only two completely different agencies, they’re in separate branches of the government.

  • M. Jamison

    As much as I’ve advocated for a robust Postal Service I have to admit that the question at hand is not as clear cut as some of us would like it to be. The PRA didn’t anticipate the issue simply because the accounting practice for the transfer of benefits between entities was in its infancy. Subsequent legislation left Congress’ intent on the issue somewhat murky.
    The underlying rationale offered in the Siegel report makes clear that GAAP (generally accepted accounting practice) would find equity in acknowledging the over payment. That however is only part of the issue. Laws and procedures change all the time and we don’t always go back and rectify every past injustice. Solving this might provide a clear path forward although the FERS over payment and correcting the idiocy behind the retiree health care pre-funding would do just as much in that vein.
    The real issue is how we envision the Postal Service. If it is just another mailing business then the same ideological arguments that are driving the current discussion remain, the transfer of funds only puts off the inevitable. It is essential that we recognize that the preservation of universal service and the value of the Postal Service is its place as infrastructure are at the core of a sustainable strategic vision for the USPS. None of the proposed political solutions nor nothing coming out of L’Enfant Plaza have that critical understanding.

  • rep

    Are the rest of the government agencies funded? I don’t think so! The government has been using the postal service as it’s’ private bank. How much is in the fund for the rest of the government? The money comes out of the federal employees pay check every two weeks but where does it go?

  • Give me break

    Brian,
    Thank you for the clarification. I did think it was OPM that was doing the review-guess I should have paid more attention to the post heading……

  • brian

    It doesn’t have anything to do with your paycheck. You pay the same percentage for the same pension as any other federal employee. The issue is the amount the USPS is charged- that comes from USPS revenue, i.e. our customers. Both your contributions and the USPS contributions go into the pension plan trust accounts. The issue isn’t where the money goes, it’s why too much is being charged.

  • J

    I find it strange that all parties involved haven’t used a independent accounting firm to survey the funds in question as well as the accounting process that is used!

  • Rich

    It is truly a joke that one agency said we overpaid. Now all we hear from the GOP is that they don’t believe any of it. They are looking for proof.What a JOKE! All the postal service needs is to tap this overfunding and we would be ok. I am a 36 yr. employee and I have seen and heard all the bull through the years. It is time the GOP stop trying to kill the P.O. and the middle class .Everyone with half a brain knows where our!!! money is.THANKS!

  • Dave

    It says in the article that 2 “outside” accounting firms were contracted with by the USPS and the Postal Regulatory Commission:

    “Among these is the assertion by the USPS Office of Inspector General, the Postal Regulatory Commission, and two outside accounting firms these agencies contracted with that USPS has overfunded its obligations to the Civil Service Retirement System (CSRS) by as much as $75 billion.”

    On another related note, I noticed that H.R. 1351 now has 220 co-sponsors (221 in all including the sponsor). Only 218 votes needed to pass the House! I know that sponsorship is primarily symbolic but does anyone know if having over 218 sponsors increases it chances of coming up for a vote? Or will Issa still be able block it?

  • Pete

    I notice that they did not ask the most important question:

    HAS THE USPS OVERPAID IT’S RETIREMENT FUND.

    They danced all around the real question, and made sure that the GAO had plenty of wiggle room.

  • jeff

    when will our government wake up and realize that we can greatly help the recovery in this great country of ours. the postal service can be a huge cash cow and help to reduce this countrys deficit. we bring in huge amounts of money every year. instead of allowing the current attempts to lay off our people and downsizing to continue we should be on the attack and going after more business and expanding. i am a letter carrier and can see the good that we do every day not just delivering the mail but actually helping other people in a myriad of ways. we are the face that represents the government and people trust us. remember the people that are trying to dismantle us are doing so for their own gain and not for we the people.

  • Pat

    @Dave– Yes, my understanding is that now that HR1351 has the necessary co-sponsors, it HAS to be released out of committee for a vote. Very encouraging.

  • Steve

    Who kidding who, Just give us our darn pink slips already. I need a vacation, a nice long one at that. If anyone is worried, please don’t be. We all are entitled to unemployment benefits and we can collect this for a while. When those benefits run out, it’s off to the social security office for a disability. And why this will work because there are so many people today abusing our system. That’s what today government wants. They want us to depend on them. So okay I am so ready, I have gotten so tired of all this garbage anyways, so let the games began. Oh yeah, my mortgage, what mortgage that’s what bankruptcy is for, see everything works out.

  • cpttuna

    I can’t believe that the president can’t just pickup the phone,make a call and the proper people jump through their asses until a proper answer on the funds is reached.

  • ljm

    YES-H.R.1350 NO-H.R.2309 Write, call, visit your Congressperson! LET THEM KNOW THE VOICE OF THE PEOPLE!!!

  • commonlaw

    HR 1351 has been around since April and is going nowhere soon. I understand it is being blocked by Issa.
    His bill is out and in both the house and the Senate…..thay want this one to become law to dismantle the service. As for the Whitehouse intervening…look what they did with both Wisconsin and Ohio….no shows for the Public Employees.

  • commonlaw

    This guy is a piece of work……read the entire bio

    http://en.wikipedia.org/wiki/Darrell_Issa

  • Bob

    Keep in mind people..If Issa gets his way and shreds the contracts..guess what? The day him and ross do that is the day every postal employee in the nation goes on strike. Thats right strike. If they throw out everything then there is no law against it. Heres the kicker…the only place the strike should take place is in issa and ross;s districts

  • bill H

    Notice that the question they asked was is “determine if the current methodology employed by OPM for allocating obligations between USPS and the federal government for CSRS is consistent with the law”. They did not ask determine if the law requires the Postal Service to assume an unfair share of retirement obligations for past Post Office Department Service. I dont think the dispute is that OPM is not following the law the way it way written, The law is the problem, It made the Postal Service provide an unfair share vs the goverments share of retiremenet benefits for employees who worked for both the old Post Office Department and the USPS. The Seigal report said OPM was following the law but the law did not not allocate responsibility for the benefits fairly.

  • Dave

    @Pat- I also thought that once HR 1351 had over 217 co-sponsors it had to be released from Issa’s committee, but after a little research-I don’t think so. It does give us the moral high ground to put pressure on Issa to release it, but sponsorship seems to be only symbolic-nothing binding.

  • Danny J

    I believe bill H has some insight…

    Please note that nobody says that the CSRS account has a SURPLUS. Even reaching agreement that the Postal Service may have paid more than is appropriate does not actually find the money for a refund. You may be sure that the other agencies who have presumably UNDERpaid have no money to spare. Therefore any money to rescue the postal Service would have to be borrowed–hence the persistent references to ‘bailouts’.

    • brian

      It’s not a question of “finding the money for a refund”. It’s strictly an accounting issue. If it’s determined that the USPS has overpaid, money shifts from the CSRS fund to the USPS fund. If that means the CSRS fund doesn’t have enough money, then Congress has to appropriate more. That’s not a bailout- it’s a recognition that the CSRS fund balance was being artificially inflated by excess contributions from the USPS. “Other agencies” haven’t overpaid or underpaid- Congress appropriates the funds to cover the employer share for non-postal federal employees.

  • Timbo

    No accounting agencies, no bills are going to bring that money back. IT HAS BEEN SPENT WHILE WE SLEPT, and you will never find out where it all went.