In an interview with the Wall Street Journal, Postmaster General Pat Donahoe expressed optimism about the agency’s future, and pointed to reductions in staffing and expenses the USPS had achieved despite the lack of Congressional action. He also appeared to confirm fears that the USPS might provide higher levels of service to some affluent communities, even as it reduces services across the country.
He told the WSJ that the USPS had reduced staffing by 200,000 employees since 2006. While accepting that labor costs account for 80 percent of postal service expenses (and that “it will always be that high”), he pointed to the fact that twenty percent of the current staff are non-career part time workers. Curiously, he suggested later in the interview that the percentage would drop in the future, telling the interviewer that the USPS “in the near term” required about 400,000 career emplyees, and 60,000 non-career. That works out to a non-career percentage of 13%.
Continued staffing and cost reductions would depend on Congressional action to allow the USPS to eliminate Saturday mail delivery, but the PMG promised “package delivery seven days a week in ZIP codes that can support Sunday”.
Donahoe also said that while the USPS would continue to seek partnerships with the private sector, he doesn’t think it should be privatized.
Note: According to Postcom.org, consideration of S. 1486 has been postponed.
The eNAPUS Legislative and Political Bulletin includes an analysis of the latest Senate postal reform legislation set to be voted on in committee next week:
Yesterday, Senate Homeland Security Chairman Tom Carper (D-DE) notified his committee members that S. 1486, the Carper-Coburn postal reform bill, will be brought to a vote next week, on Wednesday, November 6. In addition, on that day, the Committee plans a confirmation vote on Nanci Langley and Tony Hammond to continue as members of the Postal Regulatory Commission (PRC).
While S. 1486, as drafted, provides a measure of financial relief and enables the USPS to be more innovative, contention remains in three major areas. With regard to FEHBP coverage, there is overwhelming consensus that the USPS is incapable of administering its own health benefits plan and, therefore, the final bill should offer coverage through the FEHBP. Another issue commanding attention is improving integration between FEHBP and Medicare… Second, mailers object to giving the USPS more latitude to adjust rates for market-dominant products… Third, there is concern S. 1486 does not adequately address postal service standards. For example, NAPUS believes that S. 1486 should include the retail service standards and PRC post office closing provisions that were included in last year’s bipartisan Senate-passed measure.
As part of its Senate testimony, the Governmane Accountability Office released a report on USPS proposals to pull employees and retirees out of FEHBP- here’s the summary:
Why GAO Did This Study
USPS continues to be in a serious financial crisis, with little liquidity in the short term and a challenging financial outlook in the long term as profitable First-Class Mail volume continues to decline. Critical decisions by Congress are needed on postal reform legislation that has been proposed in both the U.S. Senate and the House of epresentatives. Various proposals would restructure the financing of postal retiree health benefits, including required payments to prefund these benefits; enable USPS to introduce a new health plan for postal employees and retirees; and restructure the funding of postal pensions, including addressing a potential surplus in funding postal pensions under FERS. Continue reading →
Postmaster General Pat Donahoe’s proposal to yank postal workers (excluding himself and a few other privileged folks) out of the Federal Employee Health Benefits Program has drawn the ire of three unions that represent non- postal federal workers.
The National Treasury Employees Union, American Federation of Government Employees, and the National Active and Retired Federal Employees Association have jointly sent a letter to members of the Senate committee that oversees the USPS criticizing the Senate bill, S.1486, that would authorize Donahoe to proceed with his plan.
The unions note that the bill would
“allow the United States Postal Service (USPS) to cherry pick the largest areas of cost savings from FEHBP, which will destabilize the FEHBP and raise costs for federal employees, retirees, and their families. The Office of Personnel Management has estimated that as a result of these provisions, premium increases for employees and retirees remaining in the FEHBP would be 2 percent across the board and could be as high as 35 percent for some plans.”
Postmaster General Pat Donahoe has sent a letter to the editor of Post & Parcel defending his proposed health insurance program for postal workers and retirees. The PMG admits in the letter that most of the claimed savings come from shifting costs to Medicare.
Not surprisingly, the PMG doesn’t explain why, if DonahoeCare is so good, he and his top executives will continue using the allegedly inferior, more expensive Federal Employee Health Benefit Program.
The GAO also estimated that if the proposed health plan had been implemented in 2013, most postal employees and retirees would have had similar or lower premiums compared to the selected Federal Employees Health Benefits (FEHB) plans, with similar or higher levels of coverage for many services. Under the Postal Service sponsored health care plan, a small minority of employees electing full family coverage would pay more for health care benefits, but the overwhelming majority would pay far less immediately, and all employees would pay less over their careers. On average, premiums under the proposed Postal Service’s plan would be 16 percent lower than FEHB premiums.
United States Postal Service’s have a plan to escape the cost of their retiree pension plan, according to a new government report, but it comes at the expense of the already-embattled Medicare program.
“The primary policy decision for Congress to make with respect to USPS’s proposed health care plan is whether to increase postal retirees’ use of Medicare, which is already facing funding challenges,” the Government Accountability Office reports. “This is because USPS’s proposal would essentially decrease USPS costs but increase Medicare costs.”
The controversial plan by the U.S. Postal Service to pull its staffers from the Federal Employees Health Benefits Program (FEHBP) probably would save USPS lots of money, but the cost would bring significant uncertainties for postal workers.
That’s the finding of a report by the Government Accountability Office, which also indicated that many employees would have to pay more for care under a USPS health insurance program.
U.S. Postal Service employees may have to choose between higher costs and less coverage under a new health care plan being touted by the agency, according to a government audit.
The USPS plan to opt out of the Federal Employees Health Benefits Program would save the agency billions of dollars annually, the Government Accountability Office found in a new report, but it would likely put postal workers at risk of paying higher premiums, incurring more out-of-pocket costs and receiving less insurance coverage for a variety of procedures.