In a somewhat peculiar move, the Saturday service cut is included in a bill to reverse a reduction in cost of living adjustments for some retired military veterans that was part of the bipartisan Paul Ryan/Patty Murray budget deal.
Why the link? Issa claims that over the next 10 years the delivery cuts would save $17 billion- more than triple the budget savings provided by the military COLA reduction.
There’s just one little problem with Issa’s scheme, of course: since the USPS is funded by its own revenue, and is “off-budget”, reductions in USPS expenses have no direct impact on the federal budget.
So how does eliminating Saturday delivery reduce the federal budget deficit? Presumably Issa expects the USPS to use the savings to start catching up on the $16.5 billion in “trust fund” payments the USPS has defaulted on over the years. And you don’t need to be a math whiz to see that resuming the trust fund payments would consume all of the savings, doing nothing to keep rates down or improve the USPS’s actual financial position.
Under the strange and exotic math employed by our Congress, any money the USPS pays in to the funds gets counted as revenue. In the real world, of course, that would be considered nonsense. The trust fund is solely intended to be used to fund USPS retiree health benefits- money added to it isn’t available for other purposes, like increasing military pensions.
So the reality is that Issa’s bill wouldn’t save any money at all. The USPS would still use its off-budget revenue to fund its off-budget retiree health benefits. The 5 day delivery savings would simply allow the USPS to go back to making those payments decades in advance, allowing Issa to pretend that he has saved money and helped veterans when all he’s done is blow more smoke.
Here’s the Issa press release:
WASHINGTON – House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) announced the introduction of legislation to allow the U.S. Postal Service to implement a modified six-day delivery schedule and repeal reductions in military pensions made by the Bipartisan Budget Act of 2013. The military pension cuts were made to achieve $6.2 billion in savings over 10 years.
“This legislation will restore Cost-of-Living Adjustments for our military retirees and not only replace the savings but nearly triple them- saving $17 billion over 10 years according to conservative USPS estimates,” said Chairman Issa. “This common sense reform will help restore the cash-strapped Postal Service to long-term solvency and is supported by the President and key Congressional leaders in both chambers.”
USPS is forced to deliver paper mail, like bills and advertisements, six days a week by an unfunded mandate included in annual appropriations legislation. If the mandate is lifted, the Postmaster General has announced that USPS would modify its current delivery schedule to deliver packages 6 days a week and paper mail 5 days a week. Express and priority mail delivery would not change, and post offices would remain open on Saturdays.
Chairman Issa recently outlined the benefits of ending the unfunded mandate in a letter to House Appropriations Committee Chairman Hal Rogers (R-Ky.)
Full text of H.R. 3801, can be viewed here.