The Case Against S. 1789

The positive elements of S. 1789

NALC supports the creation of a strategic advisory commission (See Section 212) tasked with developing a viable business model and promoting innovation. However, the 18-month timeline should be accelerated and stakeholders should be represented on the commission. In any case, Congress should avoid making damaging or irrevocable policy decisions regarding the Postal Service until a new business model is developed and debated.

NALC also welcomes the new flexibility to develop new services provided by Section 210 and the new authority to ship beer, wine and spirits through the mail in Section 405—both suggest Congress should re-imagine the potential uses of the Postal Service’s traditional networks before recklessly dismantling them.

S. 1789 rightfully establishes the principle that the Postal Service should be entitled to surplus pension funds to cover the cost of other obligations, including post-retirement health benefits.  Indeed, under private-sector pension and tax law, companies with pension surpluses are encouraged to use the funds to cover such costs. S. 1789 applies this principle to the FERS surplus. The same principle should be applied to a properly calculated postal surplus in the CSRS pension plan, as called for by the PRC/Segal audit of 2010.

S. 1789 rightfully gives the Postal Service access to its own funds in the Postal Service Retiree Health Benefits Fund (PSRHBF). Under the 2006 postal reform law, the USPS could not use the Fund for its intended purpose—to pay for retiree health premiums—until 2017. This onerous restriction, imposed for budget scoring purposes, would be lifted by the Senate bill, freeing the USPS to cover the $2 billion to $3 billion annual cost of retiree premiums out of the $44 billion PSRHBF.   

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What can senators do to repair the bill