Government affairs

Today, President Obama released his $4.1 trillion Fiscal Year 2017 budget request, including both mandatory and discretionary funding for the government from Oct. 1, 2016, through Sep. 30, 2017.

While the request adheres to the spending caps agreed upon under the Budget Control Act, the Obama Administration proposes repealing discretionary caps that were put in place by the sequester and calls for cuts to mandatory spending beginning in 2018.

U.S. Postal Service

With regard to the U.S. Postal Service, the administration’s budget request once again calls for preservation of six-day mail delivery for FY 2017, prevention of closures and consolidations of any small or rural post office, and continuation of providing free mail for overseas voting and mail for the blind.

Unfortunately, the administration’s budget once again calls for granting the Postal Service the “authority to reduce mail delivery frequency from six days to five days if mail volume falls below 140 billion pieces for four consecutive quarters,” which is identical to language included in last year’s request. The president also continues to embrace allowing USPS to begin shifting to centralized and curbside delivery.

“It is extremely disappointing,” NALC President Fredric Rolando said, “that despite the Postal Service’s continued operational profitability—including last quarter’s $1.3 billion figure announced this week—and despite public demand for six-day mail delivery and continued delivery to the door, the administration continues to embrace outdated and misguided proposals designed specifically to cripple this treasured institution.”

NALC is pleased to see President Obama recognize the urgent need to address postal rates. The exigent rate increase that was put in place in 2013 is set to expire in April; however, the administration has proposed making the exigent increase permanent to keep rates consistent this year. Obama’s request also seeks to allow USPS to enhance its governance management and its board of governors, to leverage its resources by collaborating with local and state governments, and to require the postmaster general to provide a proposal to the Postal Regulatory Commission (PRC) for a new rate structure that would “provide stability, pricing flexibility and support for universal service.”

With regard to the calculation of postal liabilities, President Obama calls on the Office of Personnel Management (OPM) to calculate any unfunded postal liabilities and amortization payments for the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS) using postal-specific demographics, and the president proposes extending the amortization schedule of any unfunded liability to 40 years—something that mirrors the schedule for the Postal Retiree Health Benefits Fund (PRHBF), a move that is estimated to save the Postal Service $5.7 billion through 2026.

With regard to pre-funding, the administration’s budget once again fails to reflect a consensus approach to addressing the issue through smarter investment of the PRHBF and instead reduces a portion of the unfunded liability, over the course of 40 years, to 80 percent of the total liability—a move President Obama claims will provide $18.6 billion in relief to the Postal Service.

Workers’ compensation

In a major victory for federal-postal employees, the Obama Administration, in a departure from previous budget proposals, omitted in its FY2017 budget request cuts to Federal Employees Compensation Act (FECA) benefits.  

The NALC, along with the Federal-Postal Coalition, has lobbied extensively on this issue, sending a letter to the Office of Management and Budget that urged the administration to omit any proposal calling for a reduction in workers’ compensation benefits.

Federal employee issues

President Obama’s budget request includes a proposed 1.6 percent pay raise for federal employees, marking the third year in a row that a budget request has included such a modest raise. According to the Bureau of Labor Statistics’ Employment Cost Index, private-sector pay has increased by 2.1 percent, demonstrating that the private-sector versus public-sector pay gap continues to widen to approximately 35 percent. The president’s budget also calls for six weeks of paid parental leave for employees following the birth or adoption of a child. 

Cybersecurity

Following the 2015 data breach that compromised thousands of federal employees’ personal information, the Obama Administration has included a request for funding that would allow OPM to make improvements to the government’s technology infrastructure and to provide an increase in funding to help OPM respond to inquiries from federal employees and retirees.

Next steps

Historically, it has been customary in the budget process for budget committee chairmen in the House and Senate to invite the administration to address each committee regarding the administration’s budget request. However, House Budget Committee Chairman Tom Price (R-GA) and Senate Budget Committee Chairman Mike Enzi (R-WY) both have signaled that they do not intend to extend this invitation to the Obama Administration. Instead, both plan to work on a budget resolution (a so-called “blueprint”) for each of their respective subcommittees to follow as they work over the coming months on 12 appropriations bills.

NALC continues to review the president’s budget and will post updates as needed.