On October 13, the House Oversight and Government Reform Committee voted 22-18, to advance a bill to overhaul the United States Postal Service (USPS), HR 2309. The measure would establish an oversight board to pursue millions of dollars in cost reductions and create a new advisory body to make financial recommendations should the agency default for more than 30 days. Additionally, if the Postal Service, after two years, still has a budget deficit of more than $2 billion, power over the agency would be transferred to the advisory panel. Also last week, the Government Accountability Office issued a report which concluded that the Postal Service has not, as it claims, overpaid into government employee retirement funds since the 1970s, resulting in tens of billions of dollars in over payments.

In the Senate, there are currently two proposals, one (S. 353) sponsored by Susan Collins (R-ME) and another (S. 1010) introduced by Thomas Carper (D-DE). The major differences in the bills center on the elimination of Saturday delivery, the closure of thousands of post offices, renegotiation of collective bargaining agreements and whether the Postal Service should be allowed to recoup billions of dollars it believes it “overpaid” into federal retirement accounts over the past several decades. John Berry, Director of the federal Office of Personnel Management, also said the administration would soon put forward a plan to stabilize the postal service for the long term.

The USPS currently faces a deficit of nearly $10 billion this fiscal year and could run out of cash entirely this winter. The Postmaster General Patrick Donahoe has warned that if a comprehensive overhaul is not passed, by next summer, the agency will run out of money. As such, he has proposed eliminating Saturday delivery, closing up to 3,700 postal locations and laying off 120,000 workers, despite union contracts with strict limits on layoffs.

Links: H.R.2309, GAO Report, S.353, S.1010