February 4, 2015

But will Anyone Take Him up on it?

Like last year’s budget proposal, the new version is more specific than usual about improvement it foresees for the U.S. Postal Service (USPS). The budget says that the White House will work with Congress and postal stakeholders to secure necessary reforms:

•  Return the Federal Employee Retirement System (FERS) surplus of $1.5 billion to USPS.
•  Restructure USPS payments into the Retiree Health Benefits Fund (RHBF) and defer 2015 and 2016 payments for a total savings of $13 billion through 2016.
•  Allow USPS to reduce mail delivery to five days if mail volume falls below an annual rate of 140 billion pieces for four consecutive quarters.
•  Allow USPS to begin shifting to curbside delivery where appropriate.
•  Enhance USPS governance to allow USPS management and its Board of Governors to more quickly and effectively respond to market opportunities and challenges while retaining strong oversight from the Postal Regulatory Commission (PRC) and Congress.
•  Permanently extend the PRC’s December 2013 “exigent” postal rate increase beyond two years.

Last year’s language regarding five day delivery of mail read: “Reduce USPS operating costs by giving USPS authority to reduce mail delivery frequency from six days to five days, starting upon enactment.” The language regarding enhanced USPS governance to allow management and the BOG to respond more quickly to market opportunities was not in last year’s proposed budget. Much of the language including the new parts was drawn from the Senate bill as passed out of Committee last year.

We will be watching the main players closely to see whether and how legislation will emerge in 2015. We wonder whether new Postmaster General Megan Brennan will continue to push for comprehensive legislation as hard as her predecessor Patrick Donahoe did. And we will watch to see whether she continues the “my way or the highway” and “all or nothing” approach of Donahoe. We also will be watching to see whether Rep. Jason Chaffetz and Sen. Ron Johnson decide to champion postal legislation in the House and Senate Oversight Committees that they chair, as their predecessors did. We do not think they will embrace the USPS version of legislation as much as Sens. Carper and Coburn did, but stranger things have happened.

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