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Bush Budget Proposal Addresses Postal Reform

APWU Web News Article #09-06, Feb. 10, 2006

President Bush’s budget, sent to Congress on Feb. 6, reiterated the White House position on postal “reform,” as well as other issues important to federal employees and working families. The Senate approved a postal reform bill Feb. 9; the House of Representatives approved a similar bill on July 26, 2005.

The $2.77 trillion budget proposal for fiscal year 2007 says the administration “supports enactment of comprehensive postal reform legislation that is fair to taxpayers, ratepayers, and Postal Service employees,” and “does not have an adverse impact on the federal budget.” [emphasis added]

The administration’s opposition to legislation that would have an impact on the budget is significant because key provisions in both the House and Senate bills would appear to increase the deficit. One provision would release from escrow approximately $3 billion the USPS saved by ending overpayments to the Civil Service Retirement System. The other provision opposed by the White House would return military retirement-benefit obligations to the U.S. Treasury. No other federal agency is required to pay these costs.

The two proposals the administration opposes are among the few that were embraced by all the major stakeholders in the postal reform debate. They are supported by labor unions, large business mailers, and the Postal Service.

The White House budget proposal also said postal legislation should be consistent with five principles: implementation of best practices; transparency, flexibility, accountability and self-financing. The administration outlined similar criteria last summer.

As postal reform legislation winds its way through the legislative process, we will continue to speak out on behalf of APWU members.

Workers’ Comp Cuts

The White House budget proposal also confirms that the administration will again propose legislation that would reduce Workers’ Compensation benefits for retirement-age beneficiaries and impose an up-front waiting period for benefits for federal and postal employees. The administration made similar recommendations in its 2005 and 2006 budget proposals.

The White House proposal is similar to language contained in the Senate’s postal reform bill (S. 662), which would shift a significant portion of the cost of on-the-job injuries from the USPS to postal workers. (The House version of the bill, H.R. 22, does not contain this provision.)

If the language in the Senate version of the bill is enacted, Workers’ Compensation benefits for postal workers would be eliminated when injured employees reach retirement age, as defined by the Social Security Act. As a result, affected workers essentially will be forced to retire at a lower annuity rate.

Under current Federal Employee Compensation Act (FECA) rules, there is no waiting period before benefits begin. Unlike most state-run plans, FECA allows employees who suffer job-related injuries to continue to receive their regular pay for 45 days after an injury, with a three-day waiting period at the end of the continuation-of-pay period.

Both the president’s budget proposal and S. 662 would move the waiting period from the end of the continuation-of-pay period, to the beginning. The move would require employees to use annual leave, sick leave, or leave-without-pay for the first three days of on-the-job injuries. The postal reform bill would permit employees to be reimbursed for leave taken if the absence from work is “no less than 15 days.”

The APWU will continue our efforts to strip this mean-spirited measure from the postal reform legislation, and we will oppose it during the budget process, which is expected to last for several months.

Other Items

The budget proposal also announces the administration’s intent to “identify options for increasing price competition among health plans offered to Federal [and postal] employees and retirees,” but provides little detail about how it would accomplish this goal.

The administration proposes to implement Retirement Systems Modernization (RSM), which it says is designed to improve claims processing times and increase the speed and accuracy of retiree benefit payments.

For a detailed analysis of the budget proposal’s effect on issues of importance to workers and others, visit the AFL-CIO’s Web site, at www.afl-cio.org/issues/ns02072006.cfm.

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