Senate Approves Short-Term Relief for USPS

[Updated Oct. 1, 2009]

The Senate approved an appropriations bill Sept. 30 that includes emergency financial relief for the Postal Service. The Fiscal Year 2010 funding measure (H.R. 2918) passed by a vote of 62-38. President Obama signed the legislation that evening.

The postal provision gives the USPS one year of financial relief, allowing it to make a reduced payment to the Postal Service Retiree Health Benefits Fund for future-retiree health benefits. Instead of making a scheduled $5.4 billion payment before the end of the fiscal year on Sept. 30, the Postal Service had to pay only $1.4 billion.

Before the vote, the Senate rejected two points of order raised by Senators John McCain (R-AZ) and Judd Gregg (R-NH) that were designed to derail the bill. Sixty votes were needed to overcome the procedural challenges. In addition to Senators McCain and Gregg, Sens. Jeff Sessions (R-AL), Jim DeMint (R-SC), and Tom Coburn (R-OK), spoke in opposition to the legislation.

The PAEA

The Postal Accountability and Enhancement Act of 2006 (PAEA) established the retiree fund and required the Postal Service to make annual payments to cover health insurance premiums for USPS employees who will retire in the future.

The PAEA specifies the size of the payments for the first 10 years — through FY 2016, the range is $5.4 billion to $5.8 billion. After 2016, the Office of Personnel Management is directed to recalculate the amount of the remaining liability, and to establish a payment schedule to amortize the remaining liability.

The House voted in favor of the combined spending legislation (House Continuing Resolution 191) on Sept. 25 by a vote of 217 to 190.

Although the funding measure provides less relief than earlier bills, its enactment will help the USPS in the short-term to survive the most devastating economic downturn since the Great Depression.

The passage of funding legislation does not preclude further consideration of S. 1507, a bill introduced by Sen. Tom Carper (D) of Delaware. An amendment offered by Sen. Coburn and approved by the Senate Homeland Security and Governmental Affairs committee provides “that an arbitration board shall consider the financial condition of the Postal Service in certain labor disputes,” promoting that issue to the forefront of issues to be considered by interest arbitrators.

Sen. John McCain of Arizona also introduced amendments to S. 1507, which are likely to be considered when the bill is considered on the Senate floor.

APWU members are once again urged to contact their two U.S. Senators to oppose S. 1507 as currently structured.