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Consequently, an amendment

may be offered to apply the sav-

ings to deficit reduction. That

distinction is wasted on those

whose earned retirement securi-

ty is compromised by the legisla-

tion. H.R. 7 is being abused as

simply another vehicle to reach

into the pockets of postal and

federal workers. Moreover,

whether, or not, the pension

cuts would be used to fund high-

way construction or applied to

the deficit, the $44 billion would

be used to offset the cost of H.R.

7.

NAPUS expects the House Rules

Committee to meet by mid-nextweek to determine which

amendments will be allowed for a

floor vote. In addition, it will be

noteworthy to see whether the

GOP leadership permits a vote

to strike Article 16 entirely from

H.R. 7, or the only amendment

permitted relating to Article 16

would be an amendment to apply

the savings to deficit reduction.

We expect the House to take up

H.R. 7 on Friday, February 17,

immediately preceding theweeklong Presidents Day Re-

cess. Fortunately, the Senate

version of the highway construc-

tion bill does not target the pub-

lic workforce.

NAPUS members should urge

their Representatives to strike

Section 16 from H.R. 7.

The latest salvo aimed at the

federal public service was fired

by freshman Rep. Dennis Ross (R

-FL), chairman of the House

Subcommittee on the Federal

Workforce, Postal Service, and

Labor Policy on Tuesday. The

House Oversight and Govern-

ment Reform Committee favora-

bly approved H.R. 3813, the so-

called SAFE Act, by a party-line

22-16 vote. The bill would dra-

matically slice earned retirement

security, and impose a regressive

1.5% income tax on the postal

and federal workforce. The cuts

total $44 billion over 10 years.

Specifically, H.R. 3813 would:

Increase FERS and CSRS

contributions by 1.5% over

the next 3 years for all em-

ployees

Change the FERS computa-

tion formula from the high-3

to the high-5 for employees

with less than 5 years of

federal/postal service

Reduce the accrual rate

under FERS by 36% for em-

ployees with less than 5

years of federal/postal ser-

vice

Eliminate the Social Security

Supplement for FERS em-

ployees who retiree prior

to being eligible for Social

Security and who retire

after 2012

Public employee pay freezes,

retirement cuts and health bene-

fit attacks are par for the course

in the current Congress. NAPUS

members are among those who

are vulnerable to these mean-

spirited and unjustified attacks.

The irony to this shameful legisla-

tive charade is that immediatelyafter the Oversight and Govern-

ment Reform Committee ap-

proved the bill, the House Rules

Committee pocketed the text of

H.R. 3813 and inserted it in a

highway construction and trans-

portation funding bill (Article 16

of H.R. 7). It seems as though

the fix-was-in. It is interesting

to note that the Chairman of the

Transportation Committee, John

Mica (R-FL), is a Sunshine State

colleague of Rep. Ross andchaired the Federal Workforce

Subcommittee in the mid-1990s.

It appears, however, that the too

-cute-for-comfort legislative ploy

was transparent enough that

some GOP members want to

decouple the cost-cutting at-

tributed to pension reductions

from transportation funding.

Open Season on the Federal Public Service?

eNAPUS Legislative and Political

Bulletin F E B R U A R Y 1 0 , 2 0 1 2V O L U M E 9 , I S S U E 2N A T I O N A LA S S O C I A T I O NO F

P O S T M A S T E R S

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U N I T E D S T A T E S

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NAPUS strongly believes that the

CBO estimate is disingenuous, since

none of the identified funds are tax-

payers, and it results from refunding

the USPS FERS surplus and re-

amortizing the pre-funding of future

retiree FEHBP liabilities. Moreover,

the Office of Personnel Management

has calculated that the USPS has

overfunded FERS and CSRS by $13.1

billion. (The OPM determination is

independent of the projected $55-75

billion USPS overpayment into the

CSRS.)

Finally, the USPS circulated in theSenate a memorandum, which raises

questions about its commitment to

pursing passable postal relief legisla-

tion this year. USPS-promoted provi-

sions were excluded from the Gov-

ernmental Affairs-approved bill or

USPS-resisted items were adopted

by the Committee, or USPS-opposed

amendments may prevail on the Sen-

ate floor. These factors have derailed

USPS 2012 legislative strategy.

However, the facts are uncontested.

Over the past couple of weeks, con-

sideration of S. 1789, the 21st Centu-

ry Postal Act , has slipped behind

other Senate legislative priorities. On

the immediate horizon, a 10-month

extension of the Social Security pay-

roll tax holiday will supplant S. 1789

in the legislative pecking order.

Complicating prompt consideration

of the Lieberman-Collins-Carper-

Brown bill are concerns being raised

within the Senate Democratic Caucus

over a limited number of controver-

sial provisions in the bill (e.g., changes

to collective-bargaining and the feder-al workers compensation program).

In addition, there is pressure to add

provisions to the bill to strengthen

Postal Regulatory Commission in-

volvement in facility closure and con-

solidation decision-making, and to

deny the USPS the opportunity to

reduce delivery service standards.

In addition, the Congressional Budget

Office estimates that the bill would

cost about $6.3 billion, and caused

pause on the GOP side of the aisle.

The USPS will be unable to make

$11.1 of pre-funding payments in inthe current fiscal yearabout on

August 1 and remainder on Septem-

ber 30. The USPS needs relief from

these unjustified payments. In addi-

tion, it needs more legislative latitude

and incentives to grow its revenue; ti

cannot simply be permitted to con-

tract its market reach and sputter

towards a kamikaze mission of retail

inaccessibility and service cuts.

A potential Senate floor vote on

which NAPUS will be focusing will be

a motion to waive a point of order

against the bill for violating a Senate

budget rule. We expect that an anti-

postal Senator will raise such a point-

of-order against the bill. NAPUS will

push for a waiver, because congres-

sional budget rules are inherently

unfair to the USPS and prejudicial to

implementing postal relief.

In the meantime, NAPUS will contin-

ue to work with Senate allies to fine-

tune S. 1789, so that the measure will

garner the requisite votes for passage.

Senate Postal Bill Stalled for Now

Retiree Costs Fully Funded in 21 yearsThe USPS Inspector General (IG) has

concluded that the Postal Services

future retiree FEHBP liability could be

fully funded within 21 years; that is,

without any further postal pre-funding

contribution.

The IG noted that the Postal Retiree

Health Fund balance presently stands

at $44 billion. Assuming the historical

interest rate on special issue govern-

ment securities of about 4%, the $44

billion would balloon to about $90

billion in 21 years, without additional

USPS prefunding payments.

In a letter to Sen. Bernie Sanders (I-

VT), the IG cautioned that this strat-

egy would only provide short-term

relief, and only from the onerous

annual $5.5 billion FEHBP payment.

The IG went on to state that, unlikeother public or private entities, the

USPS has put together a war chest

of over $326 billion to address future

pension and retiree health obliga-

tions. The USPS has already over-

100% funded its pension obligations.

In fact, when future pension and

health obligations are combined, 91%

of all future obligations are funded. In

contrast, the federal government is

funded at 42% and military is funded

at 27%.

Moreover, the IG echoed the Gospeltruth that there are no public or

private entities that are required to

pre-fund healthcare at the USPS

level. The federal government does

not pre-fund at all; only 38% of For-

tune 1000 companies prefund. The

median prefunding level for pre-

funding private firms is 37%.