PRC Finds Current Rate System Fails to Meet Objectives
and Proposes Alternative
Posted by Bob Levi on 12/02/17
On December 1, the Postal Regulatory Commission (PRC) concluded that the postage rate-setting system created in the 2006 Postal Accountability and Enhancement Act has failed to maintain the financial health of the USPS as intended in the law, has weakened the high quality service standards and has not increased pricing efficiency. In sum, the decade-old statutory postage rate regime has not met many of the the criteria outlined in the 2006 postal legislation.
As a result, on December 1, the PRC proposed three changes in the way postage rates will be adjusted, in the future, to improve the USPS finances and operations. First, the PRC would grant the USPS 2 percent of rate authority per class of mail above the consumer price index (CPI) for each of the next 5 years. Additionally, the USPS would be provided up to 1 percent of rate authority per class of mail per year, contingent on the USPS meeting or exceeding specified efficiency and service standards. Second, the PRC would require a minimum rate increase of 2 percent for postal products that do not cover their attributable costs. And, third, the PRC would establish two rate adjustmen bands for work-share discounts "pass-throughs."
President Trump Nominates Three
to USPS Board of Governors
Posted by Bob Levi on 10/30/17
On October 26, President Donald Trump made three nominations to the U.S. Postal Service Board of Governors. Currently, the only two board members are Postmaster General Megan Brennan and Deputy Postmaster General Ron Stroman.
The Trump nominees include former Postal Service Inspector General David Williams, former Republican National Committee Chairman Robert Duncan, and Pennsylvania businessman Calvin Tucker. David Williams has extensive postal experience in evaluating and making recommendations regarding postal operations and finances. Robert Duncan is a former Kentucky banker, and served as chairman of the Tennessee Valley Authority (a position held by former PMG Marvin Runyan) and chairman of American Crossroads PAC, a major GOP super-PAC. Calvin Tucker has been the CEO and held a number of executive positions in the financial industry, and co-hosted a Philadelphia-based talk-show.
The nominees will be referred to the Senate Homeland Security and Governmental Affairs Committee. At the time of referral the committee will, in all likelihood, schedule prompt hearings, with committee full Senate consideration later this year.
House Passes Senate Version of Budget Resolution:
No UPMA Benefit Hits
Posted by Bob Levi on 10/26/17
On Thursday morning, October 26, the House of Representatives narrowly approved the Senate's version of the fiscal year 2018 budget, House Concurrent Resolution 71, as amended by the Senate. The 216-212 vote permits many UPMA members to breathe a sigh of relief for the next few months, since the Senate budget excluded the cuts that were included in the original House-passed budget. However, beginning in January, Congress will renew its assault against federal and postal health and retirement benefits.The reason for the prospective threat is that H.Con.Res 71 adds $1.5 trillion to the federal budget deficit to finance the tax cuts included in the tax reform bill currently under consideration by the House Ways and Means Committee.
According to Roll Call, a Capitol Hill newspaper, "half a dozen Budget Committee members, as well as a few other fiscal hawks in the GOP conference [who were interviewed] anticipate mandatory spending cuts being a priority for the fiscal year 2019 budget reconciliation process." UPMA legislative activists know that Federal and postal health and retirement benefits are "mandatory spending" programs.
Senate Approves Budget Resolution Without Benefit Hits Against UPMA Members
Posted by Bob Levi on 10/19/17
On Thursday evening, October 19, the Senate narrowly passed (51-49) its version of a budget resolution that did not include "reconciliation instructions" targeting postal and federal retirement and health benefits. The Senate GOP leadership elected to take up the House passed budget resolution, House Concurrent Resolution 71, and substitute the Senate's Budget Committee's text for the House bill. The Senate's intent was focused on creating a legislative vehicle to enact tax reform, rather than burden the effort with contentious budget cutting proposals that, in part, would have impacted many federal programs, including federal and postal health and retirement benefits.
During consideration of the budget resolution, Senator Rand Paul (R-KY) offered a series of amendments that would have, in part,directed the Senate Homeland Security and Governmental Affairs Committee to make cuts to programs under its jurisdiction. These programs include federal health and retirement benefits. Each one the Paul Amendments were defeated.
UPMA thanks its legislative activists for contacting their senators to oppose cuts to health and retirement programs within the context of the budget resolution. Now, the House and Senate will need to resolve the differences between the House and Senate-passed budget resolutions.It has been reported that the Senate version of the budget may be acceptable to the House GOP Leadership. If this is accurate, then a Conference Committee could be averted and the House will simply take up and pass the Senate-passed bill. Nevertheless, UPMA members should still communicate to their Senators and members of the House of Representatives to accept the Senate position with respect to reconciliation instructions.
HOUSE PASSES BUDGET RESOLUTION CALLING FOR
$32 BILLION IN BENEFIT CUTS:
Posted by Bob Levi on 10/10/17
On Thursday, October 5, the House of Representatives passed a budget resolution that instructs the House Oversight and Government Reform Committee to cut $32 billion from programs under its jurisdiction. (These proposed cuts are known as reconciliation instructions.) Although the bill, H.Con.Res. 71, does not identify the programs to be cut, the only programs that yield such savings include the Civil Service Retirement System (CSRS), the Federal Employees Retirement System (FERS), the Thrift Savings Plan (TSP), and the Federal Employees Health Benefits Program (FEHBP). Cutting strategies could include imposing retiree COLA cuts, raising the employee FERS contributions, changing the formula for calculating CSRS and FERS benefits, reducing the earnings of the TSP G-Fund, increasing retiree FEHBP premium contributions, and eliminating the FERS supplement for pre-65 annuitants. H.Con.Res. 71 narrowly passed the House with a 219-206 majority. 18 Republicans voted NO and no Democrats voted YES. A record of the actual votes can be linked through the House Clerk's Website.
The Senate is presently considering its own budget resolution, which, as of yet, does not have a bill number, nor does it currently include instructions to cut federal and postal employee and retiree benefits. The Senate is likely to vote on its own budget during the week of October 16. It is important for UPMA members to call their U.S. Senators to oppose adding any reconciliation instructions to cut federal and postal employee health and retirement benefits.
Although H.Con.Res. 71 would not have the force of law, it sets the stage for an Omnibus Budget Reconciliation Act that would have the force of law and could radically modify UPMA member health retirement programs, resulting in benefit cuts. Cuts could be included in a reconciliation act if the House and Senate agree to such cuts. Such an agreement would be part of a negotiated agreement of a House-Senate Conference Committee. In the past, UPMA members could find comfort in a split Congress (i.e., House and Senate with different partisan majorities) for a semblance of security, or, as a last resort, a presidential veto. Obviously, this year is quite different. So, UPMA members should be prepared for battle
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