On Tuesday, the House of Representatives approved H.R. 22. This bill, first introduced eight months ago, couldn’t have been delayed much further.
The USPS fiscal year closes on September 30, and on that day, under current law, they need to make a $5.4 billion payment into their retiree trust fund. The problem is that the agency does not have the cash on hand to make the payment and has already reached its maximum borrowing limit of $3 billion for 2009.
The Background
Under the Postal Accountability and Enhancement Act, the USPS must spend more than $5 billion per year from 2006 through 2016 to pre-fund retiree healthcare benefits. No other federal agency is subject to this requirement
HR 22 reduces the amount, setting this year’s required transfer of funds at $1.4 billion – a reduction of $4 billion. Approved in a bipartisan vote of 388 to 32, this bill does not involve any appropriations for the postal service, it simply acknowledges that the retiree benefits account is sufficiently funded today (the account currently has a balance of $32 billion).
What’s Next
A similar bill needs to pass in the Senate before it becomes law, and time is running out. The Senate bill on the floor, S-1507, has reportedly been less popular with some as it also includes provisions on how postal contracts should be handled in the future. The House and Senate need to resolve the differences between their respective bills and agree to final bill being passed.
We will keep you up to date on this important matter.
UPDATE 9/30/09. Today the Senate approved a continuing resolution to keep the government operating. The resolution includes language contained in HR 22, offering the USPS relief from its retiree prefunding obligations for the current fiscal year only.
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