Postal Update: PMG Questions Some Commission Proposals

(Direct Newsline) Postmaster General Jack Potter called for modifying some of the recommendations of the President’s Commission on the U.S. Postal Service in testimony before the Senate Governmental Affairs Committee Wednesday.

He also called for further changes in the USPS’s obligations to the Civil Service Retirement System, which earlier this year helped save the Postal Service billons of dollars and staved off rate increases until 2006.

Specifically, he called or the elimination of escrow accounts into which the USPS must deposit some of the money saved from lessened pension obligations to its retired employees. “With the escrow requirement, postage rates will have to rise even more than is required to reflect inflation — some have suggested double digits,” Potter said in his testimony. “This is because new rates will have to generate the revenue to cover what is being called ‘savings,’ the difference between the old and new CSRS funding schedule.”

Last April, Congress passed legislation that got the Postal Service out of paying retirement obligations of many former employees into the Civil Service Retirement System fund, saving it at least $2.9 billion this fiscal year and $2.6 billion in fiscal 2004.

While generally expressing strong support of the recommendations of the commission, Potter had some reservations about the idea of replacing the current Board of Governors (BOG) with a board of directors. He noted that the current BOG is made up of no more than five members from each political party, allowing “the Postal Service to enjoy bipartisan oversight for the last three decades.”

The proposed board of directors allows in part for the appointment of independent board members with no limits on political affiliations who would not need Senate confirmation. “This could result in a highly partisan board,” said Potter, adding that this set-up could affect the current collective bargaining process with labor unions.

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