President Donald Trump’s 2018 Federal Budget proposal addresses key postal issues that in many ways mirror the Postmaster General’s policy goals … and then some.
Of special note: President Trump seeks to allow the USPS to cut delivery frequency, even though the Post dropped eliminating Saturday delivery from its plans.
The plan also pushes for a new rate structure that gives the USPS more money for investment and retiree benefits.
Excerpts from the budget:
“The Budget proposes legislation grounded in the principles of fiscal responsibility and sound financial management to restore solvency to the Postal Service. The proposal would ensure that the Postal Service funds existing commitments to current and former employees from business revenues not taxpayer funds.
“The Budget proposes operational reforms to reduce costs and improve revenue, including: 1) authority to reduce mail delivery frequency where there is a business case for doing so; 2) allowing the Postal Service to leverage its resources by increasing collaboration with State and local governments; 3) allowing the Postal Service to begin shifting to centralized and curbside delivery where appropriate; 4) enhancing Postal Service governance to ensure sound financial management; and 5) requiring the future rate structure for the Postal Service to provide enough flexibility to ensure both the stability of Postal operations and the ability of the Postal Service to meet its statutory obligations for retiree health and pension costs.
“The Budget estimates that these operational reforms will improve the Postal Service’s financial position by $47 billion over 10 years.
“The Budget also proposes Government-wide reforms to pensions and health insurance costs that are estimated to further reduce Postal Service operating costs by $33 billion over 10 years. See the Office of Personnel Management (OPM) section of the Appendix for more information. Consistent with these Government-wide changes, the Budget proposes modifying the Postal Service’s contributions for life and health insurance for employees to be consistent with the employer contribution provided for all other Federal employees. This change provides $1 billion in relief over the Budget window.
“Finally, to better reflect the true cost of the Postal workforce, the Budget proposes to require that OPM calculate any unfunded liabilities and resulting amortization payments for the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS) using factors (including investment returns, salary growth rates, and cost of living adjustments granted to Postal retirees) specific to the demographics of the Postal Service workforce. These changes will reduce Postal Service costs by $3.4 billion over the Budget window.
“In total, the Budget estimates that these reforms will reduce the unified budget deficit by $46 billion over 10 years and result in on-budget savings of $27 billion through higher payments from the Postal Service to on-budget OPM accounts.”