The Senate approved a bipartisan bill Wednesday aiming to restructure the cash-strapped U.S. Postal Service, clearing the way for a massive reduction in the agency’s workforce.

The final bill, passed by the Senate in a 62-37 vote, refunds to USPS overpayments it made to the federal retirement system. That will allow the agency to pay for buyouts for some 100,000 retirement-eligible employees. The bill also allows USPS to negotiate with its unions about moving postal employees out of the Federal Employees Health Benefits Plan and into a separate insurance program.

The bill also allows USPS to move toward ending Saturday mail delivery. However, a number of amendments to the bill create hurdles in the Postal Service’s path toward closing facilities, including post offices and mail-processing facilities.

As originally written, the 21st Century Postal Service Act requires USPS to conduct cost analyses and to gather “rigorous public comment” before closing facilities.

But over the course of two days of voting on dozens of amendments, lawmakers introduced several provisions weakening the agency’s ability to close postal facilities.

While that may allow lawmakers to avoid the wrath of constituents, as the Associated Press reported, it significantly undercuts some of the proposed cost-savings in the original bill.

Senators introduced some 39 amendments to the legislation, some of them only tangentially related to the Postal Service’s financial woes. All told, 20 of the amendments, including caps to agency conference spending and changes to the federal workers’ compensation program, were rolled into the final bill.

Cuts to federal workers’ comp

The bill contains several changes to the Federal Employees’ Compensation Act program.

• For FECA beneficiaries age 65 and older, the bill reduces compensation to 50 percent of an injured employees’ salary. For employees under age 65, the bill sets a standard compensation rate of 66.7 percent, regardless of dependents. Under current FECA provisions, employees now earn as much as 75 percent of their previous salary if they have dependents.

  Sen. Susan Collins (R-Maine), one of the architects of the postal overhaul, said thousands of employees under FECA are now too old to return to work and are essentially earning a tax-free retirement. Federal employee unions have denounced these measures.

• The bill also includes an amendment, introduced by Sen. Claire McCaskill (D-Mo.), that allows civilian federal employees injured overseas or in a terrorist attack more time to file for FECA benefits. This is similar to a FECA update passed by the House last November.

Conference spending capped

Following revelations earlier this month of excessive spending by the General Services Administration at a regional training conference, the Senate bill also includes new restrictions on agency conference spending.

• The bill includes an amendment from Sen. Tom Coburn (R-Okla.), capping agency spending on conferences to 80 percent of the amount spent in 2010 and limiting the cost of a single conference to $500,000.
• Agencies will also be required to post quarterly reports detailing agency spending and a list of conference attendees, including nonfederal employees.

Pay cuts for postal execs

Top postal service executives could soon be in for a pay cut.

• The bill includes an amendment, introduced by Sen. Jon Tester (D-Mont.), which limits the salaries of the six most senior postal execs to the same as a cabinet-level position — just shy of $200,000.

  Postmaster General Patrick Donahoe currently earns a base salary of about $245,000 not including benefits. “There’s no reason folks at the Postal Service should be making more than the defense secretary,” Tester said.

• A separate provision, introduced by Sen. Tom Carper (D-Del.), a co-sponsor of the larger bill, reduces the number of senior executives eligible for the top salary from 12 to six.

Closing facilities made more difficult

• The bill bars the closing of rural post offices for at least one year and creates more stringent criteria for doing so. In order to shutter facilities, the next closest post office must be no more than 10 miles away.
• No postal facilities could be closed before the November elections in states that offer voting by mail.
• If a facility was previously certified efficient, before it can be closed, USPS would be required to conduct a new efficiency review.
• About the only place senators agreed on closing postal facilities was in their own backyard, so to speak. The bill includes an amendment, introduced by Sen. Rand Paul (R-Ky.) that consolidates the seven congressional post offices to two — one for each chamber.

Retirement backlog

The bill also includes an amendment, introduced by Sens. Mark Warner (D-Va.) and Barbara Mikulski (D-Md.), that directs the Office of Personnel Management to take new steps to clear a longstanding backlog of retirement claims.

• The amendment includes new reporting requirements for OPM. The agency will be required to submit monthly reports to Congress and the Government Accountability Office comparing agencies’ retirement claims for timeliness and accuracy.

  “This will allow us to see which federal agencies have the best – and worst – track record in submitting the paperwork to OPM,” Warner said.

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• The amendment also requires OPM to list the total number of pending retirement claims along with how long each application has been pending.

Not a done deal

Despite passage in the Senate, the bill still faces a gloomy future in the House.

Postal legislation championed by Rep. Darell Issa (R-Calif.), the chairman of the House Oversight and Government Reform Committee, was reported out of the oversight committee in January but has not yet been scheduled for a vote.

Among other provisions, the House bill would allow USPS to more quickly move to a five-day delivery week and sets up an independent commission for closing postal facilities modeled on the process for shuttering military bases.

Sen. John McCain (R-Ariz.), introduced an amendment to the Senate bill essentially adopting the House’s approach. The Senate handily rejected that amendment in a roll-call vote Tuesday.

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