Verdict is In - Union Claims to "Overpayment" False - Represent Nothing But a Demand for a Taxpayer Bailout
GAO Responds to Bipartisan Request for Facts on Alleged Postal Service “Overpayment” and Clearly Demonstrates that Unions Claims to “Overpayment” are False
Oct 13, 2011 -
Lakeland, FL – Congressman Dennis A. Ross, Chairman of the Oversight Subcommittee on the Postal Service, released the following statement after the GAO reports on Postal Service “Overpayment” was released this morning.
“Today, GAO put empirical and numerical teeth into the argument the Chairman and I have been making for months. Namely, that there is no overpayment, that the Postal Service is being correctly and fairly assessed for the cost of its own collective bargaining agreements and that any legislation purporting to ‘return’ money to USPS is nothing but a taxpayer bailout by another name. The only legislation that recognizes this fact and addresses the true, systemic problems with the USPS is HR 2309, the Postal Reform Act myself and Chairman Issa introduced.”
Chairman Ross continued, “The request that led to this report came from both Democrat and Republican Members, and I would expect all parties to accept the findings of GAO and move on to the real reforms needed to fix this problem without debt or bailouts. Labor reductions through attrition and retirement, overcapacity reductions, route and fleet reforms, and ending the subsidization of mail products at the expense of USPS profitability, to name a few. I look forward to working with my colleagues on the other side of the aisle, especially Mr. Lynch and Mr. Cummings, to address these needed reforms. They are well aware of the problems and knowledgeable on the issue and I am confident we can come to an agreement that will save the USPS and ensure no taxpayer dollars are used to bailout public sector unions.”
Some highlights of the GAO report include:
1. “While the USPS OIG and PRC reports make judgments about fairness, the 1974 law also implicitly reflected fairness. Congress considered that USPS was to be self-sustaining and that the federal government, which had no control over USPS pay increases, should not be liable for pension benefits attributable to those increases.”
2. “The current methodology used by OPM for allocating responsibility for CSRS benefits between USPS and the federal government is consistent with applicable law.”
3. “Some have referred to ‘overpayments’ that USPS has made to the CSRS fund, which can imply an error of some type – e.g. mathematical, actuarial, or accounting. We have not found evidence of error of these types.”
4. “The key impacts of transferring any assets out of the CSRS fund to USPS based on the current proposals would be to increase the federal government’s current and future unfunded pension liability by an estimated $55 billion to $85 billion. This liability would then be funded by the federal government using tax revenue and/or borrowing.” (Bailout)
5. “Any change in the USPS’s share of responsibility for CSRS benefits would provide some temporary relief from the pressures USPS faces due to declining volume, revenue, and inflexible costs, but would not by itself address USPS’s long term financial outlook.”
6. “The USPS OIG and PRC reports assess fairness in isolation, looking only at the allocation o pension costs. In the formation of a new business entity, the fairness of a particular allocation of pension obligations depends also on the total package of assets and obligations – both pensions and non-pension – being allocated to the new entity.”
7. “One additional consideration in assessing the fairness of the current allocation of pension responsibility is whether USPS has already been compensated for these costs. The cost of USPS’s CSRS pension obligation has already been reflected in postal rates for most of the past four decades, so that USPS has already received payment for these costs by postal rate payers. Thus, any transfer of USPS pension obligations to the federal government would mean that USPS would receive payment for these costs twice, once by ratepayers and once by taxpayers.”
Dennis Ross, son of Bill and Loyola Ross, was born in 1959 and raised in Lakeland, Florida. He graduated from Auburn University and the Cumberland School of Law at Samford University. He has served as in-house counsel to the Walt Disney Company and as an associate of the law firm of Holland & Knight. He previously served in the Florida Legislature from 2000 until being term limited in 2008. Dennis and his wife, Cindy Hartley, were married in 1983 and have two sons, Shane and Travis.
In the 112th Congress, Dennis will serve on the Committee on Oversight & Government Reform (Chairman of the Federal Workforce, Postal Service & Labor Policy Subcommittee) as well as the Education & the Workforce and Judiciary Committees.