White House adamantly opposed to Senate postal bill

Senate supporters of postal overhaul legislation contend they have changed their bill to accommodate White House concerns, but administration officials say they are not budging from their opposition because several benefit provisions are still too expensive.

Senate Homeland Security and Governmental Affairs Chairwoman Susan Collins, R-Maine, and Sen. Thomas Carper, D-Del., are sponsors of the Senate version and have been aiming to pass a bill to fend off a looming rate hike.

But at a hearing Thursday, the administration continued to oppose a Postal Service proposal to transfer to the Treasury Department the costs of retirement benefits related to military service. The administration also wants money slated for the agency's escrow account for pension overpayments to be spent only to pay for retiree health benefits, testified Timothy Bitsberger, assistant Treasury secretary for financial markets.

Collins reminded him that she and Carper have revised the bill since it was approved unanimously by the committee last year to incorporate several White House's suggestions on financial transparency and rate setting. "The administration needs to come up with potential compromises on the issues on which we disagree," she said.

Dan Blair, acting director of the Office of Personnel Management, said in an interview after the hearing that the White House "remains adamant" on its positions on the two sticking points.

During his testimony, Bitsberger said the Postal Service has obscured "the real reason" for the proposed rate hike. "The reality is that any additional financial requirements of the Postal Service can be directly attributed to its inability to sufficiently reduce its costs," Bitsberger said. He noted USPS covers a higher percentage of its employees' health benefits than most government agencies.

Blair said a law passed in 2003 changing the funding formula for employee pensions freed $78 billion in future liabilities, so the agency easily can afford to cover the cost of its military retiree benefits, about $27 billion. But Collins disputed that accounting.

During the hearing, Sen. Ted Stevens, R-Alaska, who championed the 2003 law, said it was never intended to shift payment for military pensions back to the Postal Service. Stevens, who recently signed on as a co-sponsor of the postal bill, said he might, "ask to meet with the president" personally to discuss the issue, since the administration's proposal might be a significant disincentive for the postal service to hire veterans.