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May 14, 2021
Recent NAPS experience has demonstrated that nothing short of legislation will yield a fair and equitable process to “consult” over pay and benefits for the 47,000 Executive and Administrative Schedule (EAS)-level postal employees. Currently, the determination of pay and benefits for EAS-level employees is subject to excessive delay, undue secrecy and the lack of accountability.
Unlike postal employees represented by labor unions, employees represented by NAPS do not benefit from “collective bargaining” or the right to binding arbitration in the event of an impasse between NAPS and the USPS. In contrast, Section 1004(f) of Title 39 of the U.S. Code provides postal supervisors, managers and postmasters with a “consultative process,” with the expectation that front-line managers and Postal Headquarters would be able to work collaboratively to seek equitable and fair compensation.
Section 1004(f) provides for the appointment of a Federal Mediation and Conciliation Service (FMCS) fact-finding panel in the event of an impasse. However, the USPS can and has summarily rejected or ignored the findings of such a panel. NAPS twice has secured the assistance of fact-finding, most recently in 2018. The 2018 fact-finding case, released in spring 2019, found in favor of NAPS, but was rejected by the USPS.
As currently codified, Section 1004(f) fails on three levels. First, the consultative process begins only after the largest postal labor union concludes its negotiation with the USPS. This delay harms front-line postal managers because, in most instances, the old pay and benefits package lapses a year or more before the implementation of a new package.
Second, the Postal Service is able to withhold relevant compensation and workforce data from NAPS before and during the consultative process. Withholding this data disadvantages EAS employees because the information can assist NAPS in advocating on behalf of its members during consultations.
And third, the Postal Service is unaccountable for its consultative decision-making, as it can ignore or reject the deliberative conclusion of the independent and expert FMCS fact-finding panel. In 2019, the three-member fact-finding panel concluded unanimously that the proposed USPS pay and benefits package was not in compliance with the provisions in section 1004 of Title 39.
Specifically, Section 1004(a) directs the USPS to provide compensation and benefits: (1) comparable to the private sector; (2) reflecting an adequate differential between supervisors/managers and the individuals they supervise/manage; (3) to sustain a well-motivated workforce; and (4) to attract qualified supervisory and managerial personnel. The independent FMCS panel agreed with NAPS on virtually every item of disagreement with USPS.
For example, the three-member panel recommended substantial changes to EAS pay rates and recovery of lost pay resulting from the length of the consultative process. In addition, the panel concluded the USPS pay-for-performance system is flawed and should be replaced. Also, the panel urged the USPS and NAPS to convene a joint working group to deliberate over a number of compensatory issues, with the assistance of an independent expert mediator.
Regrettably, the USPS summarily rejected these findings. Consequently, NAPS calls on Congress to enact legislation to provide a fair and equitable process for conducting pay consultations. The two major areas that NAPS seeks though legisislation are included in H.R. 1623, introduced by Reps. Gerry Connolly and Michael Bost.
First, the legislation would calibrate the start of the EAS consultative process to the expiration of the existing consultative pay and benefits package. And second, the legislation would provide for a credible fact-finding process by which the findings of the fact-finding panel would be binding on the USPS.
Equity for All Managerial Postal Employees
The need remains for Congress to clarify current law to assure that all EAS employees in the Postal Service may appeal adverse personnel actions to the U.S. Merit Systems Protection Board (MSPB). Currently, 7,500 nonsupervisory management personnel are locked out of MSPB appeal rights.
H.R. 1624 would correct the situation and assure MSPB access to all Postal Service nonbargaining employees, regardless of whether they supervise USPS operations. The legislation also would extend MSPB appeal rights to employees of the Office of Inspector General of the Postal Service. H.R. 1624 was introduced by Reps. Gerry Connolly and David McKinley.
Currently, the MSPB has been without a quorum for that past four years. NAPS urges President Biden to nominate and the Senate to confirm qualified members to the board.
Retirement Equity for Civil Service Retirement Annuitants and Survivors
Since the early 1980s, Civil Service Retirement System (CSRS) annuitants have been victimized by two provisions added to the Social Security law: The Windfall Elimination Provision (WEP) reduces earned Social Security benefits to account for rightfully earned CSRS benefits. The Government Pension Offset (GPO) reduces the Social Security benefits of widows and widowers who are entitled to survivor annuities left them by their deceased spouses.
Taken together or separately, these offsets are mean-spirited and financially harmful to CSRS annuitants and surviving spouses. NAPS is supporting H.R. 82. The bill would fully repeal both provisions that unfairly target federal retirees who participate in the CSRS or are the surviving spouses of such retirees. Both provisions reduce the Social Security benefits of these individuals.
Protecting Postal and Federal Employees Benefits
NAPS Does Not Anticipate the White House FY22 Budget Will Include Benefit Cuts, but…
NAPS continues to be opposed to budget submissions that result in cuts to earned employee benefits or would pave the way for actions to privatize the Postal Service. NAPS is determined to fight proposed cuts to federal retirement and health benefits.
Federal and postal employees and retirees have been promised hard-earned retirement and health benefits essential to their future financial and health security. Cuts in these benefits would break a congressional commitment that deserves to be upheld.
President Biden has yet to release the Fiscal Year 2022 White House budget. Past budgets by the previous administration attempted to cut federal retirement benefits and require employees to pay more for these benefits. Those budgets proposed to increase employee retirement contributions to FERS approximately six-fold; eliminate the COLA for FERS retirees and reduce the CSRS COLA by 0.5%; change the calculation of federal annuities from the high-3 to the high-5; reduce the earned interest in the Thrift Savings Plan G-Fund; and eliminate the Special Retirement Supplement for FERS annuitants who retire before reaching Social Security eligibility. The projected 10-years savings from these proposals would have totaled $179.5 billion.
Time and time again, federal employee and retiree pay and benefits have been used to offset other spending priorities and bear the burden of reducing a now over $1 trillion budget deficit. Since 2011, federal employees and retirees have contributed more than $120 billion toward deficit reduction. Federal employee paychecks were frozen for three years starting in 2011, followed by three years of reduced pay increases. Postal Service managers and employees, paid under different pay systems, also have suffered.
For example, in 2013 and 2014, Congress increased newly hired federal employee contributions toward their retirement benefits to offset the costs of the “Middle Class Tax Relief and Job Creation Act of 2012” and the “Bipartisan Budget Act of 2013.” Congress needs to find ways to fund government operations in the most sensible ways possible without wasting taxpayer funds, but not at the expense of the federal employee community.
These are the men and women who deliver our mail, protect our borders, conduct food-safety inspections, care for our veterans and help respond to natural disasters. Their careers have been humbly built on serving their county and the American people. They are neither the cause nor the solution to this country’s deficits and its debt; neither should they be the scapegoats.
Also, the past administration proposed the following to the budget as a means to leverage postal privatization and the erosion of universal service. In part, the budget sought to make changes to delivery frequency, processing and mode; increase the use of contracting-out postal operations; and open up the mail box to private couriers. These changes would have undermined the confidence the American public has in the Postal Service.
NAPS remains cautiously optimistic that the FY22 budget will spare the postal workforce and retirees from discriminatory cost-cutting. Nevertheless, NAPS must remain vigilant against last-minute attempts by anti-postal and federal employee members of Congress.
In July 2020, U.S. Postal Service senior leadership accelerated a series of operational changes previously under consideration. These ill-advised changes included decommissioning and removing high-volume mail processing equipment, the required departure of postal transport vehicles from postal facilities before all mail being loaded onto the vehicles and disapproval of overtime.
These actions amplified the challenges the Postal Service should have anticipated as the result of the ongoing COVID-19 pandemic, the surge in package volume and the shift to absentee balloting during the 2020 election season. As the result of overwhelming congressional and public disapproval, Postal Headquarters suspended further implementation of its new policies until after the 2020 election.
Subsequent to the suspension, federal courts ordered the Postal Service to suspend implementation of any policy that could adversely impact the Postal Service’s participation in the election, restore overtime and provide detailed operational data to the courts. The court-ordered reporting requirements provided a high-level of transparency for postal actions, documenting a fall in First-Class Mail on-time performance from 90.7%, in early June to 63.9% at the end of December.
The Postal Service’s much-awaited strategic plan may propose to close and consolidate more mail processing facilities and close and reduce hours at retail facilities. If the Postal Service proceeds with further plant consolidations and retail reductions, more decreases in service likely will occur, harming millions of businesses and households, eliminating thousands of jobs, eroding the Postal Service brand and further reducing Postal Service revenue.
Serious concerns about USPS plant consolidations and retail reductions and their impact on mail service have been raised in the past by the Government Accountability Office, the Office of Inspector General of the Postal Service and members of Congress.
Members of Congress also have raised concerns about the willingness of the Postal Service to provide communities with the opportunity to provide input on the consolidations.
Significant closures and consolidations of mail processing facilities occurred in 2012 and 2015; more could arise once again. In 2012, under Phase I of its “Mail Processing Network Rationalization Plan,” the Postal Service consolidated 141 processing facilities. In 2015, the Postal Service sought to consolidate 82 additional mail processing facilities in 37 states. However, the Postal Service suspended Phase II in 2015 following the consolidation of 37 processing facilities and congressional resistance in response to steady declines in mail-service quality in the overnight and three-to-five-day markets as a result of the consolidations.
Numerous surveys (for example, the Pew Trust, the Gallup Organization and Penomon Institute) have demonstrated the strong public approval and trust the American public has in the Postal Service. Reductions in service will undermine that confidence.
Congress must take action to revitalize the nation’s postal system and restore America’s confidence in our postal system. In the previous Congress, the House of Representatives took a small step in the right direct by passing H.R. 2382, the “USPS Fairness Act.” However, the bill died in the Senate.
This year, identical legislation has been introduced in both the House and Senate, H.R. 695 and S. 145, respectively. Nevertheless, a comprehensive approach is urgently needed to ensure postal vitality.
NAPS believes that meaningful comprehensive legislation would put the Postal Service on a more sustainable financial path. NAPS continues to support comprehensive proposals that would assure prompt and reliable mail service to all Americans through sufficient postage revenues, efficient postal operations and fair fiscal treatment of the Postal Service.
H.R. 695 and S. 145, if enacted into law, would repeal the onerous Postal Service requirement to prefund its future retiree health benefits. The Postal Service has been unable to meet this obligation since FY12. If the repeal measure was current law, the Postal Service would have reduced its FY19 losses by $1.5 billion.
Nevertheless, the House-passed bill alone would not solve the Postal Service’s imminent liquidity crisis nor equip it with tools to attain long-term viability. We are encouraged by early bipartisan support of a “discussion draft” unveiled by House Oversight and Reform Committee Chairwoman Carolyn Maloney.
The starting point of her proposal would be to provide more postal accountability for its performance, repeal the postal retiree health prefunding requirement and more effectively integrate the Federal Employees Health Benefits Program and Medicare for future retirees. NAPS believes that more legislative work needs to be done to ensure postal vitality.
Consistent with NAPS’ recent testimony to the House committee, we believe legislation should provide the Postal Service with greater price flexibility, encourage postal investment and marketing of innovative revenue-producing products and services and enable the Postal Service to invest its retirement trust funds in more appropriate conservative securities than U.S. Treasury securities, which earn meager returns.
Another aspect of postal restoration is a renewed commitment to postal accountability, particularly in light of sagging postal performance during the second half of calendar year 2020. One of the means to reestablish high-quality mail service is permitting front-line managers and supervisors to share their experiences and observations regarding postal operations with members of Congress, the Office of the Inspector General and, when appropriate, law enforcement officials without the fear of retaliation from postal leadership.
Unlike federal workers, Postal Service employees do not have “whistleblower” protection. Union employees can use collective bargaining as protection against potential retaliation. However, EAS-level postal employees benefit from neither the existing whistleblower protection statutes nor from collective bargaining. Therefore, NAPS is seeking expansion of whistleblower protection statutes to cover postal employees not covered by collective bargaining.
White House Interest in the Postal Service
Before January’s presidential inauguration, the incoming administration indicated it considered a viable, universal and affordable Postal Service a government priority. In December, NAPS met with members of President Biden’s transition team to underscore the value of the Postal Service to the nation’s essential infrastructure and the importance of front-line managers to postal operations.
One of the major points NAPS articulated was the need for the President to promptly nominate and the Senate to confirm nominees to the three current vacancies on the Postal Service Board of Governors. In addition, the President may nominate a fourth governor because Chairman Ron Bloom’s term expired in December (he may continue to serve through December 2021, unless replaced sooner).
NAPS is concerned that a number of consequential postal actions have been taken and may continue to be taken without a full board of nine members. In mid-February, President Biden nominated three new governors: former Deputy Postmaster General Ron Stroman, former American Postal Workers Union General Counsel Anton Hajjar and Chief Executive Officer of the National Vote at Home Institute Amber McReynolds.
NAPS also believes the President must use his bully pulpit to restore confidence in the Postal Service and promote responsible and constructive postal restoration legislation. We also believe the Department of the Treasury should permit the Postal Service to seek financial securities in which to invest its retirement fund assets. The Department should not restrict such investments to low-yield, short-term Treasury bonds.
In addition, NAPS believes the White House Office of Management and Budget should recalculate the Postal Service’s retirement and health liability using a more equitable formula. One such formula was proposed by Segal, a benefits and human resources consulting firm, as part of a report to the Postal Regulatory Commission in August 2018.
NAPS believes that constructive postal restoration requires assurance of prompt and reliable mail service to all Americans through sufficient postage revenues and efficient postal operations. Postal restoration includes the following features:
Retiree Health Benefits Funding Reform
The massive and unfair retiree health liability, imposed on the USPS by the “Postal Accountability and Enhancement Act of 2006,” continues to undermine the Postal Service’s ability to remain financially viable. For more than a decade, an annual $5.7 billion prefunding mandate accounted for most of the Postal Service’s losses, despite USPS deposits of more than $50 billion over the past 10 years into the Postal Service Retiree Health Benefits Fund.
Last year, the House passed legislation by an overwhelming bipartisan vote of 309-106. The measure was not considered by the Senate. The legislation would have repealed the mandate that the Postal Service prefund future retiree health benefits, helping to stabilize USPS finances. In January, legislation identical to the House-passed legislation from the previous Congress was introduced—H.R. 695 and S. 145.
Postal Rate Increases
The Postal Service is entirely funded by postage and does not rely on taxpayer dollars. As a result, the Postal Service’s financial stability rests on adequate postage rates. Past postal reform legislation would have allowed the USPS to increase postal rates for market-dominant products above the inflation rate by 2.15%, or 1 cent, for a First-Class stamp.
As required by the 2006 postal reform law, the Postal Regulatory Commission (PRC) in late 2020 issued its 10-year review of the Postal Service’s rate structure and cost allocation methodologies, finding that the current rate structure has not maintained the financial health of the Postal Service. In its final ruling, the PRC proposed that the current consumer-price-index-based rate adjustment be maintained. However, that adjustment would be modified to account for the amount the USPS is required to prefund retiree health and retirement benefits.
In addition, the Postal Service could adjust postage to account for the loss in mail volume per delivery point. Finally, the ruling would permit adjustments for classes of mail that do not cover their costs (for example, publications). Certain members of the mailing community have sued the PRC in federal court to revisit the ruling.
NAPS believes postal restoration legislation needs to equip the Postal Service with greater rate flexibility.
Postal Service Health Benefits Program and Medicare Integration
Retiree health care costs represent a significant expenditure for the Postal Service; the agency is the single largest payer into Medicare. More than 75% of postal retirees maximize the value they earned through contributions to Medicare over their postal careers, reflected by the negligible out-of-pocket health care expenses that Medicare participants enjoy.
These retirees benefit from no-copayments or deductibles for most medical costs. Their full participation, as retirees, also reduces FEHBP premiums for all postal FEHBP participants because of Medicare’s role as the primary insurer for Medicare-eligible retirees.
Unlike previous legislation, this year, it is being proposed that current retirees not be required to enroll in Medicare Part B. In addition, legislation would likely permit voluntary Medicare enrollment for current Medicare-eligible retirees who have thus far declined enrollment. These retirees would be able to enroll without the late-penalty. NAPS is continuing to work with our postal allies to seek the best arrangement to integrate Medicare and FEHBP coverage, without disadvantage to current retirees.
Centralized or Curbside Delivery
In previous years, legislation has called for postal cost savings through phased-in conversion of business door deliveries to curbside or centralized mailboxes. NAPS does not support strategies that would compromise mail security and reduce the service level that postal customers expect. In the current Congress, NAPS supports H. Res. 109, a nonbinding resolution that expresses the sense of the House that residential and business door mail delivery should be maintained.
In previous years, legislation has called for postal costs through reducing mail delivery days. NAPS does not support legislation to reduce accessibility to six-day mail delivery. In the current Congress, NAPS supports H. Res. 114, a non-binding resolution that expresses the sense of the House to ensure the continuation of six-day mail delivery.
The success of the nation’s postal service throughout the past two centuries has rested on its capacity to evolve as America itself changed. Postal reform legislation should authorize the Postal Service’s delivery of nonpostal services to state, local and tribal governments and other federal agencies. It also should require the Postal Service to establish and appoint a Chief Innovation Officer to manage the Postal Service’s development and implementation of innovative postal and nonpostal products and services.
Shipment of Alcoholic Beverages
NAPS supports congressional encouragement of postal innovation and authorizing the USPS to ship alcoholic beverages, ending the Prohibition-era ban that prevents the Postal Service from shipping alcoholic beverages to consumers.
Consumers and manufacturers currently are prohibited from using the Postal Service to ship or deliver alcoholic beverages. These needless restrictions hurt Postal Service market share and revenues because private shippers, such as UPS and FedEx, are exempt from such rules. The Postal Service has estimated that its shipment of alcoholic beverages would annually generate $50 million in new revenue.
In the previous Congress, Rep. Jackie Speier introduced the “United States Postal Service Shipping Equity Act.” The bill would have allowed the USPS to ship alcoholic beverages directly from licensed producers and retailers to consumers over the age of 21, in accordance with state shipping regulations. NAPS supports such legislation.
Digital services, including limited banking, and public-private partnerships with financial institutions that complement the Postal Service’s core products and align with the postal mission, should be encouraged and authorized by Congress.
A 2014 report by the USPS Office of Inspector General (OIG) found that the Postal Service was well-suited to provide nonbank financial payment, credit services and products to the underserved, some in partnership with the private sector. The OIG found that one in four U.S. households lives at least partially outside the financial mainstream—without bank accounts or reliant only on costly payday lenders.
The United States had a Postal Savings System from 1911 to 1967, which, in 1947, had$3.4 billion in assets (more than $35 billion in today’s dollars) or about 10% of the entire commercial banking system. Worldwide, 1.5 billion people receive some financial services through their postal service.
NAPS supports the restoration of limited postal banking services by the Postal Service and public-private arrangements between the Postal Service and financial institutions. Legislation introduced in the 115th Congress would have expanded the authority of the Postal Service to provide basic financial services, including small-dollar loans, checking accounts, interest-bearing savings accounts and services relating to international money transfers.
Modernizing Investment of RHBF Assets
Revising how Retirement Health Benefits Fund (RHBF) assets are invested would provide a higher rate of return and reduce the Postal Service’s retiree health liability. At the conclusion of FY18, the RHBF contained $47.5 billion in assets.
NAPS supports legislation to authorize the investment of USPS retiree health assets in index funds offered by the Thrift Savings Plan. We believe such legislation would modernize how these funds are invested and bring these investment practices in line with private-sector business and investment practices.
The National Association of Postal Supervisors encourages sponsorship of the following bills:
Primary Sponsors: Reps. Gerry Connolly (D-VA) and Mike Bost (R-IL), introduced March 4, 2020
Contacts: Wendy Ginsberg, 202-225-5051, firstname.lastname@example.org (Connolly); Noah Barger, 202-225-5661, email@example.com (Bost)
This bill would provide for the timely start of pay talks between Executive and Administrative Schedule (EAS) postal employees and the Postal Service by decoupling EAS pay consultations from the protracted timeline of collective-bargaining between the largest postal union and the USPS. Under the bill, EAS pay talks would start 60 days before the expiration of the existing EAS “pay agreement.” In addition, the bill would establish a fair and credible process for conducting pay consultations by binding the USPS and the supervisors’ organization to the findings and conclusions of an independent Federal Mediation and Conciliation fact-finding panel.
Primary Sponsors: Rep. Gerald E. Connolly (D-VA) and Rep. David McKinley (R-WV), introduced Jan. 16, 2019
Contacts: Wendy Ginsberg, 202-225-1492, firstname.lastname@example.org (Connolly); Allie Hildebrand, 202-225-4172, email@example.com (McKinley)
This bill would confer to approximately 7,500 nonsupervisory managerial postal employees the right to appeal significant personnel actions to the Merit Systems Protection Board. Currently, non-supervisory postal personnel only may appeal such actions through an internal USPS process that lacks impartial third-party review. Postal supervisory personnel and nearly all federal civil service employees already enjoy MSPB appeal rights.
Primary Sponsor: Rep. Rodney Davis (R-IL), introduced Jan. 4, 2021
Contact: Nathan Canterbury, 202-225-2371, firstname.lastname@example.org. gov
This legislation would repeal the Government Pension Offset and Windfall Elimination Provision, sections of the Social Security law that unfairly reduce the rightful benefits of Civil Service Retirement System annuitants and surviving spouses of these annuitants.
Primary Sponsor: Rep. Gerry Connolly (D-VA), introduced Jan. 13, 2021
Contact: Wendy Ginsberg, 202-225-5051, email@example.com
This bill would create parity between cost-of-living adjustments with respect to a Federal Employees Retirement System (FERS) annuity and a Civil Service Retirement System (CSRS) annuity.
Primary Sponsor: Rep. Peter DeFazio (D-OR), introduced Feb. 2, 2021
Contact: Robert Puckett, 202-225-6416, firstname.lastname@example.org
This bill would repeal the requirement that the U.S. Postal Service prepay future retiree health costs. During the previous Congress, the House passed an identical bill.
Primary Sponsor: Rep. Stephen Lynch (D-MA)
Contact: Bruce Fernandez, 202-225-8273, email@example.com
This nonbinding resolution expresses the sense of the House that U.S. Postal Service employees should be accorded priority status in the administration of the COVID-19 vaccines.
Primary Sponsor: Rep. Stephanie Murphy (D-FL), introduced Feb. 5, 2021
Contact: John Laufer, 202-225-4035, firstname.lastname@example.org
This nonbinding resolution expresses the sense of the House that residential and business door mail delivery should be continued.
Primary Sponsor: Rep. Stephen Lynch (D-MA), introduced Jan. 13, 2021
Contact: Bruce Fernandez, 202-225-8273, email@example.com
This nonbinding resolution expresses the sense of the House that Congress should ensure the U.S. Postal Service is not privatized and remains an independent establishment of the federal government.
Primary Sponsor: Rep. Gerry Connolly (D-VA), introduced Feb. 11, 2021
Contact: Wendy Ginsberg, 202-225-5051, firstname.lastname@example.org
This nonbinding resolution urges the U.S. Postal Service to take steps to ensure continuation of its six-day mail delivery service.
Primary Sponsor: Sen. Steve Daines (R-MT)
Contact: Will Parsons, 202-224-2651, email@example.com
This bill would repeal the requirement that the U.S. Postal Service annually prepays future retiree health benefits.
Categories: The Postal Supervisor