Tomorrow, the House Budget Committee will begin consideration of a budget resolution  drafted by committee chair, Rep. Diane Black (R-TN). The proposal would, in part, increase federal and postal employee contributions for the Federal Employee Retirement System (FERS) and eliminate the supplemental retirement for FERS employees who retiree prior to Social Security eligibility. These two proposals are included in President Trump's fiscal year 2018 budget.

As was discussed at UPMA's February Legislative Advocacy Day, one of the most dangerous threats against UPMA member retirement benefits is the congressional budget process -- more specifically, "budget reconciliation." Budget reconciliation is a vehicle buy which the Budget Committee assigns cuts to the committee with jurisdiction over certain federal programs. The House Budget Committee's just-released budget document instructs the House Oversight and Government Reform Committee, the House committee responsible for federal retirement, to come up with $32 billion in budget savings. This amount reflects a 6-year phase-in of a 6% increase in FERS contributions and the elimination of the FERS supplement. The budget document also contemplates the elimination of FERS. It also appears that the budget savings will be used to boost military spending and  fund tax cuts.

UPMA members should contact their members of Congress to oppose the federal and postal retirement hits.

Rep. Gowdy to Chair Oversight and Government Reform Committee

Posted by Bob Levi on 06/08/17

Yesterday, the Congressional Budget Office (CBO) finally released the projected cost associated with enactment of HR 756, the Postal Reform Act of 2017. The CBO determined that the bill would reduce federal spending by $6 billion over the next decade.

On March 16, the House Committee on Oversight and Government Reform approved HR 756 by voice vote. The CBO estimate is a prerequisite for a vote by the House of Representatives, and is an essential step for consideration by the House Ways and Means Committee and the House Energy and Commerce Committee. The legislation was referred to these two committees, since a provision in the bill impacts the Medicare program and the panels have jurisdiction over the program.

The major budget effects of HR 756 are as follows: The partial restoration of the exigent postage rate would increase postal revenue by $8.6 billion; the phase-out of door delivery for business mail would save $2 billion; and the creation of a postal health plan within the FEHBP, combined with Medicare integration, would increase spending by $4.5 billion. Consequently, there is a net 10-year savings of $6 billion.

Additional revenue could accrue to the Postal Service as the result of providing services on behalf of state, local and tribal governments, and from changes in the manner that the USPS contracts with private entities. Moreover, modest USPS savings would result from using postal-specific data for calculating certain retirement liabilities.

Medicare integration, a consequential element of HR 756, would result in USPS savings of $4.7 billion. However, since Medicare will become the primary insurer for all Medicare-eligible annuitants, Medicare costs would grow by $10.7 billion -- this includes Medicare Part B coverage and providing the USPS with a prescription drug subsidy. Interestingly, USPS Medicare integration would reduce non-postal FEHBP premiums by $3.3 billion. 

Finally, CBO projects that the financial relief provided by the bill would enable the agency to resume modest investment in infrastructure and operations.

Bipartisan House Goververnment Oversight & Reform Committee Leadership Introduce Postal Relief Bill

Posted by Bob Levi on 01/31/17

First Week of Congress and UPMA Legislative Advocacy Day

Posted by Bob Levi on 01/10/17