By Bernie Becker - 06/22/11 11:50 PM EDT
The U.S. Postal Service announced Wednesday that it is taking new cost-cutting measures with a retirement program, but lawmakers from both parties reiterated that much more needs to be done.
In its latest bid to shave costs, the Postal Service has said it will stop contributing to the Federal Employees Retirement System (FERS), a move it says will save roughly $800 million this fiscal year.
The latest move from USPS comes as it tries furiously to get its finances in order, including by requesting to reduce delivery to five days a week.
In its Wednesday release, USPS said that its $115 million payment every other week for FERS will be suspended on June 24, and that it had overpaid into the program by almost $7 billion. Anthony Vegliante, USPS chief of human resources, added that it would continue to pay into the Thrift Savings Plan, another retirement initiative.
The service also asked Congress to allow it to access that and other retirement overpayments, as well as to allow it to reduce healthcare costs.
Collins and Carper have both introduced legislation to make changes to USPS, with Collins noting in a statement that USPS has said it will not be able to pay the $5.5 billion due to the government in September for employee healthcare costs.
The Maine Republican — the ranking member on the Senate Homeland Security Committee, which oversees the Postal Service — also expressed concern that USPS wouldn’t be able to meet its payroll by late next year.
Carper, the chairman of the Homeland Security subcommittee on USPS, said that the service should be allowed to use overpayments to meet other expenses, something it is currently not allowed to do.
“The Postal Service’s decision to suspend payments to FERS is just one painful step of many that may be necessary to help keep the Postal Service solvent in the short term,” Carper said in a statement. “It will not, however, fix all that ails the Postal Service.”
Issa, who was troubled by a recent contract for the postal workers union, said the service’s financial situation “would not be tolerated in a private company.”
“USPS needs fundamental structural and financial reforms to cut costs and protect taxpayers from an expensive bailout,” the chairman of the House Oversight Committee added.
Representatives for USPS have said they are not seeking a bailout, with the service declaring Wednesday that it had reduced spending by $12 billion over the last four fiscal years — getting rid of 110,000 positions in the process.
In March, the mail carrier — which does not get tax dollars for operating expenses — said it was eliminating 7,500 jobs as part of a push for $750 million in yearly savings.
But the Postal Regulatory Commission has also said that the USPS was overestimating how much money it would save by scrapping Saturday delivery. Collins and other lawmakers have said that change would disproportionately hurt rural Americans.