CBO Cost Estimate of H.R. 5714 – Postal Service Reform Act of 2016

cbo-3As ordered reported by the House Committee on Oversight and Government Reform on July 12, 2016:
H.R. 5714 would change the laws that govern the operation of the Postal Service (USPS), restructure how the federal government pays for health benefits for federal employees and annuitants, and alter how the federal government calculates the contributions that agencies make for retirement benefits. Major provisions of the bill would:

  • Partially reinstate a postal rate increase that expired in April 2016 (direct spending savings of $8.4 billion);
  • Change the requirements for the security of parcels sent by air (direct spending costs of $3.2 billion);
  • Authorize the Postal Service to phase out delivery of mail directly to business customers’ doors (direct spending savings of $2.0 billion);
  • Establish a new health benefits program for Postal Service employees, annuitants, and their dependents (net direct spending costs of $4.7 billion and discretionary savings of $1.8 billion);
  • Change the nature of the payments that the Postal Service is required to make related to retiree health benefits (no net effect on direct spending); and

Require the use of demographic data specific to Postal Service employees for the calculation of certain retirement benefits, (no net effect on direct spending, but discretionary costs totaling $5.9 billion).[1]
[1] CBO estimates that this change would reduce costs to the Postal Service by $0.4 billion but increase the other federal retirement costs by the same amount. In addition, CBO estimates the Postal Service would spend half of the savings it would realize in lower retirement costs. Thus we estimate this policy would lead to a government-wide cost of $0.2 billion.

2 thoughts on “CBO Cost Estimate of H.R. 5714 – Postal Service Reform Act of 2016

  1. Union and NAME of Local/Branch
    APWU - Traverse City MI Area Local
    Office held, if any
    Michigan State Retiree Chapter President, Central Region Retiree National Convention Delegate
    A new separate Health Plan for postal workers only in this proposal? As I recall, former APWU President Guffey was roundly criticized for even hinting at agreeing to such. The bigger the pool- all federal workers and retirees -the lower the premiums. How does this new postal Health make sense?

  2. Union and NAME of Local/Branch
    NPMHU Local 300
    I need one of the idiots that wrote this bill to explain how partially reinstating the postal rate increase will lead to a direct spending savings! amongst other things

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