About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

273 IRET Congressional Advisory 1 (2011)

handle is hein.taxfoundation/iretcgadv0270 and id is 1 raw text is: INSTITUTE FOR RESEARCH ON THE ECONOMICS OF TAXATION IRET is a non-profit 501 (c)(3) economic policy research and educational organization devoted to informing the public about policies that will promote growth and efficient operation of the market economy. March 14, 2011 Advisory No. 273 DOES THE U.S. TREASURY OWE $75 BILLION TO THE POSTAL SERVICE? Executive Summary The Postal Service Office of Inspector General (GIG) released a study in January 2010 claiming the Postal Service is entitled to $75 billion from the U.S. Treasury. The Postal OIG alleges that the U.S. Office of Personnel Management (OPM), acting as the federal government's agent, has overcharged the Postal Service $75 billion in pension costs since the 1970s. With postal pensions already well funded, the Postal OIG proposes using most of the money to support an entirely different fringe benefit: underfunded postal retiree health care. The proposed transfer would increase the burden on the U.S. Treasury and taxpayers. At issue is how the Postal Service and U.S. Treasury should have divided the Civil Service Retirement System (CSRS) pension costs of early postal employees who had worked before July 1971 at the old Post Office Department. The Postal OIG claims its approach is required by fairness and the law. A study commissioned by the Postal Regulatory Commission (PRC) endorses the Postal OIG's approach as equitable. OPM responds that it correctly followed a 1974 law that specifically addressed the issue and was regarded at the time as fair and responsible. A study by OPM's OIG strongly supports OPM. The Postal OIG does not claim the retirement benefits of any postal workers are threatened - they are safe - and notes the transfer would be retroactive, involving a recalculation extending back nearly 40 years. Senator Thomas Carper (D-DE), Senator Susan Collins (R-ME), and Rep. Stephen Lynch (D-MA) introduced bills in 2010 based partially on the Postal OIG's recommendations. Senator Collins has reintroduced a modified version of her bill and more bills are expected soon. This paper reviews the history of the allocation question, including relevant legislation, and presents the conflicting positions. The paper then examines the subjective concept of fairness and finds strengths and weaknesses on both sides. The costs of the existing allocation methodology have been passed forward to mail users in postage rates. The allocation methodology is not the cause of the Service's current, worrisome financial problems. The proposed transfer's retroactivity would be unusual and raises fairness and budget concerns. Although this issue may seem obscure, the amount of money at stake makes it worth examining carefully.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most