Newsletters

NAPFE NEWSLETTER JUNE/JULY 2003

POSTAL NEWS

Postal Commission’s Troubling Recommendations. On July 16th and 23rd, the nine-member President’s Commission on the U.S. Postal Service held public meetings to vote on its final recommendations that will be in its final report to the President. The Recommendations from the Commission’s co-Chairs and its four specialized subcommittees (Business Model; Private Sector Partnership; Technology; and Workforce) rejected the privatization of the Postal Service and proposed greater flexibility which would allow the Postal Service to act more as a business. However, the recommendations contain some troubling provisions, which include, but are not limited to:
• Maximizing the Use of the private sector for activities such as transportation, maintenance and information systems;
• Subject health and retirement benefits to the collective bargaining process;
• Determine pay comparability with the private sector and reduce postal pay if it is determined that Postal employees are paid more than the private sector that this “premium” be eliminated over time;
• A Pay for Performance bonus for management and represented employees that would result in an unequal pay structure for employees and as Commissioner Norman Seabrook, the panel’s only labor representative noted, could perpetuate an “ole boys’ network”; and
• A reduction of workers compensation benefits to “2/3 of the maximum weekly rate.”

The full report is due on July 31, 2003. Adopted recommendations in the Final Report can be found at the Commission’s website at www.treas.gov/offices/domestic-finance/usps at the Final Report and Recommendations link.

NAPFE has joined the Consumer Alliance for the Postal Service (CAPS), chaired by former Congressman William Clay and will work with its partners in the postal community to counteract the Recommendations in the Report that are detrimental to the interest of Postal Employees and the public at large.

Senator Introduces Postal Reform Bill. Delaware Senator, Tom Carper, has introduced the Postal Accountability and Enhancement Act of 2003 (S.1285). In his Press Release announcing the legislation, Carper states that his legislation will preserve Universal Service while protecting collective bargaining rights. It would reconstitute the Postal Rate Commission as the Postal Regulatory Commission with the ability to subpoena Postal Service employees and fine the Postal Service if it finds violations of rates or regulations. The legislation would also change the rate-making process and ensure that the Postal Service competes fairly with its competitors.

After hearing the Postal Commission’s recommendations, Senator Carper denounced those calling for restructuring the pay and benefits of postal workers and changing the collective bargaining system. Carper cited his legislation, which is based on previous legislation introduced by Congressman John McHugh (R-23-NY), as the vehicle to protect workers while giving the Postal Service the flexibility it needs.

Postmasters Win Negotiating Rights. Both the Senate and House passed the Postmasters Equity Act of 2003 (S.678 and H.R. 2249). The legislation allows the nation’s 26,000 Postmasters to use fact finding when negotiating for pay and benefits, the same right afforded to supervisors. Before, the Postmasters had just a consultative process.

Supreme Court to Answer: “Is the Postal Service a Person? The Supreme Court has agreed to hear the case of U.S. Postal Service v. Flamingo Industries, Ltd. The nation’s highest court will answer the question of whether the Postal Service is subject to the nation’s anti-trust laws, a law that applies to “persons” such as corporations and associations but does not apply to the government. Typically, the government’s actions are protected by sovereign immunity – which protects the government from lawsuits unless it agrees to be sued. The Court agreed to hear the government’s appeal from the 9th Circuit decision that said the Postal Service lost its sovereign immunity under the Postal Reorganization Act and therefore is subject to the nation’s anti-trust laws.

Early Outs. The Office of Personnel Management (OPM) has approved the Postal Service’s request to offer Voluntary Early Retirements to all eligible employees under collective bargaining agreements. The early outs came about as a result of new regulations from OPM entitled, Reshaping Voluntary Early Retirement Authority (Reshape VERA). These regulations allow agencies to request early-out authority form OPM alleging that they need to address a “skills imbalance,” rather than the previous downgrading or layoff requirements under previous VERA. According to reports, the Postal Service has determined that it has 16,000 more clerical employees than it needs.

Early Outs, cont.

Eligible employees must have at least 25 years of creditable service as of October 31, 2003 or be age 50 or older as of November 1, 2003 with at least 20 years of creditable service as of October 31, 2003. Employees who sign the Statement of Interest are not committing to retire but merely indicating an interest. The Postal Service will then validate their eligibility and those deemed eligible will receive a retirement application, an annuity estimate, a service history report and filing instructions.

It is expected that the Postal Service will offer another Early Out opportunity in February 2004. Also, according to the Postal Commission estimates, the Postal Service will have opportunities to right size through attrition when 47 percent of current employees will be eligible for retirement in 2010.

USPS: One of the Best for Minorities. Fortune magazine has named the Postal Service the 11th “Best Company for Minorities” in the nation. In 2002, the Postal Service reported its minority workforce comprised of 21.2 percent African Americans, 7.5 percent Hispanic, 7 percent Asian and .6 percent Native American. It also reported that 20.5 percent of top-paid executives and 31 percent of all officials and managers are minorities.

FEDERAL NEWS

New Rules for Outsourcing Federal Jobs. The Office of Management and Budget (OMB) has issued new rules in Circular A-76, the rules governing competitive sourcing – competition between federal employees and private contractors for federal jobs. Highlight under the new rules include: the time for a standard competition has been reduced from 2 to 4 years to 12 months; streamlined competitions now have a 90 day time limit, when they had none before; direct conversion of programs with 10 jobs or less are no longer allowed; the award criteria has changed from who will do the job for the lowest cost to the “best value criteria” which include costs plus other factors; and whereas before, there was no provision for re-competition, the new rules call for re-competition every 3 to 5 years.

OMB is adamant that the new rules will save the taxpayers money and will make the government more efficient. NAPFE disagrees. The new rules are negatively affecting the morale of federal employees, competitions are targeting jobs held disproportionately by minorities and women and there is no clear accountability for the contractors who win job competitions. We are working with the NAACP Federal Sector Taskforce and other federal unions to address these inequities in the new rules.

Federal Retirees and Medicare. The House has passed legislation that allows federal retirees to keep their current level of drug benefits. This legislation was prompted by concerns by the Congressional Budget Office that 37 percent of employees will drop their drug coverage for retirees under the newly passed 10 year, $400 billion Medicare Drug Prescription Drug Plan. Sponsored by Thomas Davis, III, (R-11-VA), Chair of the House Government Reform Committee, the legislation prevents the Federal Employees Health Benefits Plan (FEHBP) from offering less drug benefits to retirees than it does to current employees. In an interview with the Federal Times newspaper, Representative Davis said that the legislation is an example of the government leading by example. A suggestion to private employers not to terminate their drug benefit programs to retirees should the Medicare Drug benefit legislation become law. A similar bill has been sponsored in the Senate by Daniel Akaka, (D-HI).

Conversion Legislation. Under a bill proposed by Representative Tom Davis (R-11-VA), federal and military retirees will be allowed to pay health insurance premiums with pre-tax dollars. This would extend the current $434 annual tax savings to retirees, a savings they do not presently enjoy. In a hearing on the legislation, Congressman Davis noted that premiums have increased 10 percent a year since 1998 while cost of living increases for retirees is only 1.96 percent to 2.38 percent. It is estimated that the legislation will cost $7 billion over 10 years putting its changes of becoming law at risk at a time of increased deficits. In the past, the legislation was referred to the House Ways and Means Committee where it died due to lack of attention. However, this year, Congressman Davis rewrote the bill to give jurisdiction to the Government Reform Committee’s Subcommittee on Civil Service and Agency Organization, which voted to pass the bill to the full Committee. The House bill has 289 co-sponsors. However, the companion bill in the Senate with 43 co-sponsors has been referred to the Senate Finance Committee where it may meet the same fate that the House bill found in the Ways and Means Committee.