1 Postal Government Relations Mailers Technical Advisory Committee August 13, 2009

2 Retiree Health Benefits:  Two bills that address USPS RHB -- H.R. 22 and S  USPS supports both bills — goal is to secure RHB legislative change  Administration is supportive of change in USPS Retiree Health Benefits payment

3 Quick Bill Recap: S. 1507:  Introduced by Senator Tom Carper (D-DE); Senators Joseph Lieberman (I-CT) and Daniel Inouye (D-HI) are co-sponsors  Embraces Administration's proposal to restructure RHB payments over next 10 years:  Lower total payments in first 5 years and slightly higher payments in last 5 years  Awaiting CBO score  On July 30, 2009, Senate Homeland Security and Governmental Affairs Committee passed amended bill and referred bill to Senate floor  Four amendments adopted

S Amendments  #1 Borrowing Authority: Eliminates additional $4 billion in borrowing authority above $15 billion cap. USPS can use an additional $2 billion in FY2009 & 2010 above annual $3 billion cap. (Senator Susan Collins (R-ME))  #2 GAO Study: By March 31, 2010, GAO to submit long-term structural and operational reform study necessary to achieve financial stability (Senator Susan Collins (R-ME))  #3 Direction to Arbitrator: Requires arbitration board to consider USPS financial condition. (Senator Thomas Coburn (R-OK))  #4 Bonuses: If USPS has a year-end loss for the preceding FY, then bonuses are prohibited for certain employees. (Senator Thomas Coburn (R-OK))  GAO study will initiate broader debate about how USPS serves American public

5 Quick Bill Recap: H.R. 22:  339 co-sponsors - over three quarters of the House  Provides 3 years of relief from premium RHB payments  Scores $2.5 billion over 3 years

6 Current Status  Administration and Leadership in Congress committed to helping USPS w/ RHB payment issue  USPS has repeatedly advised Congress, Administration that w/out legislative change, USPS cannot pay all of its RHB obligation at the end of this fiscal year  Other stakeholders have weighed in, i.e., OIG has stated that assumptions factored into our RHB payment amounts need to be revisited: oWorkforce population will continue to decline oRate of Health Care inflation too high  House staff exploring offsets available to $2.5 billion score of H.R. 22  Senate staff acknowledges that S is a short-term fix

7 Next Steps:  Congress in recess until after Labor Day  USPS Government Relations using this time to continue Congressional staff outreach: oUrging immediate action  Working w/ Communications to get message out to broader influential audience including business and trade publications: oRHB Legislative Change needed before Sept. 30 oLong-term structural change needed for USPS  Wide dissemination of USPS 3rd quarter financials  Engaged in a broader public policy debate now about need for 6 to 5 day delivery and other USPS cost-cutting actions and the larger question about proper USPS business model