* Postal Service says overpaid into federal pension fund
* Seeking refund as a way to cope with huge losses
* GAO says refund could endanger federal worker benefits
By Emily Stephenson
WASHINGTON, Oct 13 Returning up to $75 billion
the U.S. Postal Service believes it overpaid into a federal
pension fund would not solve the agency's long-term financial
problems and would force the government to pay billions more
for worker pensions, the Government Accountability Office said
The Postal Service has recently lost billions of dollars
each quarter as consumers use email and pay bills online.
The agency is trying to cut costs, looking at closing
thousands of post offices and asking Congress for permission to
end Saturday delivery.
A refund would "provide some temporary relief from the
pressures USPS faces due to declining volume, revenue and
inflexible costs, but would not by itself address USPS's
long-term financial outlook," the GAO said in its report.
The government watchdog said it did not believe the Postal
Service could cut costs fast enough for a transfer of funds
from the pension fund to cover the agency's debt and address
current and future operating losses.
The overpayment controversy stems from the 1970s, when the
Postal Service was formed as an independent agency. The USPS
and the U.S. Treasury Department agreed on a method for sharing
workers' pension costs, but the Postal Service has since argued
its share of the payments was too large.
The agency hoped the return of money from the Civil Service
Retirement System would solve its financial problems long
enough to allow it to cut costs and return to profitability.
A consulting firm determined in a 2010 study for the Postal
Regulatory Commission that, while the allocation of pension
funds was legal, it did not match current actuarial practices.
Postal worker unions have pushed for the refund in hopes it
would prevent the agency from moving forward on a proposal to
eliminate 220,000 jobs by 2015.
The refund idea is featured prominently in postal overhaul
bills offered by Democrats in Congress. Senate staffers have
said lawmakers were waiting to see the report before acting on
Republicans including Darrell Issa, whose House of
Representatives committee will debate his postal bill on
Thursday, have said a refund could increase federal government
liabilities for workers' pensions.
GAO said transferring billions of dollars away from the
fund would leave the government on the hook for between $55 and
$85 billion dollars and could lead to pressure to cut pension
benefits for federal workers.
"The disagreement among the experts over the Civil Service
Retirement System overpayment is significant enough that I
believe it would be more prudent to set aside this
question...to focus on the areas of postal reform where we have
more consensus," Senator Tom Carper, a Democrat, said in a