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).
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.