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2009 Annual Report United States Postal Service | 57
LEGISLATIVE UPDATE
Appropriations
The Postal Service is self-funded and does not receive an
appropriation from Congress for its operations. However,
the Postal Service has received limited appropriations as
reimbursement for unfunded services that are statuto-
rily mandated. On March 11, 2009, the omnibus appro-
priations legislation became P.L. 111-8, granting funding
for the fi scal year ending September 30, 2009. For the
Postal Service, this law provided approximately $112 mil-
lion, which included $29 million for repayment of revenue
forgone that had been unfunded in prior years. The law
also stated that $83 million of the appropriation (not made
available until October 1, 2009) was given to fund statu-
torily required services for free mail for the blind and over-
seas voters. Also contained in the law was the require-
ment that the Postal Service continue to maintain six-day
delivery service.
Retiree Health Benefi ts
On October 1, 2009, the President signed P.L. 111-68,
which included a continuing resolution provision that re-
duced the scheduled $5.4 billion retiree health benefi t pay-
ment due from the Postal Service on September 30, 2009
to $1.4 billion. For more information, see Note 5, Subse-
quent Events, in the Notes to the Financial Statements.
Fuel-Effi cient Vehicles
On June 1, 2009, the General Services Administration
(GSA) made a $210 million purchase of new vehicles
from Chrysler, Ford and General Motors using a portion
of the funds provided to GSA in the American Recovery
and Reinvestment Act of 2009 (P.L. 111-5). Part of this
GSA purchase benefi ted the Postal Service by allowing it
to replace over 6,500 vehicles from its current fl eet with
more fuel-effi cient models. Of that number, 1,000 of the
new vehicles were E-85 ethanol-capable and 900 were
hybrids. The other 4,600 were conventional cars powered
by four-cylinder gasoline-powered engines. Each new ve-
hicle had a higher miles-per-gallon rating than the one it
replaced. The excess of the fair value of the new vehicles
over the fair value of the vehicles surrendered was treated
as a capital contribution of the U.S. government on our
balance sheet. The fi rst 3,424 vehicles received in 2009
had a fair market value of approximately $57 million, re-
placing vehicles with a book value of $4 million.
Sick Leave Credit for FERS Employees
Provisions that would give FERS employees credit for un-
used sick leave when computing their retirement annuity
were included in Public Law 111-84, the Fiscal 2010 De-
fense Authorization Act, signed by the President on Oc-
tober 28, 2009. The provision will be phased in over four
years. FERS employees who retire between the date of
the law’s enactment (October 28, 2009) and December
31, 2013, will receive a 50 percent credit for their unused
sick leave. FERS employees who retire on or after January
1, 2014, will receive full credit for their unused sick leave.
OPM will calculate any change in the Postal Service’s
unfunded liability or surplus in the CSRDF. The law may
necessitate higher retirement contribution rates for FERS
employees in the future. There will be no change to the
FERS retirement rate contribution in 2010.
OUTLOOK
The fi nancial outlook for the Postal Service is closely linked
to the outlook for the U.S. economy. In the past two years,
the American economy experienced its worst economic
downturn since the Great Depression and mail volumes
fell precipitously. Looking ahead, there are expectations for
a gradual economic recovery in 2010. Although the Com-
merce Department recently reported that Quarter IV GDP
rose at an annualized rate of 3.5%, compared to Quar-
ter III, year-over-year growth was still negative. IHS Global
Insight, an economic and forecasting consulting fi rm, is
forecasting positive year-over-year growth in the economy
as measured by real GDP beginning in our second quarter
of 2010. This forecast projects very weak GDP growth for
all of 2010.
Mail volume, however, is weakly correlated with GDP.
Trends in employment, investment expenditures, and retail
sales are better indicators of mail volume trends. Weak
growth in investment and retail sales is predicted for 2010.
Recovery in employment is expected to lag the broader
economic recovery, just as it did in the recession of 2001.
In the longer term, economic growth as measured by
all these statistics is expected to continue but at growth
rates below those of the late 1990s. The slower long-term
growth trend is expected to suppress long-term growth in
mail volumes.