review both pre and post retirement age benefits to determine fair benefit amounts. this request was made in response to the administration's proposal because it is not clear that their proposal has responsible changes to benefits. so we simply do not have the information we need to decide on fair benefit levels and that's why i think what we're doing is premature and offer this amendment, mr. chairman. >> thanks, senator akaka. would you like a roll call vote on this? >> yes. >> okay. clerk will call the roll on number one. >> senator levin? >> aye. >> senator akaka? >> aye. >> senator carper? >> no. >> senator pryor? >> aye. >> senator landrieu?

>> no instruction. >> senator mccaskill? >> no. >> senator tester? >> no. >> senator begich? >> yes. >> senator collins? >> no. >> senator coburn? >> no by proxy. >> senator brown? >> no. >> senator mccain? >> no by proxy. >> senator johnson? >> no. >> senator portman? >> no by proxy. >> senator paul? >> no. >> senator moran? >> no. >> senator lieberman? >> no. >> mr. chairman, on the vote of those present, the ayes are five, the nays are eight. on the vote by proxy, the yays are zero, the nays are three. on this vote the ayes are five, the nays are 11. and the amendment is not agreed to.

>> i thank the clerk. thank you, senator akaka. of those here, let me indicate that next we'll go to senator johnson and then senator mccaskill. then senator paul, then senator tester, then senator moran and then senator begich. all of whom have amendments pending. senator johnson? >> thank you. i'd like to offer johnson amendment number one and only. i would -- like my colleague from kansas, new to this process, and as i studied the issue, there's pretty -- pretty eye popping charge here that the gao study laid out the deficits of the 30esal service and it's $250 billion and it is a quasi private quasi governmental agency here, but the fact of the matter is if we experience those types of deficits we'll be on the hook for it.

or the taxpayers will be on the hook for that. that certainly governs my votes in this process. my amendment recognizes my concern about the $6.9 billion -- what's referred to as an overpayment. i think the overpayment is primarily the result of a recalculation based on actuarily assumptions which can change. when you take a look at an overpayment in the pension fund, i kind of like the fact there's a cushion there, particularly when you look at a going concern like the postal service that doesn't look like a going concern. you want to make sure they're properly funded and having a little bit of a surplus. so i hate to see the fact that we're trying to spend that surplus. so what my amendment does, it would remove section 102 which allows the postal service to offer up to one year of

accredited service and up to two years in the employees retirement system as an incentive to encourage retirement. i understand the rationale using the retirement to reduce the work force, but we're spending a retirement surplus which would be a good buffer and i think we passed out a sheet we went to the office of personnel management to see what type of payouts could this potentially result in. and the range is -- i will say somewhat eye popping. you can be as low as the $6,000 level. it can be as high as $280,000 benefit. and so i just don't think in the time when we're running $1.3 trillion of the deficits and the postal service is looking at a ten-year annual deficit figure that we should be offering something that's unprecedented. i think the office of personal

management has stated this is an unprecedented payout to individuals, and it could certainly unfortunately act as an incentive in future areas where we're trying to reduce the government work force to handle the exact same way. so i think it's a bad precedent. i would usual people to support it. thank you, mr. chairman. >> thank you, senator johnson. i appreciate the amendment. we could -- obviously one of the major responsibilities that the postal service has is a necessity is to reduce the level of employment. it -- as we have said here before this morning, 80% of the costs are personnel. it's much higher than fedex and u.p.s. but we have to acknowledge that as we did in the discussion with senator moran, this is a different kind of institution and it has a requirement of universal service so it does need more personnel.

in fact, the network that it has to deliver to the so-called last mile is one of its great assets. so great that u.p.s. and fedex as senator levin referred earlier basically purchased the services of the u.s. postal service for the delivery of that last mile. considering even all that, we still think that the postmaster feels very strongly about this and the unions have cooperated with some significant reduction in work force, but we need more. there have been some suggestions that we should legislate to override existing contracts. collective bargaining agreements to allow involuntary departures from the postal service, but we thought that that was not a fair thing to do. so working with the postmaster general, we have created this system of incentives, both -- basically bonuses -- a bonus to retire not more than $25,000 and

then at the request of the postmaster i believe to add in the possibility of or -- it's an either/or of service credits to reach 100,000 employees who are eligible for retirement who will retire as a result of this package. the savings will be quite enormous and they do come out, of this refund from this pension fund. but as you say doesn't mean it should be spent unless there's a good reason to spend it. the estimates are that this program to -- the work force of the postal service by an additional 100,000 employees will probably consume about a third, maybe less, a third of the money of the refund from the firs pension system.

so two-thirds will be there as a cushion. we decided a cost effective over the long run was to accept the suggestion that we offer service credits to encourage people to retire, the savings will be much greater. much, much greater than what they cost. but i appreciate your points. they're thoughtful. and respectfully for the reasons i have stated i'll oppose the amendment. senator collins? >> thank you, mr. chairman. as the chairman and the other negotiators know, this was an issue of concern to me when it was first brought to us by the postal service. it was a far more general -- generous proposal that was originally proposed to us. that's why we capped it at one year service credit for the csrs program and two years for the

first program and capped at the buyout amount at 25,000 dollars. keep in mind that the postmaster general is going to determine what is offered within the confines of a set amount of money. the postmaster general has told us that he believes that it will be approximately $1.7 billion that would be used for the buyout program to reduce the total work force by almost 20%. he's talking about 100,000 to 110,000 employees. so i felt giving him this limited flexibility makes sense. because we've got essentially a cap on the program as a whole. i would also note that crs ran the numbers and had a different

result than you have come up with. i know your opm and take a worst case scenario and one that could happen. but i hope before we go to the floor that we can try to reconcile why crs comes up with a different number than opm does. >> thanks, senator collins. >> just -- i'm sorry. >> go ahead. >> make one other point. the postmaster general told us his goal is to have the service credit in most cases not exceed the value that you would get from giving the monetary payout which is capped at 25,000, but he believes will be less in most cases. >> is that something we can work toward? is the $25,000 total compensation cap or total payout or not or however you want to call it? i think you're referring to the cash payout, which could be

quite higher, correct? >> depends. >> i'm sorry, i have been looking at another amendment. let me jump if i can, senator johnson. are you saying the cash payments, the bonus payments and the credited service neither of those should be in excess of worth more than $25,000? >> well, again -- >> under the bill, you can only get one. you have to decide whether your employees, whether they take the cash payment or the accredited services. i think the legislation is clear you can't have both. >> that's not the information i have. so i mean obviously i feel better if it was capped at $25,000 so we have to research that. >> okay. >> you know, senator johnson, i think we should continue to work on this as we go to the floor. because we did limit, but you're right, we limited the service credit to one year of credit, as

you know if you're in the csrs retirement service and two years under the fers system. but the question of the monetary limit is an important question. i pledge to you that we'll continue to work on it, because there was a general understanding that this was an either/or and that the net financial effect would be the same. that is we'd be limited within the $25,000. if not we should be, you know, open about that. and make a judgment that it's worth it or that it's not. so i leave it to you whether you want to go forward with the vote in any case. but i think you've raised a good point. >> if you're willing to work with me before this comes on the floor, that's fine. >> yeah. >> let's leave the issue open. >> good. >> we'll just work toward making sure we have a cap. >> fine, i appreciate that. to state the obvious, if we don't reach an agreement, you're

free to introduce this amendment on the floor. >> okay, thank you, mr. chairman. let's see, senator pryor was actually next. he's left, so we'll go to senator begich. >> mr. chairman, if i could ask a couple questions. on -- i have two amendments. i'll determine if i'm going to offer them based on some comments. first, i don't know who can answer this, if it's senator collins, senator carper. first -- yeah, today they're not that -- it's on. how's that? i'll lean as far as i can. first on amendment two, which is the issue of comparable compensation, and i guess i want a little discussion from both -- whoever, on how when an arbitrator deals with some of the wage issues and they want to

look at compensation, who are they comparing to? let me give you the precursor. because the issue for me, and i can only speak as a former mayor who had to negotiate contracts and then somebody on the other side legislator, who wrote the labor law for the city of anchorage. i have been on both sides. here's what can happen with a large organization. administrators take studies that are developed on a mass scale which have a sizable amount of small businesses which then they try to compare to employers of this magnitude which is very problematic. or they take industries of nonlike industries and compare them. so help me understand what the thought process was behind of how when they prepare for compensation, what's the thinking that was behind it? because i have seen it on both ends. when i was on the management end, we made sure we compared like to like.

as best we could. this has a limited area. we did not include small businesses because they're not the same compensation packages when you go through the arbitration. i don't know who wants to answer that. does my question makes sense? >> no. next question. >> well, in that case i move amendment number two. >> no, here's the way i'll answer that question. currently, with respect to comparability of pay, you have an arbitrator. you've got folks there for labor and management and folks from labor may say we think the pay should be comparable to pay for fire, for police, for first responders. maybe for folks in the construction industry. and folks in the management side can agree or they can say, well,

not really. maybe we think it's more on the retail side, folks are doing like selling stamps and that sort of thing. there may be an argument as to whether or not their work is comparable to the folks who work for u.p.s. or fedex. at the end of the day, the arbitrator decides given all the input from both camps and makes a decision, i presume, this is just me thinking out loud, but i presume there's a -- some kind of case history, case law history and of course they have that sort of thing. there may be some case history that builds up over time with respect to comparability. i think that's the way i'm told that it works. >> senator begich? >> mr. chairman, part of my conversations i want to build the record here because i may withdraw it here. but number one, i want to build if that's okay. i can dispense with both of these potentially. >> no problem. go right ahead. >> i won't offer number two because i want to make sure that

we're clear that the process you just kind of laid out how it will develop over time, but also we had to be very careful when we are in the process that management doesn't pick. i was, again, an assembly member who dealt with a mayor who picked small business who paid no benefits and everything and said this is what the private sector plays which is really totally irresponsible in trying to build pay packages, and that's not what i see in the building of this. so i want to put that in the record. amendment number one, this is my struggle with this one. it is very broad the way it is written in the current bill. but let me read you something and then maybe a response from both. in the municipal law that we drafted, because there's two ways, you can do it prescriptive and list all the things that the fact finder should look at, or leave it broad and hope they recognize the other things. i'm going to read you -- this is how we did it in the city and

had various long term success. the fact finder shall have the determine to relevant facts including but not limited to work load, productivity, cost of living, the parties bargaining history, relevant market comparisons and relevant market comparisons in the private sector and workplace morale. to you -- to the drafters of this, do you see that as a piece of how you see this broader discussion of how an arbitrator reviews the items that are part of the process of determining the outcome of wages and benefits? >> can i ask you what you're reading from then? >> what i read was what we did in municipal court in our labor law. because when it went to arbitration the big debate is always what's included, what's not included? what we want to do is be somewhat prescriptive, but not

so hamstrung that they only have to look at thand these issues. i want to make sure it's broad, so the arbitrator can and i can of select, but what i'm asking for is the drafters of the legislation, are these the kind of things that you envision not limited to, that the arbitrator would utilize in the determination of wages and benefits? the reason i'm asking that, is that the thought process behind the ladies and gentlemnguage, i sure it's on the record. i will tell you i had to negotiate during my time nine different union contracts when i was on the assembly we dealt with over a ten-year spread probably 20 different union contracts. the guiding force of how the arbitrator -- probably half went to arbitration because when we were on the assembly we didn't have such a compromising mayor. not me, another one.

so does that question make -- i just want to know -- the genesis behind the language. >> >> i may take a swipe at that one. if we go back to 40, 41 years when your predecessor was involved in the creation of the postal service, one of the reasons we recall the postal service was created was because the wage benefit treatment of the folks -- the predecessor in the old post office, it wasn't a good situation. the wages were lousy. the benefits were lousy. and there was, you know -- actually had as i recall periods of time people wouldn't work. people would call in sick all kinds of stuff. it was not a good situation. so we decided to move from the old system to a postal service which was designed to professionalize it and pay people decent wages and benefits. one of the laws of our land says we can't go back. we're not going to go back to the way it was prior to 1970.

the other things coming, looking at the language that is before us in the bill today on arbitration, it says we expect whoever the arbitrator is in a day and age when we have a $15 billion line of credit is all fully used up by the postal service and we're looking at another $200 billion of debt if we don't straighten it out that the arbitrator needs to consider the financial condition of the postal service. we also say -- >> but not limited to -- >> no, no. that's just one. they also have to consider the type of stuff we're talking about. the comparability. is the right comparability, is it what retail people are paid? and both sides have the chances to offer the arbitrator their best argument and the arbitrator decides on case by case basis. the third thing we do is title 39 is pretty broadly laid out.

basically say here that not only is the financial condition of the postal service part and parse of this decision-making process in arbitration, but the wage, the comparability wage situation is on the title. and title 39, as broad as it is open as well. that's a lot. this is not a constraint. >> if i can just briefly respond, senator begich. it's a good question. so the language in our proposal, we went over a fair amount. and before i read it, i'll say that my understanding is or my intention certainly is that it broadens the authority of the arbitrator to consider a wide array of factors that are relevant to the arbitration. and then we cite three as an example. this is the way i read it, the three that senator carper

mentioned, financial condition of the postal service, pay comparability and everything in title 39 of the u.s. code which relates to the postal service. it is different from your amendment though. i understand what you were getting at. your amendment, if i read it correctly, and i quote, nothing in this title may be construed to limit the factors the arbitration board may take into account in rendering a decision. to me, that says they can go beyond relevant factors. so the wording of our proposal here is, i quote, in rendering a decision, the arbitration board shall consider such relevant factors as -- and then it mentions the three. but it's not limited to those three. it's such relevant factors. and the difference between the language in the substitute before the committee and your amendment is the word "relevant." that factors have to be relevant to the arbitration.

senator collins -- or senator begich, go ahead. >> were you? >> no. i just want to make sure. let me give you a scenario to make sure again. let's assume they're at a point where they're financially in a hard position, worse than they are today. a contract goes through negotiations, neither side can agree. it goes to arbitration. arbitrator says they deserve these pay adjustments upward. and, yes, the post office may not have the full resources. does your language say that takes precedent over the other component which is the compensation end? do you follow me? >> in other words, what can happen is like today, if an arbitrator looked at it and said that is the predominant decision

on the financial condition versus the compensation of the employee, now you have significant conflict. and if it's driven by this, i can tell you what can happen. i've seen it. people will drive this number however they want in order to win over here. and what i want to make sure is there's some equity in recognizing -- forces management to manage not just put it on the backs of employees. say we're all in a pile of junk here and you're going to pay for it. you follow where i'm going here? >> i do. i'll start briefly. my understanding is that those three items that we cite as relevant factors are not exclusive. >> they're not limiting. >> yes. right. they're not all -- it's any relevant factors. second is one does not preempt the other. in other words, we mentioned financial condition of the postal service as one. we want to make clear that we believe that's something the arbitration board should consider. in fact, the postmaster has said

to us in his understanding, the arbitrators are already considering the fiscal condition of the postal service. >> right. >> in their arbitrations, but that it's a good thing to state it. but i certainly don't intend that to be more important than the other two examples given. that is a personal expression of what my intentions are. >> senator collins? >> senator, the original bill that i had introduced only had financial status of the postal service. so, to address concerns that you unions raised, we made clear that comparability was also a standard. that's important because there both sides of that issue, of the comparability issue. so now that it's in law, it's

clear. and then senator carper, i believe it was, wanted to also make ioa that any issues in the entire title 39 that are relevant could also be considered. so, compared to where i started out, this is, broader and represents a considerable compromise. and, because it clarifies conflicting findings in previous arbitrations, i think it does accomplish some of the goals that you've outlined. >> mr. chairman? >> yes, senator levin? >> i think i see what senator begich is driving at and can be clarified, i think, by putting into this language what you, mr. chairman, just said. which is it's not limited to these relevant factors. any relevant factor could be

considered. and that could be easily inserted by saying if we have this language, in rendering a the arbitration board shall consider any relevant factor including these three. i think that's what you said. and i think that would address senator begich's point. and i think, from what senator collins said, i'm not quite as sure in terms of making this statement as i am about saying that what i'm proposing would reflect what the chairman said. because i know senator collins -- >> i apologize. >> no, no. this is technical stuff, and i'm sorry. in rendering a decision under this paragraph -- this is the bill is -- the arbitration board shall consider and the way it's worded, such relevant factors as. and what i think senator begich is driving at and what i think the chairman said is intended is to simply say shall consider any

relevant factor including those three. >> we're back to the debate on including. >> right. >> that we had during the department of -- preauthorization. >> it's reminiscent. i think this is what senator begich is driving at. let me put it this way. are there any other relevant factors as the chairman said beyond these three? if so, they ought to be considered, subject -- >> i don't think of any. and the third, the reference to all of title 39 is quite broad. but the reason -- we put the word relevant in so i presume a normal arbitrator wouldn't go far afield, but you wouldn't -- >> the other way to cure it is if senator begich were willing to simply put the word relevant in front of the word