Senator McCain's Postal Executive Pay Amendment Explained

In offering Amendment 252 to S. 493, the bill reauthorizing a number of Small Business Administration programs, Senator McCain proposes lower limits on compensation of postal employees.   The amendment removes a section from current law and appears to add a new section but does not identify a section number for the new language.

Senator McCain's amendment changes the limit on the salary paid to the Postmaster General from $276,840 to $230.700. It may affect compensation packages of other senior officers.  It ties the change to the Postal Service's payment of its obligations to the United States Treasury.   The restrictions do not exist if the obligations are to private sector lenders.  This would assume that the Postal Service can issue debt instruments to private sector lenders and private sector lenders would be willing to hold such debt.

The changes in this amendments create a consequence for the Postmaster General as long as the Postal Service has 1) not paid off its debt in full and 2) has unpaid obligations to the United States Treasuries for retiree benefits or workers compensation.   It is not clear if the language would remove these consequences if the Postal Service was current on its retiree health care and workers compensation payments but had yet to make its required payment. 

Legislative Language

Changes to U.S. Code Title 39 Section 3686 (as it now exists with proposed changes)

(a) In General.— The Postal Service may establish 1 or more programs to provide bonuses or other rewards to officers and employees of the Postal Service in senior executive or equivalent positions to achieve the objectives of this chapter.


(b) Limitation on Total Compensation.— (1) In general.— Under any such program, the Postal Service may award a bonus or other reward in excess of the limitation set forth in the last sentence of section 1003 (a), if such program has been approved under paragraph (2). Any such award or bonus may not cause the total compensation of such officer or employee to exceed the total annual compensation payable to the Vice President under section 104 of title 3 as of the end of the calendar year in which the bonus or award is paid.

(2) Approval process.— If the Postal Service wishes to have the authority, under any program described in subsection (a), to award bonuses or other rewards in excess of the limitation set forth in the last sentence of section 1003 (a)—

(A) the Postal Service shall make an appropriate request to the Board of Governors of the Postal Service in such form and manner as the Board requires; and

(B) the Board of Governors shall approve any such request if the Board certifies, for the annual appraisal period involved, that the performance appraisal system for affected officers and employees of the Postal Service (as designed and applied) makes meaningful distinctions based on relative performance.(3) Revocation authority.— If the Board of Governors of the Postal Service finds that a performance appraisal system previously approved under paragraph (2)(B) does not (as designed and applied) make meaningful distinctions based on relative performance, the Board may revoke or suspend the authority of the Postal Service to continue a program approved under paragraph (2) until such time as appropriate corrective measures have, in the judgment of the Board, been taken.


(c) Exceptions for Critical Positions.— Notwithstanding any other provision of law, the Board of Governors may allow up to 12 officers or employees of the Postal Service in critical senior executive or equivalent positions to receive total compensation in an amount not to exceed 120 percent of the total annual compensation payable to the Vice President under section 104 of title 3 as of the end of the calendar year in which such payment is received. For each exception made under this subsection, the Board shall provide written notification to the Director of the Office of Personnel Management and the Congress within 30 days after the payment is made setting forth the name of the officer or employee involved, the critical nature of his or her duties and responsibilities, and the basis for determining that such payment is warranted.

(d) (c) Information for Inclusion in Comprehensive Statement.— Included in its comprehensive statement under section 2401 (e) for any period shall be—

(1) the name of each person receiving a bonus or other payment during such period which would not have been allowable but for the provisions of subsection (b) or (c);

(2) the amount of the bonus or other payment; and

(3) the amount by which the limitation set forth in the last sentence of section 1003 (a) was exceeded as a result of such bonus or other payment.

(e) (d) Regulations.— The Board of Governors may prescribe regulations for the administration of this section.
 
New Law
 
(b) LIMITATION ON PAY --Notwithstanding any other provision of law, the total annual pay of the Postmaster General or any other officer or employee of the Postal Service may not exceed the total annual pay payable to the Vice President under section 104 of title 3, United States Code until the Postal Service has paid--
 
(1) any obligation and any borrowed money under section 2005 of title 39 of the United States Code, and
 
(2) any other debt owed to the united States Treasury