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Jewish World Review March 12, 2001 / 17 Adar, 5761

Richard Powelson

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Consumer Reports

Postal Service, short of money, pays big bonuses -- The financially troubled U.S. Postal Service awarded $280 million in bonuses to managers for their units' meeting performance goals last year even though that move and others resulted in $199 million in net losses.

Two U.S. senators, Fred Thompson, R-Tenn., chairman of the Governmental Affairs Committee, and Jeff Sessions, R-Ala., questioned the large amount of the bonuses when the agency was projecting large losses for both 2000 and 2001.

Also, the agency's inspector general has been reviewing "the reasonableness" of

the performance bonus program for about 80,000 managers, which is in addition to merit raises that they may receive.

Postal Service spokesman Greg Frye said the extra compensation paid under the Economic Value Added Variable Pay Program was offered to managers at the first of the year if they met various performance goals, so the bonuses could not be cancelled when the budget ran into the red.

"There would probably be lawsuits if it were not approved," he said.

Thompson said: "The Postal Service management needs a reality check. Paying large bonuses at a time when they're planning on seeking new rate increases and projecting $2 billion to $3 billion in losses for the (2001) fiscal year defies logic."

Sessions has directed his staff this year to spotlight unwise federal spending.

"They are asking for a rate increase. Had they not paid the bonuses they would have made a profit" last year, Sessions said in an interview. "You wonder sometimes if they are keeping profits low or remaining in deficit to justify a rate increase."

Frye said Postal executives, while also eligible for merit raises, do not get extra compensation called "locality pay," which many federal employees receive for working in high-cost areas. The extra, variable compensation program was started in 1996 under Postmaster General Marvin Runyon.

The agency, which has 900,000 employees, has a budget this year of $67 billion. Non-managers declined to participate in the variable pay program, Frye said.

Managers' bonuses ranged from zero for those whose units did not meet performance goals, up to 15 percent. Frye said he did not know how many managers' units failed to meet their goals.

Under program rules, managers can withdraw exactly one-third of a year's bonus that year and the rest in equal payments the next two years.

Just two months ago, Sessions found that postal managers had improperly used chauffeurs and official vehicles more than 520 times over four years, including taking spouses on errands and having cakes and packages transported home.

"Leaders have got to set a good example, particularly when times are tough," Sessions said. "So you cannot create a perception that the top officials are ... being driven by chauffeurs and getting large bonuses."

Karen Hucks writes for the Tacoma News Tribune. Comment by clicking here.


© 2001, SHNS