Recognizing that both the OPM methodology and the Postal Service proposal based on OPM’s methodology for allocating COLAs can be viewed as two extreme methodological approaches for allocating pension costs, the Postal Service subsequently submitted a new intermediate proposal. This formal proposal equitably allocates the CSRS pension costs for the pre-July 1, 1971, and post-June 30, 1971, between the Postal Service and the Post Office Department.

     The Act entitles the Postal Service to request the Board of Actuaries of the Civil Service Retirement System to review and make adjustments to OPM computations. Such a request must be accompanied by a signed report prepared by professional actuaries. The filing of such an appeal remains under consideration.

     By law, the Postal Service normally is authorized to receive three types of appropriations from the federal government. These include appropriations for public service, transitional costs, and revenue forgone. Currently, appropriations are made for revenue forgone, and they accounted for less than 0.1 percent of total revenue in 2003. During 1971, the year preceding the creation of the Postal Service through the Postal Reorganization Act, these appropriations totaled almost 25 percent of total Postal Service revenue.

     The Postal Service currently is authorized to request up to $460 million for public service costs. This is the amount authorized by statute in 1970 and is not intended to represent the present cost of providing universal service. The Postal Service has neither requested nor received any public service reimbursement since 1982. This is the equivalent of returning $9.2 billion to the United States government and taxpayers.

     The transitional cost category of reimbursement provides a means to fund costs related to the former Post Office Department (POD) and shelters current ratepayers from such costs. Workers' compensation claims

arising prior to July 1, 1971, were the last known POD cost. In the Balanced Budget Reform Act of 1997, Congress transferred responsibility for these costs to the Postal Service. Therefore, the Postal Service has not received transitional cost appropriations since 1997.

     In 2003, the Postal Service recognized a revenue forgone reimbursement of $31 million to fund free mail for the blind and for overseas voting. That reimbursement was paid shortly after the close of the year.

     Additionally, in 2002, the Postal Service received three appropriations from the federal government to help fund costs related to homeland security and emergency preparedness. Those appropriations are discussed further in Section 3.E.

     In October 2001, numerous incidents of biological terrorism targeted U.S. senators and members of the national media. Other untargeted innocent persons were also affected by the attacks. Some individuals consequently died while others were made gravely or seriously ill. Because infectious biological agents were sent by mail in these attacks, the Postal Service was directly and