USPS has welcomed proposed legislation from senior Democrat, Republican and independent Senatorsthat promises to save the US Postal Service from bankruptcy.
The bipartisan group of senators, led by Homeland Security and Governmental Affairs Committeechairman Joe Lieberman, announced yesterday that they had reached agreement on a “compromiseproposal to save the USPS from financial disaster and put it on the road toward financialstability”, before introducing the 21st Century Postal Service Bill to Congress.
Lieberman and fellow senators, including Subcommittee on Federal Financial Management chairmanTom Carper, hope to get the legislation passed by the end of this year. It will be marked up fordiscussion in the Homeland Security and Governmental Affairs Committee next week.
Key proposals include instructing the US Office of Personnel Management (OPM) to refund USPS fora US$6.9 billion overpayment to the Federal Employees Retirement System, with USPS then using thismoney to support ‘buyout’ compensation payments to employees. The Postmaster General estimates hecan reduce the Postal Service workforce by as many as 100,000 of its current 550,000 employees overthe next three years in order to reach savings of $8 billion a year.
It would also allow the Postal Service to work with its employee unions and the OPM to develop anew health plan to cover postal employees. The Postmaster General estimates that a new healthcareplan could cut costs roughly in half, while maintaining adequate benefits. The company’s expensivepre-funding requirements for its retiree health benefits would also be changed so that thosepayments are spread over time.
Another key proposal is to delay USPS from reducing from six-day-a-week to five-day-a-week maildelivery for at least two years “and until it develops remedies for customers who may be affecteddisproportionately by the change in service”.
Lieberman acknowledged that this was a controversial area, adding: “The Postal Service has beenpushing to reduce the number of days it delivers mail each week from six to five. USPS believesthis will achieve $3 billion in savings.
“We are mindful of these concerns, so our legislation would bar the Postal Service from movingto five-day delivery until two years after enactment of our bill and, in the meantime, reduce costsin other ways. The Government Accountability Office (GAO) would have to verify that sufficientsavings cannot be achieved without going to five-day delivery.”
The bill would also allow the Postal Service to offer non-postal products or services if thePostal Regulatory Commission (PRC) has determined that the products and services: 1) make use ofUSPS’s processing, transportation, delivery, retail network, or technology; 2) are consistent withthe public interest and a demonstrated demand for the Postal Service to offer them; 3) do notcreate unfair competition with the private sector; and 4) have the potential to improve the PostalService’s financial condition. It would also allow the Postal Service to ship wine and beer, as itsprivate-sector competitors do.
USPS thanked the senators “for introducing new bipartisan legislation to address critical PostalService issues”, adding: “We look forward to working with them and other members of the Senate’sHomeland Security and Government Affairs Committee as this bill makes its way through thelegislative process. We are currently reviewing the provisions included in the bill to determinehow it addresses our financial crisis and the need for a more flexible business model.
“The Postal Service continues to take aggressive actions under our control to cut costs andincrease revenue to return to profitability and urgently needs passage of comprehensive, long-termlegislation to get us there.”
Myke Reid, legislative and political director for the American Postal Workers’ Union, said theunion was analysing the legislation, which it said combined features of earlier legislationsponsored by Senator Carper and Senator Susan Collins, another sponsor of this current Bill.
Collins said: “The Postal Service literally won’t survive without legislative and administrativereforms. Absent action, it won’t be able to meet its payroll a year from now. ThePostal Service is vital to our economy, yet is on the verge of collapse. It is in imminentfinancial danger.”
She described the USPS as “the linchpin of a $1.1 trillion mailing and mail-related industrythat employs approximately 8.7 million Americans in fields as diverse as direct mail, printing,catalog companies, and paper manufacturing”.
She added: “We are asking the Postal Service to make painful choices about internal costs andnot simply slash services and raise prices which would only add to its death spiral. Thisbipartisan legislation gives the Postal Service the authority it needs to restructure, modernise,survive, and thrive.”
Lieberman said: “The financial health of the USPS has been deteriorating for years. But therapid changeover to electronic communications and the recent economic downturn have swept it upinto a financial death spiral. In this Fiscal Year, 2011, the Postal Service first projected atotal loss of $8 billion. That was in July. By September, it revised its estimate and now says itwill lose $10 billion.
“Unless major reform is adopted, the Postal Service will run out of money to deliver the mailsometime next summer. That is why we are introducing this comprehensive legislation to put a numberof cost saving measures in place.”
