Congressional leaders have long called for legislation that addresses the systemic causes of the Postal Service’s difficulties, and this compromise builds on years of bipartisan, bicameral work. Without serious, long-term reform, this iconic American institution – enshrined in our Constitution – will take on more and more debt.
In August 2013, Senator Carper joined with Senator Tom Coburn (R-Okla.) to introduced the Postal Reform Act of 2013. Since then, the two have worked with other members of Congress, the Postal Service, the Administration and stakeholders to perfect the legislation. In January 2014, a substitute amendment was introduced that made some reforms to the legislation and renamed it the Postal Reform Act of 2014.
In introducing the legislation, Chairman Carper said: "One year ago, the United States Postal Service defaulted for the first time in its history. As Businessweek put it: 'The U.S. Postal Service essentially went broke today.' The agency was – and is – facing its worst financial challenges in 200 years. Over the past year, Americans have realized the hard truth that the Postal Service is on the verge of financial collapse. If it were to shut down, the impact on our economy would be devastating. Although the situation is dire, it isn’t hopeless. With the right tools and quick action from Congress, the Postal Service can reform, right-size and modernize. The bill that Dr. Coburn and I introduced last night presents a comprehensive and bipartisan solution to the Postal Service's financial challenges that would prevent collapse, protect millions of mailing industry jobs, and enable this critical institution to serve the American public for years to come. This bill isn’t perfect and will certainly change as Dr. Coburn and I hear from colleagues and stakeholders, including postal employees and customers. But the time to act is now. It is my hope that Congress and the Obama Administration can come together to enhance this plan in order to save the Postal Service before it’s too late."
As Chairman of the Senate Homeland Security and Governmental Affairs Committee, Senator Carper -- along with the committee's ranking Republican, Senator Tom Coburn of Oklahoma -- has introduced the Postal Reform Act of 2014. The bipartisan legislation seeks to address the Postal Service’s financial challenges by helping it streamline operations and giving it new tools it can use to introduce innovative new products and generate additional revenue. It does this while preserving essential services.
In drafting the legislation to save the USPS, Senators Carper and Coburn worked to accomplish three overarching goals: 1) reduce operating costs; 2) modernize its business model; and, 3) innovate to generate new revenue. The legislation accomplishes these goals by:
Ensuring Responsible management of workforce obligations and benefitsCurrently, the amount of money the postal service is required to pay for its employees’ retirement costs is far greater than the actual costs of providing those retirement benefits. The Carper-Coburn legislation would free the Postal Service from burdensome regulations and provide it the flexibility needed to responsibly manage postal employee obligations and benefits. Click here for more information.
Right-sizing Postal Operations and Services
In recent years, USPS has been forced to undertake significant operational cuts, including reducing its workforce and scaling back on services. The Carper-Coburn legislation would slow the implementation of further cuts to allow cost saving and revenue increasing provisions in the new law to be carried out. If the financial system of the USPS does not change following the implementation of the new law, cost cutting provisions, such as additional plant closures and a reduction to five day delivery, would be considered. Click here for more information.
Providing the tools for Greater Revenue through Innovation and Rate Flexibility
Currently, USPS can not raise its rates more than the amount of the increase in the Consumer Price Index (CPI). The Carper-Coburn legislation would give the Postal Service greater flexibility in how it calculates its rates. It would also establish a short-term commission of outside experts and innovators to explore new business models for USPS, and identify ways to increase revenues and reduce costs by exploring new opportunities to generate revenue. Click here to learn more.
To this day – more than 200 years after its founding – the Postal Service remains an important part of our lives and economy. But it continues to face financial challenges that threaten its future. Only Congress can put the Postal Service back on solid financial footing and give it the tools it needs to innovate and grow. The Postal Reform Act of 2014 would fix the problems ailing the American institution and enable it to thrive for years to come.