Carper Introduces Postal Reform Legislation

WASHINGTON, DC – Looking to stabilize mailing rates while maintaining a commitment to universal service, Sen. Tom Carper, D-DE, today introduced legislation that would modernize the U.S. Postal Service for the 21st century. The legislation, the Postal Accountability and Enhancement Act of 2003, would force the Postal Service to concentrate solely on what it does best – processing and delivering mail to all Americans. It would begin the process of developing a modern rate system for pricing Postal Service products, while also creating a strong regulatory body to ensure that the Postal Service competes fairly with other national mail carriers. The bill further aims to strengthen existing service standards for the Postal Service”s many products. “My bill does not attempt to reform the Postal Service by rolling back universal service or taking pay, benefits or collective-bargaining rights away from employees,” said Carper. “The bill gives the Postal Service the flexibility it needs to compete in the 21st century.” The Postal Service is in a period of transition. When it was created in 1971, nobody had access to fax machines, cell phones and pagers and nobody imagined the convenience of email and other electronic services. After nearly three decades of success, these new inventions have caught up with the agency. By 2002, mail volume was falling and revenues were poor. To help scale back mounting debt, the Postal Service has been forced to raise rates three times in less than two years. Thanks to various cost-cutting measures, the agency’s financial outlook has improved, but there is only so much the Postal Service can do its own. The Carper legislation would seek to strengthen the Postal Service’s standing and long-term viability by:

Preserving Universal Service, While Protecting Employees: The bill maintains the current requirement that the Postal Service continue delivering to every address in the country in a non-discriminatory way. The bill also preserves employee collective-bargaining rights. Creating a Strong Regulator: The bill would rename the Postal Rate Commission the Postal Regulatory Commission, strengthen qualifications for Commission members and give the Commission the authority to create a new system of rates and service standards for most of the Postal Service’s products. The Commission could also subpoena Postal Service employees and records and punish or fine the Postal Service for violating any rate or service regulation it issues. Creating a Modern Rate System: The bill requires that the Postal Regulatory Commission in two years create a new system for pricing and classifying the Postal Service’s Market Dominant products, such as First Class Mail and others that are part of the postal monopoly. The new system should give the agency more pricing flexibility, allowing them to use rates to encourage safer, sender-identified and easily traceable mail and to encourage people to mail during non-peak periods. The Postal Regulatory Commission could also institute emergency price increases during certain times, such as a national fuel crisis, that threaten the agency’s ability to fulfill its universal service mandate. In addition, the bill requires mailers, the Postal Service and the Commission to agree to a schedule of rate increases over a period of time to make them more predictable and less frequent. Most importantly, the bill authorizes the Postal Service to negotiate with mailers service agreements aimed at increasing volume and better tailoring services to mailer needs. Establishing Modern Service Standards: The bill authorizes the Commission to create within two years a set of service standards for its Market Dominant products. The bill also requires the Postal Service to realign its operations in order to meet those new service standards. This could include closing or consolidating some facilities no longer needed to meet the new standards. Ensuring Fair Competition: The bill would ensure that the Postal Service competes fairly with companies like the United Parcel Service and FedEx by preventing the agency from using revenue from its monopoly products, such as First Class Mail, to underwrite expenses for its competitive products, like Priority Mail. The Postal Service is also prohibited from issuing regulations that would give the agency an unfair advantage over private sector companies, and the agency would have to pay an assumed federal income tax on products that private firms also offer.

The legislation is being introduced just about a month before the President’s Commission on the United States Postal Service is set to issue its recommendations for postal reform. Senator Carper said he hopes the legislation would help guide the Commission as it completes its work. “I commend President Bush for his leadership in putting the Commission together,” said Carper. “I urge those on the Commission to take careful consideration of the work Congress has done on postal reform over the past decade, including the bill I am introducing today. I hope they can look to the Postal Accountability and Enhancement Act as a touchstone as they complete their work.” The Carper legislation is based on a bill introduced last year in the House by Congressman John McHugh (R-N.Y.) that enjoyed the support of most of the mailing community and nearly all organization representing Postal Service employees. The Postal Service’s Board of Governors also endorsed it. “I applaud Senator Carper for his efforts on postal reform,” said Bill Young, President of the National Association of Letter Carriers. “Ensuring that the Postal Service has the flexibility to thrive in the 21st century is of vital importance to my members and the public we serve. Senator Carper’s bill is an important step in that it aims to improve service nationwide and preserves the protections and benefits letter carriers depend on. We look forward to working with Senator Carper to get comprehensive postal reform legislation passed into law.” “The issue of postal reform is critical to the country, magazine readers and the entire mailing industry,” said Ann Moore, chairman and CEO of Time, Inc. “Senator Carper’s bill provides the Postal Service with much-needed flexibility that allows it to operate in a more business-like manner, which is important to any reform bill. We appreciate his leadership, and we look forward to continuing to work with him and [Governmental Affairs Chairwoman] Susan Collins.” Last month, the president signed into law another bill sponsored by Sen. Carper that would keep postal rates flat until at least 2006. That legislation, which Carper co-authored with Senator Susan Collins, R-ME, corrects a funding mechanism problem that could have caused the U.S. Postal Service to over-fund its contributions to the Civil Service Retirement Fund by $78 billion.”