Postal Reform Substitute Unveiled in Anticipation of Tuesday Floor Debate

WASHINGTON – The lead sponsors of a reasonable and bipartisan postal reform bill unveiled a new draft Tuesday that incorporates changes suggested by fellow Senators, particularly regarding post office and processing plant closures and overnight delivery standards.

Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, ID-Conn., Ranking Member Susan Collins, R-Maine, Federal Financial Management Subcommittee Chairman Tom Carper, D-Del., and FFM Subcommittee Ranking Member Scott Brown, R-Mass., introduced the substitute amendment to the 21st Century Postal Service Act (S.1789) the day Senate debate on the bill was expected to begin. The substitute requires USPS to continue to provide overnight delivery for local first class mail, albeit across shorter distances than may be the case now. The Postal Service would still deliver first class mail anywhere in the continental United States in a maximum of three days. It also expands the alternatives USPS must consider before closing a post office. In addition, the substitute would encourage the Postal Service to think innovatively about how to adapt its business model in a world increasingly reliant on electronic communications. The revised bill requires appointment of a Chief Innovation Officer and establishes a Strategic Advisory Commission, to be composed of prominent citizens and charged with developing a new strategic blueprint for the Postal Service.

Carper said: “The financial situation facing the U.S. Postal Service is dire, but it is not hopeless. The time to act is now, and this legislation will provide the Postal Service with much needed flexibility so it can right-size, modernize, and remain competitive for decades to come. The manager’s amendment offered today addresses the concerns raised by many of my Senate colleagues in a responsible manner. It ensures that the Postal Service will receive the resources it needs to survive, while providing communities and stakeholders with transparency as well as opportunities to participate in strengthening the Postal Service. I look forward to working with my colleagues to address the challenges facing the Postal Service as we consider this comprehensive, bipartisan postal reform legislation. We can solve this problem if we work together and remain committed to preserving this invaluable American institution for generations to come.”

Lieberman said: “The substitute amendment we offered today is a reasonable and balanced approach to the Postal Service’s deep financial problems. Our proposal includes steps to remove some of the immediate financial pressure on the Postal Service; encouragement of long-term innovative thinking; and measures to reduce excess capacity while avoiding extreme changes that could further destabilize USPS. Where cuts and consolidation are proposed, S. 1789 requires that other options be considered beforehand and that USPS’s decisions are based on sound planning with adequate transparency and public input. We believe this approach offers the best hope for stabilizing the Postal Service and putting it on solid footing long-term, without dramatic and perhaps self-defeating cutbacks in service.”

Collins said: “Sharing the important goal of saving the Postal Service, Senator Lieberman, Senator Scott Brown, Senator Carper, and I consulted extensively with postal customers, both business and residential, postal workers, the Postmaster General, the GAO, the Administration, and local communities deeply committed to preserving their postal facilities. The substitute we introduce today provides the right tools to the Postal Service, with the right checks and balances to set it back on course. The premise of our bill is that the Postal Service will not survive by offering customers less and charging more. I cannot think of another business in financial trouble that would risk alienating its remaining customers by raising prices and slashing service.”

Brown said: “With this substitute, a bipartisan group of Senators has put forward a comprehensive reform plan that preserves the solvency of the U.S. Postal Service and ensures its long term survival. I look forward to working with my colleagues on a bipartisan basis to get it enacted into law.”

The financial condition of the Postal Service has been deteriorating for years but the economic downturn and the near universal use of the internet for communications have hastened its downward spiral.

To help USPS cut costs and raise revenues, the bill would:

  • Give the Postmaster General access to money USPS has overpaid into one of its retirement funds to provide incentives to encourage 100,000 eligible employees to retire. This would help voluntarily “right-size” the workforce to take into account the steep decline in first class mail volume in recent years;
  • Reduce the amount of money that USPS has to prefund for retiree health benefits by amortizing the costs over 40 years and calculating those costs more appropriately.
  • Retain overnight delivery of first class mail, but limit it in some cases to shorter geographic distances.
  • Prevent the Postal Service from going to five-day delivery for the next two years and require it to exhaust all other cost-saving measures first;
  • Require USPS to set standards for retail service across the country, consider several alternative options before closing post offices, and provide for increased opportunity for public input;
  • Allow USPS to deliver mail to curbside, sidewalk, or centralized mailboxes, rather than front door mail slots or boxes;
  • Allow USPS to sell non-postal products and services in appropriate cases;
  • Allow USPS to ship beer, wine, and distilled spirits.
  • Establish a Strategic Advisory Commission on Postal Solvency and Innovation to examine costs and revenues, look at alternative business models, and develop a strategic blueprint for the Postal Service
  • Create a Chief Innovation Officer to foster innovation at USPS
  • Reform the Federal Employees Compensation Act, the federal workers’ compensation program.

In Fiscal Year 2011, the Postal Service lost $5 billion on top of its current debt of $10 billion – and its annual loss would have been twice that had Congress not delayed a payment for future retiree health benefits that was due. Congress has extended short-term emergency assistance to the Postal Service twice in the last two years. But without serious, long term reform, this iconic American institution – enshrined in our Constitution – will take on more and more debt.

The Postmaster General has said USPS may run out of money this fall. The Postal Service may be forced to slash services and employees indiscriminately if Congress fails to pass reform legislation.