Dec 11 2011
By Sens. Tom Carper, Joe Lieberman, Susan Collins, and Scott Brown
In homes across America sit thousands of letters, cards and notes from generations past. These missives tell our collective history. They give us a glimpse of the thoughts, joys and fears of our parents, grandparents and ancestors — whether it’s a love letter from a World War II soldier to his bride or an account of a journey to settle new land on the American frontier.
Today, we still reach out to our friends, families and colleagues. But instead of mailing letters and cards, we can Skype, email, tweet and post on Facebook. Welcome to the 21st century. We’re communicating with each other more than ever — but using keyboards and smartphones rather than pen and paper.
The rapid exodus from traditional mail to electronic communication has come at an enormous cost to the U.S. Postal Service. The loss of so much hard-copy mail, high labor costs and retirement obligations, as well as the continued requirement to hand deliver mail to every address in the nation pose significant financial burdens for the Postal Service. These challenges have been exacerbated by the worst recession in decades — bringing the organization to the brink of financial collapse.
Despite the use of new communication technologies, a collapse of the Postal Service would devastate our economy. It operates at the center of a mailing industry that employs more than 8.5 million people and generates almost $1 trillion in economic activity every year. Everyone — from big retailers to small businesses to online shops — relies on the Postal Service to deliver packages, advertise services and send out bills. Take that away, and businesses and consumers would suffer.
The situation is dire but not hopeless. With the right tools and action from Congress and the Obama administration, the Postal Service can reform, right-size and modernize.
So, how do we update the Postal Service’s business model — successful for more than 200 years but less so for the past 10 — to reflect the changing demands of this century? By helping the Postal Service do three things: reduce operating costs, modernize its business model and innovate to generate new revenue.
On Nov. 2, we announced a bipartisan solution to reform and modernize the Postal Service — the 21st Century Postal Service Act. One week later, the Senate Homeland Security and Governmental Affairs Committee, of which we are members, approved this legislation to help put the Postal Service on a sustainable financial path.
Our bill would fundamentally reform the Postal Service in several ways.
Reduce operating costs: When the Postal Service underpays its pension costs each year, the federal government’s pension system bills the Postal Service for the difference. But when it overpays, the federal government just keeps the cash. The Postal Service has now overpaid its pension obligations to the Federal Employee Retirement System by about $11 billion. Our bill would return the nearly $11 billion to the Postal Service and direct the postmaster general to use some of it for retirement and separation incentives.
Nearly 150,000 postal workers are at or near retirement. Our goal is to encourage roughly 100,000 of them to retire. The Postal Service estimates this would save about $8 billion a year.
In addition, our bill would help save the Postal Service, and the federal government, money by reforming the federal workers’ compensation program — of which 40 percent of all claimants are postal workers — in a humane manner. It would bring federal benefits in line with compensation levels offered under most states’ laws and encourage more employees who are able to work to shift back to the workforce.
Modernize: The Postal Service needs to right-size its operations to reflect the changes in demand for its products and services. It needs to make smart cuts to its extensive retail sites, processing plants and administrative bureaucracy. These changes are never easy. Our bill would help the Postal Service consider the right factors, minimize the pain and maximize public input to complete necessary, but responsible, downsizing in its network of facilities.
Increase revenue: We also need to give the Postal Service tools to offer new products and services — such as shipping beer and wine, as competitors FedEx and UPS do. This also would let the Postal Service turn a perceived liability — a nationwide retail, transportation and delivery network — into an asset that can bring in new revenue.
We are not crying “wolf.” If nothing is done, the Postal Service will not be able to make payroll next summer — stopping mail delivery in its tracks and wreaking havoc on our already fragile economy. To prevent this, we must pass a comprehensive reform bill.
If we don’t, the Postal Service, which is enshrined in our Constitution, will fail — ending an American institution that has served us well since the beginning of our Republic.