Will Bipartisan Senate Bill Save The U.S. Postal Service?

Nov 02, 2011 11:55 PM  By

A bipartisan Senate bill titled, “21st Century Postal Service Act of 2011,” was unveiled today and would make massive changes aimed at revitalizing the U.S. Postal Service’s woeful financial status and postponing implementation of 5-day mail delivery at least two years.

Hamilton Davison, executive director of the American Catalog Mailers Association, says the bill appears to contain all the major elements necessary to allow the USPS to complete its restructuring and meet its obligations, while removing the surplus capacity that is neither needed nor cost affordable.

“The Senate is to be commended for taking on the hard issues and coming up with creative solutions that can earn widespread support from a majority of postal stakeholders,” Davison says. “The issues are complex, deep and immediate. This is real progress to fix a basic part of
our nationʼs economic infrastructure that remains essential for the economy.”

Davison says the legislation can help avoid massive dislocation of jobs, disruptive inconveniences for American consumers and significant reductions in the diversity of products available in the market. “We hope all mailers will rally behind this initiative so it can be passed quickly into law.”

Sens. Joseph I. Lieberman (I-Conn.), Susan Collins (R-Maine), Thomas Carper (D-Del.) and Scott Brown (R-Mass.) announced the specifics of the bill that the group hopes will “pull the USPS from the brink of financial failure.”

Carper, chairman of the Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security, which oversees the USPS, said most Americans realize the USPS is “on the verge of financial collapse.”

More on the USPS and 5-Day-Delivery:
5-Day Delivery Bill Not Likely to Pass This Year
USPS Network Optimization Plan For Everyone?
House Panel Approves Bill For Five-Day Postal Delivery
5 Day Delivery FAQs

“If we do nothing, we face a future without the valuable services the Postal Service provides,” he said. “And if the Postal Service were to shut down, the impact on our economy would be dramatic.”

The bill would prohibit the Postal Service from implementing its plan to eliminate Saturday delivery for at least two years. What’s more, the implementation could only move forward if the following conditions are met:

1) The USPS identifies customers who may be affected disproportionately by 5-day delivery and develops remedies;

2) The USPS makes full use of its authorities under current law and the new authorities and mandates included in this bill to increase revenue and reduce costs; and

3) After implementing all other savings options, the USPS determines that a five-day schedule is still necessary to achieve sustainability. Once that decision is made, and demonstrated through careful financial analysis, the Government Accountability Office (GAO) would review the Postal Service’s financial situation, projections, and the adequacy of the savings initiatives already implemented in order to determine whether the implementation of five-day delivery is financially necessary. The Postal Service would not be able to implement a five-day schedule unless the Postal Regulatory Commission (PRC) has found that the Comptroller General has made a determination that doing so is financially necessary.

The bill would give the Postmaster General access to the money the USPS has overpaid into one of its pension funds (FERS) and use it to offer buyouts or retirement incentives to reduce the active postal workforce by 100,000 or more employees over the next several years.

Any funds remaining after the Postal Service has completed this incentive program may be used to repay debt and meet obligations related to workers’ compensation, pensions, and retiree health. USPS has estimated that reducing its workforce by 100,000 would save up to $8 billion annually.

Health Care Savings: The bill would immediately begin a 40-year amortized payment schedule for the Postal Service to fund retirees’ health benefits. It would also reduce the pre-fund goal to 80%. The bill also allows the amount of these payments to be reduced if the Postmaster General and postal union representatives are able to reach consensus on a health plan that significantly reduces this liability. The Postal Service and its unions would have until September 2012 to negotiate a separate USPS health insurance plan.

Streamlining Delivery: The bill would authorize the Postal Service, where feasible, to deliver to curbside, sidewalk, or centralized mailboxes rather than to door delivery points no later than 2015. This change could save the Postal Service billions every year.

Retail service standards: The bill would require the Postal Service to develop service standards to guarantee customers a certain level of access to retail services, whether at a post office or an alternative to a post office. The Postal Service must develop the standard, in consultation with the PRC, based on factors such as geography, population, and the availability of transportation.

Processing Facilities: The bill would require the Postal Service to complete a study prior to the closure of a processing facility.

The study must evaluate the option of downsizing rather than closing the facility. The bill would also establish a rigorous public comment opportunity and require a response to those comments from the Postal Service as well as documentation that important factors have been considered prior to closure.

New Products and Services: The bill would allow the Postal Service to offer non-postal products or services if the PRC has determined that the products and services: 1) make use of USPS’s processing, transportation, delivery, retail network, or technology; 2) are consistent with the public interest and a demonstrated demand for the Postal Service to offer them; 3) do not create unfair competition with the private sector; and 4) have the potential to improve the Postal Service’s financial condition. The bill would also allow the Postal Service to offer services on behalf of state and local governments as it does today on behalf of federal agencies and to ship wine and beer like its private-sector competitors do.