Washington, DC – Senator Susan Collins, Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, today introduced legislation to help the U.S. Postal Service (USPS) regain its financial footing as it adapts to the era of increasingly digital communications. The “U.S. Postal Service Improvements Act of 2011” would help the USPS achieve financial stability and future cost savings without undermining customer service.
“The Postal Service is at a crossroads,” said Senator Collins. “It must embrace fundamental change. The Postal Service must take actions to reduce overhead costs, curb no-bid purchasing, bring workforce benefit structure into line, and better serve customers to expand volume. My legislation would help spark new life into the Postal Service as it evolves and maintains its vital role in our nation’s economy. I am grateful for the support of so many stakeholders for my bill, and I look forward to working with them and my colleagues as the legislation progresses.”
The Postal Service is the linchpin of a $1 trillion mailing industry that employs approximately 7.5 million Americans in fields as diverse as direct mail, printing, catalog production, paper manufacturing, and financial services.
The financial state of the Postal Service is a concern due to a number of factors – some out of the control of the USPS and others a result of its own management. The recession, high operating costs, and the increased use of digital communications have challenged the Postal Service’s ability to remain financially viable. The Postal Service lost $8.5 billion during the past fiscal year. In addition, many of the recent proposals of the USPS to save money could have the effect of further driving away its customer base, the opposite of what the USPS should be doing to attract and maintain customers
Senator Collins’ bill would fix the overpayment by the Postal Service to the Civil Service Retirement System, estimated to be more than $50 billion, as well as the approximately $3 billion it has overpaid into the Federal Employees Retirement System. This legislation would direct the Office of Personnel Management to correct the methodology for calculating Postal Service obligations to these pension funds and would greatly improve USPS’s financial condition.
“The bill would set in motion a process that would definitively and equitably correct the actuarial errors, and overcome the administrative roadblocks, that have burdened the Postal Service and its customers with unfairly high pension–related costs,” said James R. Cregan of the Affordable Mail Alliance. “These provisions, if enacted, would go far toward ensuring the future viability and affordability of the national postal system upon which we all depend.”
The legislation also would improve the Postal Service’s contracting practices, and help prevent the kind of problems recently uncovered by the Postal Service Inspector General, which include contract mismanagement, ethical lapses, and financial waste.
“I am also concerned that the federal and postal workers’ compensation program has morphed into a higher-paying alternative to federal and postal retirement,” said Senator Collins. “From July 1, 2009 to June 30, 2010, the Department of Labor paid approximately $2.78 billion to employees on workers’ compensation, including about $1.1 billion to U.S. Postal Service employees. This program must be reformed.”
Senator Collins is proposing several provisions that would enhance efficiency and reduce costs including one to lessen workforce-related costs by converting employees on long-term workers’ compensation to retirement when they reach retirement age. This is a common-sense change that would significantly reduce expenses that the Postal Service cannot afford to sustain.
“I want the Postal Service to survive and thrive,” concluded Senator Collins. “This valuable and viable American institution with roots in our Constitution must be put back on steady course.”
A list of supporting organizations follows:
• Alliance of Nonprofit Mailers
• American Catalog Mailers Association
• Coalition for a 21st Century Postal Service
• Greeting Card Association
• Magazine Publishers Association (MPA)
• National League of Postmasters
• National Newspaper Association
• National Postal Policy Council
• PostCom (Association for Postal Commerce)