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 2010” 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 changes to revitalize its business model, enabling it to attract and keep customers. This legislation would help spark new life into the Postal Service, helping it evolve and maintain its vital role in our nation’s economy.”

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 $50 billion, as well as the $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.

Senator Collins is proposing several provisions that would enhance efficiency and reduce costs including one to lessen workforce-related costs by converting employees on 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:

American Catalog Mailers Association (click for letter of support)
Affordable Mail Alliance (click for letter of support)
Alliance of Nonprofit Mailers
Coalition for a 21st Century Postal Service
Direct Marketing Association
MPA — The Association of Magazine Media (click for letter of support)
Conde Nast Publications (click of letters of support)
National Newspaper Association (click for letter of support
PostCom (Association of Postal Commerce) (click for letter of support)