Senate Approves Collins-Carper Amendment to Fund Postal Reform

WASHINGTON, D.C.—During debate on the Fiscal Year 2005 budget last night, the Senate approved an amendment sponsored by Senate Governmental Affairs Committee Chairman Susan Collins (R-ME) and Senator Tom Carper (D-DE) to set aside funds to enact comprehensive U.S. Postal Service reform legislation. Senators Collins and Carper plan to introduce reform legislation next month.

“Thousands of companies and the millions they employ depend on the health and future viability of the Postal Service,” said Senator Collins, whose Committee has jurisdiction over the USPS. “Without fundamental reform, the future viability of the Postal Service will be jeopardized.”

The Senators’ amendment would establish a deficit-neutral reserve fund to accommodate postal reform. Under the terms of the amendment, if the Governmental Affairs Committee reports out a postal reform bill that is fully offset, then the Budget Committee chairman can allocate to the Governmental Affairs Committee the direct spending authority needed to bring the bill to the floor without it being subject to a Budget Act point of order.

“This amendment puts the Senate on notice that we intend to move a postal reform bill this year,” said Senator Collins.

The Postal Service is the linchpin of a $900 billion mailing industry that employs 9 million Americans in fields as diverse as direct mailing, printing, catalog production, and paper manufacturing. Industries that rely on the Postal Service and its affordable rates account for nearly 9% of the Gross Domestic Product. However, the Postal Service faces $5.0 billion in debt to the U.S. Treasury, and its long-term liabilities are enormous—nearly $7 billion for Workers’ Compensation claims, $5 billion for retirement costs, and as much as $57 billion to cover retiree health care costs.

“By all accounts, the Postal Service has been a success. More than 30 years after its birth, it is a key part of the nation’s economy, delivering to more than 100 million addresses and supporting a massive mailing industry. Three decades of success, however, does not mean that change is not necessary. The Postal Service knows this, and has worked hard to modernize in recent years under the strong leadership of Postmaster General Jack Potter. They have made progress, but they can only do so much on their own. Now is the time for Congress to step in and make the fundamental changes necessary to allow the Postal Service to be as successful in the 21st century as it was in the second half of the 20th century,” said Senator Carper.

“If the Postal Service no longer provided universal service at affordable rates, no private company could step in and fill the void,” said Senator Collins. “The economics simply would not work.”

Last month, the General Accounting Office echoed Senator Collins’ calls for comprehensive—not incremental—reform to ensure the USPS’ future viability. In a letter to the Senator, GAO Comptroller General David Walker wrote, “Comprehensive postal reform is urgently needed. The ability of the service to remain financially viable is at risk because its current business model—which relies on mail volume growth to cover the costs of its expanding delivery network—is not well aligned with 21st century realities.”

To date, the Senate Governmental Affairs Committee has held six hearings on postal reform, with a seventh scheduled for Tuesday, March 23 in conjunction with the House Government Reform Committee.