WASHINGTON, D.C.—Several prominent industry and association leaders, testifying today before a Senate Governmental Affairs Committee hearing chaired by Senator Susan Collins (R-ME), said the U.S. Postal Service (USPS) must change the way it operates or the survival of businesses that rely on affordable postal rates will be jeopardized.
“The Postal Service’s short-term fiscal health is illusory, and Congress must not ignore the reality that the Postal Service as an institution probably cannot survive without fundamental reform,” said Senator Collins, whose Committee has jurisdiction over the USPS. “If the Postal Service were no longer to provide universal service and deliver mail to every customer, the affordable communication link upon which many Americans rely would be severed. Most commercial enterprises would find it uneconomical, if not impossible, to deliver mail and packages to rural Americans at the rates charged by the Postal Service.”
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 is presently paying down $6.5 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 $45 billion to cover retiree health care costs. “We cannot wait for a convenient time to reform the postal service. To do so is to put jobs and businesses at risk,” Senator Collins pointed out.
CEOs who testified at today’s hearing emphasized that ensuring the continued viability of the Postal Service and its affordable rates are keys to their companies’ survival. “Large increases in postage rates will result in small business failures in my industry,” said Chris Bradley, CEO of Cuddledown Inc., a Portland, Maine-based down comforter and pillow manufacturer that relies on catalog sales.
“Reforming the postal service is an opportunity to strengthen a sector of American jobs that stay in America. This hearing today is about so much more than just reforming the U.S. Postal Service. This is about the economy, this is about jobs, this is about the future,” said RR Donnelley CEO Mark Angelson. “At its heart, the USPS must change.”
Hearing witnesses, who concurred with Bradley and Angelson, included Ann Moore, Chairman and CEO, Time, Inc.; Max Heath, Vice President of Landmark Community Papers, on behalf of the National Newspaper Association; William Ihle, Senior Vice President, Public Relations, Bear Creek Corp.; and Shelley Dreifuss, Director, Office of the Consumer Advocate, Postal Rate Commission.
“There is no issue more crucial to the magazine business than the future viability of the postal system. The great majority of our readers depend upon the postal system to deliver their magazines,” said Time Inc. Chairman and Chief Executive Officer Ann Moore. “We have 15,000 employees who have a vital stake in the work that is before you here in Congress. If you count all the suppliers that depend on us, from the paper mills to the printers to the mail houses, even more peoples’ livelihoods are at stake.”
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 five hearings on postal reform, with a sixth scheduled for Thursday, March 11. Chairman Collins and Senator Tom Carper (D-DE) are planning to introduce legislation to reform the postal service later this year.
Testimony is available online at