Saving the Postal Service, assuring reliable delivery

By U.S. Sen. Susan Collins
(R-Maine)
    The harsh reality is that the United States Postal Service is losing money hand over fist. It has lost more than $13 billion during the past two years, and by the end of this year, its credit limit of $15 billion will be maxed out. Quite simply, we need to help put the Postal Service back on solid financial footing, not only to help protect the nearly 38,000 Mainers who work in jobs related to mailing industry, but also so that taxpayers are not left holding the bag.
    Our efforts recently took a major step forward when the U.S. Senate overwhelmingly approved a bipartisan postal reform bill that I coauthored along with Sens. Joe Lieberman (I/D-Conn.), Tom Carper (D-Del.) and Scott Brown (R-Mass.). Together, we demonstrated that when Republicans and Democrats work together, we can achieve important policy for those who sent us here.
    Our bill would reform the U.S. Postal Service. But important to so many Maine residents and businesses, it would also save the Eastern Maine Processing and Distribution Facility in Hampden that had been slated for closure by the Postal Service.
    To understand the solution, we first have to examine the problem. First-class mail volume has fallen by 26 percent over the past six years and it continues to decline. Reflecting that sharp drop in volume, the Postal Service’s revenue has also plummeted from $72.8 billion in 2006 to $65.7 billion in 2011. The Postal Service is at risk of not being able to make its payroll as soon as this fall, according to the Postmaster General.
    Nearly 80 percent of the Postal Service’s costs are workforce-related; these are the costs it must confront, rather than reducing service which will only drive more customers away and cause revenues to decline further.
    To begin to address the problem, the Senate-passed bill would give the Postmaster General the tools to compassionately downsize the postal workforce to match the declining mail volume. Our bill would give the Postal Service the ability to compassionately reduce its workforce by about 18 percent through employee buy-outs and offering early retirement incentives to those eligible to retire. This would save an estimated $8 billion every year. The incentives would be funded by the refund of overpayments made by the Postal Service into the Federal Employee Retirement System. These are not tax dollars; the payments were made from the Postal Service’s revenues and postal employee contributions.
    Our bill would also overhaul the federal workers’ compensation program across the entire federal government, for the first time in 35 years, by reducing costs, cracking down on fraud, making the system fairer, and encouraging a return to work for employees able to work.
    The bill encourages the Postal Service to operate more like a business: by cutting internal costs first instead of driving away customers with deep service cuts or steep price hikes. It would prevent the Postal Service from immediately eliminating Saturday delivery as it has requested. Instead, it would delay this for at least two years and then allow this service reduction only if the Government Accountability Office and Postal regulators certify that elimination of Saturday delivery is necessary to achieve solvency.
    The bill would also prevent the closure of small, rural post offices for one year unless there is no significant community opposition to the closure. It encourages the Postal Service to work with the community to explore options such as co-locating a post office within a retail store or sharing space with government agencies.
    I insisted that our bill include a key provision that would result in the continued operation of the Eastern Maine Processing and Distribution Facility in Hampden, and several other important facilities, by mandating certain overnight delivery standards in some areas. In Maine, reliable overnight delivery service would be impossible without both the Eastern Maine facility in Hampden and the Southern Maine plant in Scarborough. The Hampden plant could not be closed, as the Postal Service has recommended, as long as these standards become law.
    Our bill is garnering praise from many in the $1.1 trillion mailing and mail-related industry who depend on reliable mail service. The National Newspaper Association says the bill “represents a new commitment by our nation’s leaders to maintaining universal service while undertaking much needed repairs on our nation’s postal system.” The National Association of Postmasters of the U.S. says our bill would “help relieve some of the challenges confronting the Postal Service, while still maintaining universal access.” The Coalition for a 21st Century Postal Service says “this bill is a vital first step in pulling the Postal Service back from the edge of a fiscal abyss.”
    Senate passage of our bill is a big victory, but our work isn’t done. Now, the House of Representatives must pass its legislation. The House and Senate must then come together and work out our differences, and more compromises will be required along the way. But it is critical that we must get a bill to the President for his signature. Americans count on reliable, affordable, and universal mail service. A healthy Postal Service is not just important to postal customers, but also to our national economy.