By U.S. Sen. Susan Collins(R-Maine)
The United States Postal Service (USPS) has traditionally prided itself on the fact that “neither snow nor rain nor heat nor gloom of night” can keep its carriers from the “swift completion of their appointed rounds.” That is why I was astonished to hear that the USPS is considering reducing mail delivery from six days a week to just five. Postmaster General John Potter recently made this unexpected recommendation during a hearing before a subcommittee of the Senate Homeland Security and Governmental Affairs, of which I am the Ranking Member. The purpose of this hearing was to examine the impact of the current economic crisis on the U.S. Postal Service.
There is no doubt that the recession is affecting virtually every sector of our economy including the Postal Service. The statistics are alarming. Maine’s unemployment rate hit a 16-year high of seven percent at year’s end, with widespread job losses in the retail, forest products, construction, boatbuilding, publishing, and hospitality industries. The troubled economy has certainly also affected the U.S. Postal Service, which is expected to post billions of dollars in losses in this current fiscal year. Nevertheless, I am extremely disappointed that the Postmaster General would advocate the elimination of the requirement for six-day-a-week delivery as a potential solution to the Postal Service’s budget woes. Such a reduction in service would hurt businesses and families that pay their bills, ship and receive goods, communicate with loved ones, and receive prescription drugs through the mail. And, I would argue, it would worsen the Postal Service’s financial problems by driving away customers.
In the past, when the USPS raised its rates, its volume often went down. The USPS is already estimating that its decline in mail volume will lead to a $7 billion loss this fiscal year and an additional $1.5 billion loss in fiscal year 2010. I believe that the proposed cuts in service would force many businesses, printers, newspaper publishers, and other customers with time-sensitive mail to look to other means, such as the Internet, for delivery options which would cause an even bigger drop in volume. Rather than helping it recover, I believe cutting services could ultimately trigger a death spiral for the Postal Service.
It is further disappointing that this news comes just two years after I worked closely with Subcommittee Chairman Tom Carper on bipartisan postal reform legislation that was signed into law. We worked to strengthen this crucial service that is the linchpin of a $900 billion mailing industry that employs nine million Americans in fields as diverse as direct mailing, printing, catalog production, paper manufacturing, and financial services. We helped strengthen the funding for health insurance for postal workers and retirees. Above all, we worked to position the Postal Service for the challenges of the rapidly changing 21st Century economy.
That postal reform law was the first modernization of the Postal Service in more than 30 years and was designed to ensure the continuation of universal postal service at predictable and affordable rates. Getting the legislation signed into law was an arduous process that included nine Senate hearings and close consultation with experts and stakeholders. We worked closely with the Postal Service, the Office of Management and Budget, employee unions, printers, publishers, non-profit organizations, and other members of the mailing community.
Now we are in the midst of a deep recession that has put the issue of the viability of the USPS before us once again. The Postal Service’s response to the current economic crisis has not been to use the powerful tools provided by our legislation, but rather to use the crisis as an argument to unravel the intricate compromise that made up our landmark postal reform law.
In addition to considering abandoning six-day mail delivery, the Postal Service is seeking relief from fully funding its retiree health benefits obligations. Our postal reform law requires the Postal Service to fund its retiree health care obligations by making annual payments over a ten-year period. Though the USPS agreed that this goal was achievable just two years ago, it now argues that this requirement is unsustainable and is requesting a eight-year hiatus from this obligation. This will only worsen the unfunded liabilities of the USPS and delay the implementation of reforms it should be undertaking. I have joined Senator Carper in supporting a two-year reprieve from the requirement to help the Postal Service weather the current economic crisis, but I think suspending payments for eight years would be a mistake.
The USPS must be more proactive in addressing its long-term fiscal challenges, looking beyond short-term fixes, to address its budget shortfall. It must also provide more detailed financial information regarding the actions it plans to take to stabilize its budget. Eliminating six-day-a-week delivery should not be its first option but rather the last resort.
