US Senate leaders have introduced a major postal reform bill designed to rescue the ailing US Postal Service.
The bill was unveiled last night by Senators Tom Carper and Tom Coburn, respectively the chairman and ranking member of the Senate’s Homeland Security and Governmental Affairs Committee.
It seeks to redress pension and healthcare arrangements in USPS that has pushed the federal agency into $15bn worth of debt and billions in annual losses. Last year, USPS recorded a $15.9bn loss, $11.1bn of which was a defaulted payment to the federal government.
USPS currently needs to cut about $20bn a year from its annual budget as its top money-maker, First Class Mail, continues to decline in volume each year.
The Senate Committee’s bill, dubbed the Postal Reform Act 2013, has bipartisan support, which will help it through the Senate.
However, once approved by the Senate it would need to be merged with the current House of Representatives postal reform bill and be approved by both chambers of Congress.
The Senate bill relies more on reforming pension and healthcare arrangements to rectify USPS finances, rather than further downsizing of the mail network, compared to the House bill. While the Republican-led House proposal seeks an immediate end to Saturday mail delivery, the Democrat-led Senate bill would keep it in place at least a year.
Both versions of the postal reform legislation would look to reduce the use of door-to-door mail delivery in favour or more community mail boxes, as a key way to cut operational costs.
Senate bill provisions
The Senate bill proposes to recalculate USPS pension obligations and use an estimated $6bn in expected surplus funds to help pay off USPS debt.
The bill would also restructure USPS health benefit pre-funding to cut the current $5.5bn annual payment to the federal government by half. And USPS would be allowed to negotiate with the unions to set up its own healthcare plan.
And, the bill would seek to reform the workers’ compensation programme for ill or injured USPS staff.
While the bill would cut USPS pension and healthcare costs, it would ban USPS from closing any more mail plants for two years, and prevent any move to abandon Saturday mail delivery for at least a year. The bill would allow USPS to cut costs in its delivery network by requiring all new addresses to use community mail boxes, and on a voluntary basis switch existing properties with door-to-door mail delivery to kerbside or community mailboxes.
Among provisions designed to increase USPS revenues, rather than cut costs, are more powers for USPS to set its own pricing within a more flexible annual price cap, and the ability to offer a wider range of non-postal products that make use of the USPS networks.
The bill would also look to pave the way for USPS to run more governmental and state services, and would look to lift the prohibition on USPS delivering alcoholic beverages.
“Subject to change”
Senator Carper said today the US Postal Service was facing its worst financial challenges in 200 years, and was on the “verge of financial collapse”.
He said his bill presented a comprehensive solution to help prevent collapse of the US mail, and thereby protect millions of mail industry jobs.
The Democrat from Delaware said: “This bill isn’t perfect and will certainly change as Dr. Coburn and I hear from colleagues and stakeholders, including postal employees and customers. But the time to act is now. It is my hope that Congress and the Obama Administration can come together to enhance this plan in order to save the Postal Service before it’s too late.”
Coburn also noted that the bill was only the basis of debate, and not a finished proposal.
The Republican from Oklahoma said: “This proposal is a rough draft of an agreement subject to change that I hope will move us closer to a solution that will protect taxpayers and ensure the Postal Service can remain economically viable while providing vital services for the American people.”