Committee approves Collins-Carper postal reform legislation

The Senate Homeland Security and Governmental Affairs Committee today approved postal reform legislation introduced by Senators Susan Collins (R-ME) and Tom Carper (D-DE). The Collins-Carper Postal Accountability And Enhancement Act represents the first major overhaul of the USPS since 1970. Their legislation will strengthen the USPS, which is the linchpin of a $900 billion mailing industry that employs more than 9 million people nationwide. Senator Collins is the Chairman and Senator Carper is a member of the Senate Homeland Security and Governmental Affairs Committee, which has jurisdiction over the USPS. The Committee today approved the postal reform legislation by a vote of 15 to 1. It must now be considered by the Senate.

The USPS faces approximately $65 billion in unfunded liabilities and other obligations. In addition, over the last three years, the volume of First-Class Mail has decreased annually by 1.9 billion pieces, while approximately 1.7 million new addresses have been added annually during the same period – increasing delivery costs at a time when revenue has declined.

“The health of the Postal Service is essential to the vitality of thousands of companies and the millions that they employ,” said Senator Collins. “Our comprehensive, bipartisan legislation will help put the Postal Service on more solid financial ground while strongly endorsing the basic features of universal service – affordable rates, frequent delivery, and convenient community access to retail postal services.”

“If we want to avoid disastrous future postal rate hikes and the put the Postal Service on firm, financial footing, then we need to pass this bill,” said Senator Carper. “It's been more than 30 years since we've considered major postal reform legislation. We need to bring the Postal Service into the 21st century. This legislation would give the Postal Service the tools it needs to survive at a time when many of its customers enjoy multiple electronic alternatives to traditional hard-copy mail. Passage of this legislation will preserve the health of the nearly $1 trillion mailing industry and the millions of American jobs that depend on it.”

The Collins-Carper postal reform legislation requires the Postal Service to establish a set of service standards for market dominant products, which will preserve the public’s access to postal services in all communities. It requires the Postal Service to report to Congress with a strategy for how it intends to restructure the Postal Service’s infrastructure to reduce excess processing capacity and space. It also requires the Postal Service to report annually to Congress about its success in these areas.

The Collins-Carper bill simplifies the rate setting process. It gives the Postal Service Board of Governors the authority to set rates for competitive products, as long as these prices do not result in cross-subsidy from the market-dominant products; guarantees a high degree of transparency to ensure fair treatment of customers of the Postal Service’s market dominant products and companies competing with the Postal Service’s competitive products; and gives the Postal Regulatory Commission the power to institute emergency price increases, but limits these emergency increases to “unexpected and extraordinary circumstances,” such as the anthrax attacks.

The legislation gives the Postal Service the authority to transition individuals receiving workers’ compensation to retirement annuity when the affected individual reaches the age of 65. It also puts into place a 3-day waiting period before an employee is eligible to receive workers’ compensation pay. This is consistent with every state-run plan. It repeals a provision of Public Law 101-18 which requires that money owed to the Postal Service due to an overpayment into the Civil Service Retirement System Fund be held in an escrow account. The bill also returns to the Department of Treasury the responsibility for funding CSRS pensions benefits relating to military service of postal retirees. No other agency is required to make this payment retroactively.

Senators Collins and Carper succeeded in lowering the cost of the legislation, to $500 million over five years, which is $1 billion less that the House proposal. This is mostly accomplished by requiring the Postal Service to devote more resources to pre-fund retiree health care.

The Collins-Carper postal reform legislation is endorsed by the National Association of Postmasters of the United States, National Rural Letter Carriers’ Association, National Association of Postal Supervisors, Financial Services Roundtable, National Federation of Independent Businesses, National Retail Federation, and the Coalition for a 21st Century Postal Service, which represents thousands of the major mailers, employee groups, small businesses, and other users of the mail.

The Senate Committee on Homeland Security and Governmental Affairs has held a series of nine hearings, which began in September 2003, during which time it reviewed 35 legislative and administrative recommendations for postal reform, as recommended by the President’s Commission on the U.S. Postal Service.