US Senator unveils postal reform bill

A postal reform bill has been unveiled in the US Congress proposing to cut Saturday deliveries and allow the Postal Service more scope to close post offices. The Postal Operations Sustainment and Transformation (POST) Act of 2010 was introduced today (September 23) by Tom Carper, the Democrat Senator from Delaware, bringing to the table many of the reforms recommended by the postmaster general.

Sen. Carper said the troubled economy and continuing migration to electronic communications was putting the future of the USPS “in jeopardy”.

He spoke of a need for a “shared sacrifice” by postal employees and customers alike to protect the service.

The POST Act would allow post offices that are “no longer necessary” to be replaced by automated kiosks or postal stations located in grocery stores.

And, eliminating Saturday deliveries would save $3bn a year, the Senator believes.

“If we do nothing, we face a future without the valuable services the Postal Service provides,” Sen. Carper warned.

“However, if we act quickly, we can turn things around by passing this necessary bill that would give the Postal Service the room it needs to manage itself and avoid it becoming the latest victim of Congressional gridlock.”

Along with the move to a five-day delivery week and the option to close certain post offices, the POST ACT also puts forward measures to address Postal Service staff wages, benefits, health costs and pension arrangements.

It seeks to address “gross overpayments” being made by the USPS into the Civil Service Retirement System (CSRS), and cut requirements to pre-fund future pension costs to the tune of between $5.5bn and $5.9bn a year.

If passed by Congress, the bill would force the Office of Personnel Management to recalculate the USPS contributions to the CSRS based on a fairer formula.

Estimates have put the overpayment by the USPS into the federal employee pension fund in the region of $50bn, with Senator Carver suggesting that setting the formula right would make the Postal Service $5bn a year better off.

The Postal Service has already been making efforts to cut costs and plan further cost-cutting efforts, but postmaster general John E Potter said the POST Act would provide a “roadmap to recovery” for USPS.

He said it contained many of the “essential” elements the Postal Service has identified as necessary to address the changing market.

Potter said: “This legislation is creative in that it alleviates our retiree health benefit burden while bringing resolution to the pension overpayment dilemma we’ve faced.

“It permits us to step into the 21st Century by enabling elemental reforms to our network, our infrastructure, and our labour relations and it reduces the number of days we provide door to door delivery service to more closely align our costs and the needs of our customers,” said Potter.

Other proposals within the POST Act would end the prohibition on the USPS offering non-postal products and services.

The Postal Service would be freed up to offer products “in the public interest” that make use of the existing postal network.

It would be allowed to start shipping wine and beer, bringing it more in line with its private sector competitors UPS and FedEx.

And, the USPS would have more flexibility to work with local and state governments to provide services such as voter registration or the renewal of driver’s licenses.

The legislation would also mean USPS does not have to set wages and benefits for current staff in line with its private-sector competitors. Wages and benefits comprise 80% of the Postal Service’s expenses, and under the terms of the POST Act, the USPS would be allowed to take its financial conditions – and rate caps – into account when setting salaries.

If Senator Carper can secure enough votes for the Act in Congress, the legislation could take effect in the next fiscal year, FY 2011.