John McCain introduces USPS control bill in US Senate

Former presidential candidate John McCain today introduced a new postal reform bill into the US Senate, which mirrors proposals put forward by Republicans in the House of Representatives. McCain’s Postal Reform Act of 2011 would set up two control boards – one to oversee a kind of receivership for the US Postal Service if it defaults on any of its government payments, the other to “take politics out of the process” of closing post offices and USPS processing infrastructure.

Commenting on his bill, the Republican Senator from Arizona claimed the Postal Service was facing the prospect of losing $238bn by 2020 under its present course.

This $238bn figure was rather more than the $20bn that USPS Postmaster General Patrick Donahoe has said in recent months he needs to find to rebalance the USPS books by 2015.

The McCain bill introduces into the Democrat-controlled US Senate the same provisions as its companion, the Issa-Ross bill of the same name, which was introduced in the Republican-controlled House of Representatives and debated earlier this week.

Senator McCain said it would restore financial health and long-term viabaility to the “broken” Postal Service.

He said today: “According to their own estimates, by 2020 the Postal Service expects to face a shortfall of up to $238 billion. Even with dramatic cost savings of $12 billion and workforce reduction of 110,000 postal employees in the past four years, the Postal Service is expected to end this fiscal year with a $10 billion loss.”

The McCain bill proposes allowing the elimination of Saturday deliveries to help USPS cut costs, but leaves alone the multi-billion dollar pension overpayments made by USPS.

McCain inferred that such measures were “temporary fixes” that would not help the long-term viability of USPS, saying: “If we continue to act in this irresponsible way, the American taxpayer will be the one that ultimately suffers in the form of higher postage prices and taxpayer bailouts. We must make hard choices now so future generations of Americans will have a viable Postal Service.”

Control boards

McCain said his proposed Postal Service Financial Responsibility and Management Assistance Authority was modelled on a similar control board created to help the District of Columbia deal with a major budget imbalance in the mid-1990s.

“This Authority, triggered by a Postal Service default on its federal obligations, would replace the Postal Board of Governors with mandates to cut costs, and put the Postal Service back on a path to financial solvency,” he said.

The second major provision of the McCain bill, as with the Issa-Ross legislation, would set up a Postal Reorganization board to consolidate and close post offices and mail processing facilities.

“Right-sizing the network is vital to the future of the Postal Service and its customers. Congress, however, continues to put up political road blocks that prevent these closings and consolidations,” said McCain. “This bill will take politics out of the process and allow the Postal Service to right-size its operations.”

Elsewhere, McCain said his bill would allow arbitrators to take more account of the financial circumstances at the Postal Service in finalising union contracts, and would exempt USPS from certain federal labour legislation to allow wage costs to be controlled.

The McCain bill would also require postal rates for USPS services to cover service costs, he said.

And, USPS employees would be required to pay the same health and life insurance costs as other federal workers, said McCain.

Republicans in the House of Representatives naturally commended their Senate colleague for introducing their bill into the upper house of Congress.

“With decisive and comprehensive postal reform now having the full-force of Senator McCain’s leadership behind it, we are in position to avert the unnecessary taxpayer bailout of the United States Postal Service,” said California Congressman Darrell Issa, chairman of the House Oversight Committee.

“With Senator McCain as a partner in this effort, the Postal Reform Act is now poised to advance in both the House and the Senate and the American people are one step closer to having a postal service that is capable of meeting the needs and demands of the 21st Century,” added Issa, overlooking the fact that Democrats, who have the majority in the US Senate at present, do not support the Republican proposals.

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