US Senate Committee briefing focuses on “innovative” ideas for rejuvenating US Postal Service
A panel of key stakeholders gave their views on the “challenges and opportunities facing the US Postal Service in the digital age” at a briefing convened on Tuesday (12 May) by Senator Tom Carper, the ranking member of the Homeland Security and Governmental Affairs Committee. James Sauber, chief of staff of the National Association of Letter Carriers (NALC), had a suggestion for dealing with one of the USPS’s most persistent financial headaches: the retiree healthcare fund. Sauber recommended that the Office of Personnel Management should stop buying Treasury bonds and “invest the fund in something more sensible”.
“Healthcare costs are growing five to seven percent annually and Treasury securities are yielding two to three percent,” said Sauber, adding that other organizations such as the Pension Benefit Guaranty Corporation and Amtrak had established safeguards to allow them to invest healthcare assets in low-cost index funds that provided higher returns. He argued that the Postal Service should do the same.
“There are risks involved, but the fund is so large, the risks are so low, and the horizon is so long that that risk is minimal,” Sauber held. “This is a significant policy innovation that would allow us to reduce pressure on raising postage rates and cutting services. And it just makes good business sense.”
U.S. Government Accountability Office Director Lori Rectanus told the hearing that while innovation should be welcomed, the USPS must focus on its core assets.
“They need to identify new initiatives and growth opportunities, but the caveat is that they need to do it in areas that make sense,” Rectanus said.
“USPS is better positioned to manage postal-related initiatives rather than ones that go outside of the core business. We’ve seen them experience success with Negotiated Service Agreements, and there can be additional growth with NSAs. It requires good management costing to make sure they’re meeting their obligations.”
Hallmark President Donald Hall Jr. agreed that sorting out the pension funding and a renewed focus on postal operations would be key to restoring profitability and building trust in USPS. He also suggested that USPS could make great use of services such as digital tracking.
Jim Cochrane, who was the USPS Chief Information Officer before assuming his new role as Acting Chief Marketing and Sales Officer at the start of this month, said that the Postal Service must find the best way to “use data” to understand its customers and respond to their needs.
Summing up the evidence given at the hearing, Senator Carper commented: “The Postal Service needs freedom and flexibility to grow through innovation and explore additional ways to make money in the digital age by leveraging its unique 200-year-old distribution network. As we learned during today’s discussion, that opportunity can only come through comprehensive reform from Congress.”
The briefing on Tuesday was the second in a series of three. A third roundtable, which will focus on rural postal issues, is planned for Tuesday (19 May).
