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1Center for American Progress | Principles for Postal Service Reform
Principles for Postal Service Reform
Reforming the Service While Preservinga Beloved U.S. Institution
By Kristina Costa March 13, 2012
Te only way o reach Supai, Arizona (pop: 208), is o hike or helicoper eigh mileso he botom o he Grand Canyon. Te U.S. Posal Service delivers mail and supplieshere hree days a week—by mule.Our counry’s seepes canyon may be no mach or he American mail carrier, bu ourposal sysem does ace a gaping hrea rom a huge hole
 
o anoher kind: Aer several years o modes surpluses, he posal service los $25.4 billion beween 2007 and 2011,plunging $13 billion ino deb.Digging ou o ha nancial chasm will require congressional acion, and lawmakers areconsidering several reorm plans. As hey do, members o Congress should make every eor o preserve his criical and beloved American insiuion. Shoring up he posalservice’s nances or he Inerne Age is essenial, bu so are hese core principles:
•
Minimize harm.
Reorm eors should minimize harm o economically and socially  vulnerable communiies ha depend on he mail, o oher governmen uncions harely on he posal service, and o he 574,000 Americans who coun on he posalservice or good, middle-class jobs.
•
Address the real problems.
Congress should ensure any legislaion o resolve heposal service’s nancial crisis acually addresses he major drivers o ha crisis, amonghem he congressional mandae ha he service preund 75 years’ worh o reireehealh benes over jus 10 years.
•
Refrain from additional burdensome mandates.
Congress should give he posalservice more exibiliy in is operaions, no less, and rerain rom applying addiional burdensome conrols on posal operaions.Tis issue brie examines he crisis acing he U.S. Posal Service in ligh o hese core prin-ciples. As will be demonsraed, i is possible o enac reorms ha resolve he posal ser- vice’s nancial crisis while minimizing negaive eecs in communiies across our counry.
 
2Center for American Progress | Principles for Postal Service Reform
Background: How did we get here?
Te posal service is an independen ederal agency ha is supposed o und is opera-ions hrough he sale o posage. Te approximaely $100 million he posal service gesrom Congress each year (o pay or ree mailing services or he blind and or overseas voers) is jus one-enh o 1 percen o is $75 billion operaing budge.I he posal service were a privae-secor company, i would rank 29h in he Forune500. Bu i’s no only big; i’s also popular a a ime o mouning cynicism abou govern-men. A 2010 Pew Research Cenersurvey ound ha 83 percen o Americans gavehe posal service a “avorable” raing. In he same survey avorabiliy raings or he womajor poliical paries, Congress, and he governmen in general all reached record lows.Bu he posal service is under undeniable nancial pressure. Mail volume has beenin decline or several years. Aer reaching an all-ime high o 213.1 billion mail pieceshandled by he posal service in 2006, volumes rs leveled o and hen plunged precipi-ously during he recession. Since 2008 mail volume has allen17.7 percen.Sill, he U.S. Posal Service delivers 40 percen o he world’s cards and leters. And some posal service observers believehe Grea Recession—no email and heInerne—is he bigges driving orce behind he recen decline in mail volume. Ta’sno o say ha he posal service shouldn’ work o develop innovaive ways o earnrevenue and remain compeiive as he economy recovers. Bu policymakers shouldno ignore he role played by he mos severe economic downurn since he GreaDepression when considering he posal service’s own nancial crisis les hey nd “solu-ions” ha do more harm han good.
 Three reform proposals
Tree legislaive ideas inroduced in Congress las year represen hree dieren approacheso solving he posal service’s nancial problems. Tese proposals are oulined below.
 The Issa proposal
TePosal Reorm Ac , sponsored by Rep. Darrell Issa (R-CA), conains provisions oallow he posal service o swich rom six- o ve-day residenial delivery and o makeadjusmens o rural delivery pracices. Bu he bill ocuses mos o is atenion on clos-ing budge gaps hrough changes o he posal workorce. Te bill would creae wo new oversigh organizaions or he posal service:
 
3Center for American Progress | Principles for Postal Service Reform
•
Te Commission on Posal Reorganizaion, which would review plans or aciliy clo-sures (a role already underaken by he independen Posal Regulaory Commission)
•
 A new solvency auhoriy, which would have he abiliy o “rejec, modiy, or ermi-nae one or more erms o condiions o an exising collecive bargaining agreemen” According o he Cener or American Progress Acion Fund’s David Madland, his isnohing more hanhidden union busingand ignores he successul workorce reduc-ion agreemens ha posal service managemen and he posal workers’ unions reachedduring he recession.
 The Sanders proposal
TePosal Service Proecion Ac , sponsored by Sen. Bernard Sanders (I-V), lookso close he posal service’s nancial gap in par by reunding overpaymens madeo he Posal Service Reiree Healh Benes Fund, he Posal Service Fund, and heEmployees’ Compensaion Fund under he Federal Employees’ Compensaion Ac. Teposal service is esimaed o have overpaid pension unds by as much as $13 billion.Te bill would also encourage he posal service o nd addiional revenue sources by esablishing crieria under which pos ofces can provide nonposal services such asdocumen noarizaion and check cashing, and by legalizing he mailing o wine and beer by licensed wineries and breweries across sae lines. Tese are among he many services ha he pos ofce is legally prohibied rom oering.
 The Lieberman proposal
Te21s Cenury Posal Service Ac , sponsored by Sen. Joseph Lieberman (I-C),akes a dieren ack, seeking o reduce he overall workorce o he posal service while adjusing reiree-bene ormulas o close ha nancing gap. Te Lieberman billauhorizes he posal service o oer buyous o employees wih he goal o reducing he workorce by as many as 100,000 workers over hree years. Te bill also recalibraes heamorizaion ormula or mandaed preunding o reiree healh benes bu does norescind he requiremen as Sen. Sandershas advocaed.Te dierences beween hese hree bills highlighs why keeping he posal servicenancially viable during our nascen economic recovery while mainaining he highqualiy o mail services Americans expec is a difcul pracical and poliical proposiion.Bu Congress should ake care o ensure ha new posal service legislaion helps solve,raher han creae, problems or he posal service.
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