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Principles for Postal Service Reform

Principles for Postal Service Reform

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It is possible to enact reforms that resolve the postal service’s financial crisis while minimizing negative effects in communities across our country, writes Kristina Costa.
It is possible to enact reforms that resolve the postal service’s financial crisis while minimizing negative effects in communities across our country, writes Kristina Costa.

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Categories:Types, Research
Published by: Center for American Progress on Mar 13, 2012
Copyright:Attribution Non-commercial


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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rys 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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