FOR RELEASE: April 17, 2012
Sen. Carper Delivers Floor Speech on Postal Reform Bill
WASHINGTON – Today, Sen. Tom Carper (D-Del.), Chairman of the Subcommittee that oversees the U.S. Postal Service, delivered remarks on the Senate floor on the 21st Century Postal Service Act (S.1789), following this morning's introductory debate on a new draft that incorporates changes suggested by fellow Senators, particularly regarding post office and processing plant closures and overnight delivery. His remarks, as prepared for delivery, follow:
"Mr. President, we're debating this bill today because the Postal Service is facing a dire financial crisis that threatens its survival. This is a crisis that has been building for some time. It's one that only Congress can fix at this point and one that we absolutely must fix now, in a matter of weeks.
"Since the Postal Service was first established in 1971, we've taken it for granted that our mail would arrive and that important business and personal correspondence would reach its destination. In addition, businesses large and small have come to rely on the mail to reach new customers and communicate effectively with existing customers.
"The Postal Service has a presence in every community in our country. It supports a trillion-dollar mailing industry that creates and sustains millions of private-sector jobs. Unfortunately, those jobs are at great risk today. They're at risk because those of us in Congress have, to date, proven either unwilling or unable to come to consensus around a package of reforms that can update the Postal Service's network and business model to reflect the reality that it faces today. And that lack of action on our part comes despite ample warning about the severity of the problem and the consequences of not appropriately and effectively solving it.
"Nearly two years ago, former Postmaster General Jack Potter announced that the Postal Service would run up cumulative losses of more than $230 billion by 2020. Now there are several reasons for these loses, including the diversion of First Class mail to electronic forms of communication and legislative hurdles Congress has imposed on reform efforts.
"Mr. Potter and his successor, Pat Donahoe, have done a tremendous job in trying to chip away at these losses. Over the past decade they've reduced the size of the postal workforce by roughly a third, all through attrition. They've closed scores of mail processing facilities across America with no noticeable impact on service. They've introduced successful new products such as the Flat Rate Box and formed productive partnerships with companies like UPS and FedEX. But still the losses are mounting.
"Last year, the Postal Service suffered an operating loss of more than $5 billion. It will see a similar loss this year even if it finds some way to avoid making the retiree health pre-funding payments due in the coming months. Then the losses accelerate: $6.5 billion in 2013; just under $10 billion in 2014; more than $12 billion in 2015; and more than $15 billion in 2016.
"But these losses are only theoretical. I say that because the Postal Service is close to exhausting its $15 billion line of credit with the Treasury and, by this time next year, will be well on its way to running completely out of cash. If that were to occur, the Postal Service's ability to continue operating will be in jeopardy.
"Postmaster General Donahoe has said repeatedly that he and his team will do everything they can do to keep the mail moving even as the Postal Service's finances deteriorate. I believe him. But make no mistake: If the Postal Service is not permitted in the very near future to begin making the adjustments needed in response to the likely permanent declines in mail volume we've seen in recent years, it will drown in red ink. The ripple effect of losing the Postal Service and the still-very valuable services it provides would deliver a body blow to our economy at the very time that it is recovering.
"We're on the brink of this impending disaster in part because we're expecting the Postal Service of 2012 to try and be successful with a business model created in the 1970s.
"In 1970, there was no e-mail. There was no electronic bill pay. No Facebook. No Twitter. No smart phones. Today, Americans live and work online. We shop and transact more and more business online. These trends are likely to accelerate. If any of our colleagues doubts that, they should ask our pages here how often they sit down and write a letter or send a greeting card. They should ask members of their own staffs how often then pay their bills through the mail. They should look at their own mail. When I first arrived in the Senate in 2001, I received roughly 15 hard-copy letters from constituents for every e-mail. Today, those numbers are reversed. For every letter we receive in 513 Hart, we receive a dozen emails.
"The federal government itself is even contributing to this trend – and in a big way. The Social Security Administration recently announced that, starting next year, virtually all 73 million payments it sends to Social Security recipients each month will now be processed online through direct deposit.
"So even as the American people adjust to new communications technologies, many of us here in Congress expect the Postal Service to continue as if nothing has changed. But in these changing times, we need to recognize that difficult choices need to be made. It is not efficient or affordable to maintain a mail processing and delivery network built for the peak mail volumes of years ago.
"That said, many of my colleagues have legitimate concerns about the severity and speed of the Postal Service's streamlining efforts. To address those concerns, the managers' amendment Senators Lieberman, Collins, and Brown and I have put forward includes a number of safeguards crafted to ensure that that the changes occurring in the coming years are implemented in a responsible way. We also provide assurances in our amendment that those who still rely largely on the Postal Service, including rural customers without access to broadband, will continue to have access to the services that they know and need in the years to come.
"We also take steps in this bill to ensure this effort to save the Postal Service isn't all about closing facilities and cutting service. Recognizing that questionable policy decisions made over the years regarding the Postal Service pension and health care obligations are a part of the Postal Service's financial problems, we call for refunding the more than $10 billion that the Postal Service has overpaid into the Federal Employees Retirement System. A portion of that refund would be used to encourage at least some of the 125,000 postal employees at or near retirement age to retire now, or within the next year or two, saving the Postal Service billions annually.
"Controversially, the Postal Service is the only federal agency that pre-funds its future retiree health obligations. We instituted that requirement in 2006 at a time when the Postal Service was in good shape so that taxpayers wouldn't eventually be saddled with those obligations in the event that the Postal Service couldn't meet them in the years to come. But in retrospect, the payment schedule put into place back then proved to be too aggressive once the bottom fell out of our economy in 2008. Our managers' amendment scraps that schedule and replaces it with a more realistic one based on what the Postal Service actually owes. This change coupled with others – including one that would better coordinate postal retirees' Medicare and FEHBP benefits- would cut the Postal Service's retiree health costs by more than half.
"Finally, our managers' amendment pushes the Postal Service to redouble its efforts to innovate and develop new products that can grow revenue.
"There are some who will argue that our amendment is too aggressive, that it allows the Postal Service to go too far too soon in cutting costs. There are others who will argue in the coming days that we have blinders on and aren't giving the Postal Service the authority it needs to make the adjustments that need to happen in the coming years. I'll admit that what we were able to come up with is far from perfect. It also doesn't do everything the Postal Service wants it to do.
"But regardless of whether we went too far, or not far enough, I think everyone in this body would agree that doing nothing and allowing the Postal Service to fail is not an option. We need to work quickly to prevent the economic catastrophe that would occur if the Postal Service were to shut its doors. We need to act with a sense of urgency in the coming days. We need to do our jobs, show leadership, and be certain that the legislative roadmap we put together actually improves the situation the Postal Service is facing. Now is not the time to kick the can down the road or adopt half measures that need to be revisited next year or the year after. We need to give postal management the tools they need to right the ship without political interference. We need to provide postal customers that's needed in order for them to continuing relying on the mail well into the future."
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