Principles for Postal Service Reform
7
1 Center for American Progress | Principles for Postal Service Reform Principles for Postal Service Reform Reforming the Ser vice While P reserving a Beloved U.S. Institution By Kristina Costa March 13, 2012 Te only way o reach Supai, Arizona (pop: 208), is o hike or helicoper eigh miles o he botom o he Grand Canyon . Te U.S. Posal Service delivers mail and supplies here hree days a week—by mule. Our counry ’s seepes canyon may be no mach or he American mail carrier, bu our posal sysem does ace a gaping hrea rom a huge hole o anoher kind: Aer several years o modes surpluses, he posal servi ce los $25.4 billion beween 2007 and 2011, plunging $13 billion ino deb. Digging ou o ha nancial chasm w ill require congressional acion, and lawmakers are considering several reorm plans. As hey do, members o Congress should make every eor o preserve his criical and beloved American insiuion. Shoring up he posal service’s nances or he Inerne Age is essenial, bu so are hese core principles: • Minimize harm. Reorm eors should minimize harm o economically and socially vulnerable communiies ha depend on he mail, o oher governmen uncions ha rely on he posal serv ice, and o he 574,000 Americans who coun on he posal service or good, middle-class jobs. • Address the real problems. Congress should ensure any legislaion o resolve he posal service’s na ncial crisis acually addresses he major drivers o ha cr isis, among hem he congressional mand ae ha he service preund 75 years’ worh o reiree healh benes over jus 10 years. • Refrain from additional burdensome mandates. Congress should give he posal service more exibiliy in is operaions, no less, and rerain rom applying addiional burdensome conrols on posal operaions. Tis issue brie examines he crisis acing he U.S. Posal Service in ligh o hese core prin- ciples. As will be demonsraed, i is possible o enac reorms ha resolve he posal ser- vice’s nancial crisis whi le minimizing negaive eecs in communiies across our counry.
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Transcript of Principles for Postal Service Reform
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 17
1 Center for American Progress | Principles for Postal Service Reform
Principles for Postal Service Reform
Reforming the Service While Preservinga Beloved US Institution
By Kristina Costa March 13 2012
Te only way o reach Supai Arizona (pop 208) is o hike or helicoper eigh miles
o he botom o he Grand Canyon Te US Posal Service delivers mail and supplies
here hree days a weekmdashby mule
Our counryrsquos seepes canyon may be no mach or he American mail carrier bu ourposal sysem does ace a gaping hrea rom a huge hole o anoher kind Aer several
years o modes surpluses he posal service los $254 billion beween 2007 and 2011
plunging $13 billion ino deb
Digging ou o ha nancial chasm will require congressional acion and lawmakers are
considering several reorm plans As hey do members o Congress should make every
eor o preserve his criical and beloved American insiuion Shoring up he posal
servicersquos nances or he Inerne Age is essenial bu so are hese core principles
bull
Minimize harm Reorm eors should minimize harm o economically and socially vulnerable communiies ha depend on he mail o oher governmen uncions ha
rely on he posal service and o he 574000 Americans who coun on he posal
service or good middle-class jobs
bull Address the real problems Congress should ensure any legislaion o resolve he
posal servicersquos nancial crisis acually addresses he major drivers o ha crisis among
hem he congressional mandae ha he service preund 75 yearsrsquo worh o reiree
healh benes over jus 10 years
bull Refrain from additional burdensome mandates Congress should give he posal
service more exibiliy in is operaions no less and rerain rom applying addiional
burdensome conrols on posal operaions
Tis issue brie examines he crisis acing he US Posal Service in ligh o hese core prin-
ciples As will be demonsraed i is possible o enac reorms ha resolve he posal ser-
vicersquos nancial crisis while minimizing negaive eecs in communiies across our counry
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 27
2 Center for American Progress | Principles for Postal Service Reform
Background How did we get here
Te posal service is an independen ederal agency ha is supposed o und is opera-
ions hrough he sale o posage Te approximaely $100 million he posal service ges
rom Congress each year (o pay or ree mailing services or he blind and or overseas
voers) is jus one-enh o 1 percen o is $75 billion operaing budge
I he posal ser vice were a privae-secor company i would rank 29h in he Forune
500 Bu irsquos no only big irsquos also popular a a ime o mouning cynicism abou govern-
men A 2010 Pew Research Cener survey ound ha 83 percen o Americans gave
he posal service a ldquoavorablerdquo raing In he same survey avorabiliy raings or he wo
major poliical paries Congress and he governmen in general all reached record lows
Bu he posal service is under undeniable nancial pressure Mail volume has been
in decline or several years Aer reaching an all-ime high o 2131 billion mail pieces
handled by he posal service in 2006 volumes rs leveled o and hen plunged precipi-
ously during he recession Since 2008 mail volume has allen 177 percen
Sill he US Posal Service delivers 40 percen o he worldrsquos cards and leters
And some posal service observers believe he Grea Recessionmdashno email and he
Inernemdashis he bigges driving orce behind he recen decline in mail volume Tarsquos
no o say ha he posal service shouldnrsquo work o develop innovaive ways o earn
revenue and remain compeiive as he economy recovers Bu policymakers should
no ignore he role played by he mos severe economic downurn since he Grea
Depression when considering he posal ser vicersquos own nancial crisis les hey nd ldquosolu-
ionsrdquo ha do more harm han good
Three reform proposals
Tree legislaive ideas inroduced in Congress las year represen hree dieren approaches
o solving he posal servicersquos nancial problems Tese proposals are oulined below
The Issa proposal
Te Posal Reorm Ac sponsored by Rep Darrell Issa (R-CA) conains provisions o
allow he posal service o swich rom six- o ve-day residenial delivery and o make
adjusmens o rural delivery pracices Bu he bill ocuses mos o is atenion on clos-
ing budge gaps hrough changes o he posal workorce Te bill would creae wo new
oversigh organizaions or he posal service
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 37
3 Center for American Progress | Principles for Postal Service Reform
bull Te Commission on Posal Reorganizaion which would review plans or aciliy clo-
sures (a role already underaken by he independen Posal Regulaory Commission)bull A new solvency auhoriy which would have he abiliy o ldquorejec modiy or ermi-
nae one or more erms o condiions o an exising collecive bargaining agreemenrdquo
According o he Cener or American Progress Acion Fundrsquos David Madland his is
nohing more han hidden union busing and ignores he successul workorce reduc-ion agreemens ha posal service managemen and he posal workersrsquo unions reached
during he recession
The Sanders proposal
Te Posal Service Proecion Ac sponsored by Sen Bernard Sanders (I-V) looks
o close he posal servicersquos nancial gap in par by reunding overpaymens made
o he Posal Service Reiree Healh Benes Fund he Posal Service Fund and he
Employeesrsquo Compensaion Fund under he Federal Employeesrsquo Compensaion Ac Teposal service is esimaed o have overpaid pension unds by as much as $13 billion
Te bill would also encourage he posal service o nd addiional revenue sources by
esablishing crieria under which pos ofces can provide nonposal services such as
documen noarizaion and check cashing and by legalizing he mailing o wine and
beer by licensed wineries and breweries across sae lines Tese are among he many
services ha he pos ofce is legally prohibied rom oering
The Lieberman proposal
Te 21s Cenury Posal Service Ac sponsored by Sen Joseph Lieberman (I-C)
akes a dieren ack seeking o reduce he overall workorce o he posal service
while adjusing reiree-bene ormulas o close ha nancing gap Te Lieberman bill
auhorizes he posal service o oer buyous o employees wih he goal o reducing he
workorce by as many as 100000 workers over hree years Te bill also recalibraes he
amorizaion ormula or mandaed preunding o reiree healh benes bu does no
rescind he requiremen as Sen Sanders has advocaed
Te dierences beween hese hree bills highlighs why keeping he posal service
nancially viable during our nascen economic recovery while mainaining he high
qualiy o mail services Americans expec is a difcul pracical and poliical proposiion
Bu Congress should ake care o ensure ha new posal service legislaion helps solve
raher han creae problems or he posal service
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 47
4 Center for American Progress | Principles for Postal Service Reform
Principles for postal reform
Reforms must not endanger vulnerable Americans
Cos-saving ideas oaed requenly or he posal servicemdashincluding by he posal ser-
vice iselmdashinclude reducing delivery rom six days per week o ve and closing someo he ser vicersquos 31871 locaions Bu hese reorms alone would no solve he posal ser-
vicersquos nancial problems and in ac would grealy inconvenience cusomers who rely on
he posal service or vial mail and packages A number o sudies have been conduced
considering possible savings rom a reducion in delivery days Conclusions vary widely
A US Posal Service sudy in 2008 esimaed he ve-day week could save $35 bil-
lion annually wih no reducion in revenues Bu anoher sudy ha year by he Posal
Regulaory Commission he posal servicersquos regulaory overseer esimaed savings
o $193 billion annually wih a loss o $580 million in decreased sales And in 2010
he commission reviewed he 2008 US Posal Service sudy and ound ha he posalservice had overesimaed savings and underesimaed revenue losses Te revised ne
savings oaled $17 billion annually Tese are signican sums o be sure bu are no
nearly large enough o close he posal servicersquos budge gap
Te posal service has also proposed closing pos ofces in 3700 communiies across
he counrymdashmany o hem ruralmdashin order o cu coss Tese closures would likely
disproporionaely aec he elderly who may receive Social Securiy bene checks and
reiremen benes hrough he mail along wih vial prescripion drugs O he pos
ofces being considered or closure 80 percen are in rural areas where he povery rae
is higher han he naional average and one-hird are in areas wih limied or no accesso wired broadband Inerne
No only would closing hese ofces endanger vulnerable Americans and communiies
bu he savings are also minimal in he conex o he posal ser vicersquos operaing budge
Closing all 3830 pos ofces on he proposed closures lis would save abou $295 mil-
lion per year Tarsquos abou our-enhs o 1 percen o he posal servicersquos $70 billion in
annual expenses In a Reuers aricle ormer Posmaser General William Henderson
said hese savings amoun o ldquono even a drop in he bucke Te bucke wonrsquo ripplerdquo
And he planned closure o abou hal o he posal servicersquos 487 mail processing acili-
ies means he rs decline in delivery sandards in 40 years Under curren sandards
he posal service mus deliver rs-class mail wihin he coninenal Unied Saes
wihin hree days Aer he processing aciliy closures however delivery ime will
increase by wo o hree days Te eliminaion o Saurday delivery and he closing o
pos ofces in vulnerable communiies would exacerbae problems or hose Americans
who are mos relian on mail services
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 57
5 Center for American Progress | Principles for Postal Service Reform
Reforms should not endanger or degrade other government functions
Te posal serv ice does more han make sure ha Grandpa ges his choleserol
medicaion ou on he arm Te decennial Census or insance uses posal service
daabases o help build is lis o residences And o course he governmen sends a
good deal o mail Beween 1997 and 2007 he House o Represenaives alone sen
124 billion pieces o mass mail
Moreover he proposed closure o boh reail and soring aciliies has voing ofcials
around he counry concerned abou he November elecion Caliornia and Arizona vo-
ing ofcials are concerned abou he anicipaed delays in mail speed ha will resul rom
processing aciliy closures while he sae regisrar in he swing sae o Ohio is worried
abou securiy i mail-in ballos are sen o a processing aciliy across sae lines o be
sored And in Oregon he rs sae o require is residens o voe by mail he closure o
rural pos ofces will make i more difcul or hose residens o submi heir ballos a all
And in he even o ldquoman-made or naural disasers or naional emergenciesrdquo he posalservice remains a reliable mode o communicaion in reaching aeced areas as he US
Posal Service Ofce o he Inspecor General poins ou in is semiannual repor o
Congress Te repor also claims ha he posal service is uniquely siuaed o provide
secure servicesmdashaer all mail ampering is a ederal oense bu email ampering is
no ldquoTe Inerne was no consruced o ensure privacy validae paricipan ideniy
or aciliae nancial ransacionsrdquo he inspecor general wries ldquoA rused governmen
eniy migh bes provide services ha ensure privacy is proeced around medical
records daa collecion and condenial ransacionsrdquo
Reforms must not unnecessarily endanger middle-class jobs
Te posal service currenly employs 574000 career posal workers O hose hal a
million employees 21 percen are Arican American making he posal service one
o he larges single employers o minoriy workers And he posal service is also he
single-larges employer o veerans who make up 22 percen o he posal workorce
Some 49000 veerans employed by he posal servicemdashabou one-hird o he veerans
employed heremdashare disabled
In 2010 he posal service reduced oal work-hours by 75 millionmdasha number equal o
42800 ull-ime employees And since he recession began in 2007 he posal service
has eliminaed 110000 jobs while mainaining service qualiy Labor coss may be
he posal servicersquos bigges operaing expense bu harsquos o be expeced in a very labor-
inensive line o work Te posal service makes daily deliveries o seven o eigh imes
as many addresses as privae parcel delivery companies
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 67
6 Center for American Progress | Principles for Postal Service Reform
Te oal number o jobs a risk o being cu rom proposed reail and processing acili-
ies is unclear bu could reach 220000 Congress should be nding ways or he pos
ofce o be more compeiive no encouraging even more o he public-secor layos
ha have been exering a drag on our economic recovery
Reforms must address the retiree health benefit mandate
Firs-class mail volume has declined since scal year 2006 Te posal service responded
o his decline by doing one o he ew hings hey are auhorized o do wihou con-
gressional approval increasing posage raes When he recession hi he posal service
was able o keep mail revenues seady hrough hese rae increases and by working
wih is unions o cu more han 110000 jobs Irsquos imporan o noe however ha he
posal service canno raise posage raes higher han he Consumer Price Index wihou
approval rom he Posal Regulaory Commissionmdashand ha he commission declined
one such reques in he all o 2010 when he posal service atemped o raise posage
raes by 56 percen o help balance is books
Te posal servicersquos eors o respond o he recession however were complicaed by
he Posal Accounabiliy and Enhancemen Ac o 2006 Among oher provisions his
legislaion requires he posal service o preund 75 yearsrsquo worh o is uure reireesrsquo
healh benes in jus 10 years No oher company or ederal agency in he Unied Saes
is required o preund uure reiree benes in ull or in such a shor ime Tis legisla-
ive mandae coss he posal service a sunning $56 billion every year Bu he 10-year
paymen schedule was se primarily o make he legislaion budge-neural ldquoraher han
corresponding o acuarial requiremens or nancial condiions a he Posal Servicerdquo
according o a 2009 commitee repor rom he House Oversigh and GovernmenReorm Commitee
Wihou his legislaive requiremen o preund reiree healh benes he US Posal
Service would no have experienced operaing losses unil scal year 2009 insead o
beginning o run losses in scal year 2007 Even aer ha poin operaing losses would
have been relaively small and raceable o recession-relaed declines in mail volume
Te mandae o preund reiree healh benes is also he driver o he posal servicersquos
large deb burden Te posal servicersquos $15 billion credi line rom he US reasury
Deparmen was esablished in 1970 and was inended o allow he posal service o
make capial invesmens in keeping is aciliies and ee o vehicles up o dae In 2005
beore he Posal Accounabiliy and Enhancemen Ac he posal service had no ou-
sanding deb oday however i has racked up $132 billion in deb largely because o
rying o mee is sauory obligaions or healh benes or uure reirees according
o he Naional Associaion o Leter Carriers a rade union
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 77
7 Center for American Progress | Principles for Postal Service Reform
Reforms should give the postal service more flexibility not less
Te posal service by law is prohibied on is own rom
bull Reducing he number o residenial delivery daysbull Raising posage raes any higher han he Consumer Price Index bull Selling anyhing oher han ldquoposage samps samped paper cards envelopes phila-
elic services and ancillary iemsrdquobull Providing nonposal services such as documen noarizaion or check cashing
Liing some combinaion o hese legal resricionsmdashand reraining rom adding addi-
ional burdensome mandaesmdashwould allow he posal service o work wih is employ-
ees and wih he Posal Regulaory Commission o address is nancial problems while
remaining compeiive
Conclusion
Mos Americans arenrsquo as dependen on he posal service as are he residens o Supai
Arizona a he botom o he Grand Canyon Bu he posal service is he mos demon-
srable example o governmen working he way i ough o every day or every ciizen
For ar less han a dollar you can mail a birhday card a wedding inviaion or a leter o
your moher rom any par o he counry o any oher
You can send i rom a pos ofce rom a curbside mailbox on a busy sree or rom
your own ron door I will arrive in less han a week and i will arrive a he addresseersquos
home or ofce Irsquos an organizaional miracle ha has been made predicablemdashevenprosaicmdashby he posal servicersquos consisen proessionalism
Saving he posal service isnrsquo abou minimizing compeiion or privae-secor parcel
deliverers or abou saving a ew housand dollars a year by closing a low-grossing pos
ofce or even abou reorming benes or he posal servicersquos labor orce Saving he
posal service is abou he public good
In a series o congressional hearings on six-day delivery in 1977 and 1978 ormer Rep
imohy Wirh (D-CO) saed ha he service was a ldquosocial valuerdquo and ha cuting
service would worsen he opinions o hose who were ldquolosing some o heir aih in wha
governmen can do or hemrdquo
A a ime when disrus in governmen is a an all-ime high irsquos more imporan han
ever o give he governmen agency mos rused by he public o perorm well on heir
behal he exibiliy i needs o mee he economic demands o he 21s cenury
Kristina Costa is a Research Assistant at the Center for American Progress
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 27
2 Center for American Progress | Principles for Postal Service Reform
Background How did we get here
Te posal service is an independen ederal agency ha is supposed o und is opera-
ions hrough he sale o posage Te approximaely $100 million he posal service ges
rom Congress each year (o pay or ree mailing services or he blind and or overseas
voers) is jus one-enh o 1 percen o is $75 billion operaing budge
I he posal ser vice were a privae-secor company i would rank 29h in he Forune
500 Bu irsquos no only big irsquos also popular a a ime o mouning cynicism abou govern-
men A 2010 Pew Research Cener survey ound ha 83 percen o Americans gave
he posal service a ldquoavorablerdquo raing In he same survey avorabiliy raings or he wo
major poliical paries Congress and he governmen in general all reached record lows
Bu he posal service is under undeniable nancial pressure Mail volume has been
in decline or several years Aer reaching an all-ime high o 2131 billion mail pieces
handled by he posal service in 2006 volumes rs leveled o and hen plunged precipi-
ously during he recession Since 2008 mail volume has allen 177 percen
Sill he US Posal Service delivers 40 percen o he worldrsquos cards and leters
And some posal service observers believe he Grea Recessionmdashno email and he
Inernemdashis he bigges driving orce behind he recen decline in mail volume Tarsquos
no o say ha he posal service shouldnrsquo work o develop innovaive ways o earn
revenue and remain compeiive as he economy recovers Bu policymakers should
no ignore he role played by he mos severe economic downurn since he Grea
Depression when considering he posal ser vicersquos own nancial crisis les hey nd ldquosolu-
ionsrdquo ha do more harm han good
Three reform proposals
Tree legislaive ideas inroduced in Congress las year represen hree dieren approaches
o solving he posal servicersquos nancial problems Tese proposals are oulined below
The Issa proposal
Te Posal Reorm Ac sponsored by Rep Darrell Issa (R-CA) conains provisions o
allow he posal service o swich rom six- o ve-day residenial delivery and o make
adjusmens o rural delivery pracices Bu he bill ocuses mos o is atenion on clos-
ing budge gaps hrough changes o he posal workorce Te bill would creae wo new
oversigh organizaions or he posal service
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 37
3 Center for American Progress | Principles for Postal Service Reform
bull Te Commission on Posal Reorganizaion which would review plans or aciliy clo-
sures (a role already underaken by he independen Posal Regulaory Commission)bull A new solvency auhoriy which would have he abiliy o ldquorejec modiy or ermi-
nae one or more erms o condiions o an exising collecive bargaining agreemenrdquo
According o he Cener or American Progress Acion Fundrsquos David Madland his is
nohing more han hidden union busing and ignores he successul workorce reduc-ion agreemens ha posal service managemen and he posal workersrsquo unions reached
during he recession
The Sanders proposal
Te Posal Service Proecion Ac sponsored by Sen Bernard Sanders (I-V) looks
o close he posal servicersquos nancial gap in par by reunding overpaymens made
o he Posal Service Reiree Healh Benes Fund he Posal Service Fund and he
Employeesrsquo Compensaion Fund under he Federal Employeesrsquo Compensaion Ac Teposal service is esimaed o have overpaid pension unds by as much as $13 billion
Te bill would also encourage he posal service o nd addiional revenue sources by
esablishing crieria under which pos ofces can provide nonposal services such as
documen noarizaion and check cashing and by legalizing he mailing o wine and
beer by licensed wineries and breweries across sae lines Tese are among he many
services ha he pos ofce is legally prohibied rom oering
The Lieberman proposal
Te 21s Cenury Posal Service Ac sponsored by Sen Joseph Lieberman (I-C)
akes a dieren ack seeking o reduce he overall workorce o he posal service
while adjusing reiree-bene ormulas o close ha nancing gap Te Lieberman bill
auhorizes he posal service o oer buyous o employees wih he goal o reducing he
workorce by as many as 100000 workers over hree years Te bill also recalibraes he
amorizaion ormula or mandaed preunding o reiree healh benes bu does no
rescind he requiremen as Sen Sanders has advocaed
Te dierences beween hese hree bills highlighs why keeping he posal service
nancially viable during our nascen economic recovery while mainaining he high
qualiy o mail services Americans expec is a difcul pracical and poliical proposiion
Bu Congress should ake care o ensure ha new posal service legislaion helps solve
raher han creae problems or he posal service
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 47
4 Center for American Progress | Principles for Postal Service Reform
Principles for postal reform
Reforms must not endanger vulnerable Americans
Cos-saving ideas oaed requenly or he posal servicemdashincluding by he posal ser-
vice iselmdashinclude reducing delivery rom six days per week o ve and closing someo he ser vicersquos 31871 locaions Bu hese reorms alone would no solve he posal ser-
vicersquos nancial problems and in ac would grealy inconvenience cusomers who rely on
he posal service or vial mail and packages A number o sudies have been conduced
considering possible savings rom a reducion in delivery days Conclusions vary widely
A US Posal Service sudy in 2008 esimaed he ve-day week could save $35 bil-
lion annually wih no reducion in revenues Bu anoher sudy ha year by he Posal
Regulaory Commission he posal servicersquos regulaory overseer esimaed savings
o $193 billion annually wih a loss o $580 million in decreased sales And in 2010
he commission reviewed he 2008 US Posal Service sudy and ound ha he posalservice had overesimaed savings and underesimaed revenue losses Te revised ne
savings oaled $17 billion annually Tese are signican sums o be sure bu are no
nearly large enough o close he posal servicersquos budge gap
Te posal service has also proposed closing pos ofces in 3700 communiies across
he counrymdashmany o hem ruralmdashin order o cu coss Tese closures would likely
disproporionaely aec he elderly who may receive Social Securiy bene checks and
reiremen benes hrough he mail along wih vial prescripion drugs O he pos
ofces being considered or closure 80 percen are in rural areas where he povery rae
is higher han he naional average and one-hird are in areas wih limied or no accesso wired broadband Inerne
No only would closing hese ofces endanger vulnerable Americans and communiies
bu he savings are also minimal in he conex o he posal ser vicersquos operaing budge
Closing all 3830 pos ofces on he proposed closures lis would save abou $295 mil-
lion per year Tarsquos abou our-enhs o 1 percen o he posal servicersquos $70 billion in
annual expenses In a Reuers aricle ormer Posmaser General William Henderson
said hese savings amoun o ldquono even a drop in he bucke Te bucke wonrsquo ripplerdquo
And he planned closure o abou hal o he posal servicersquos 487 mail processing acili-
ies means he rs decline in delivery sandards in 40 years Under curren sandards
he posal service mus deliver rs-class mail wihin he coninenal Unied Saes
wihin hree days Aer he processing aciliy closures however delivery ime will
increase by wo o hree days Te eliminaion o Saurday delivery and he closing o
pos ofces in vulnerable communiies would exacerbae problems or hose Americans
who are mos relian on mail services
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 57
5 Center for American Progress | Principles for Postal Service Reform
Reforms should not endanger or degrade other government functions
Te posal serv ice does more han make sure ha Grandpa ges his choleserol
medicaion ou on he arm Te decennial Census or insance uses posal service
daabases o help build is lis o residences And o course he governmen sends a
good deal o mail Beween 1997 and 2007 he House o Represenaives alone sen
124 billion pieces o mass mail
Moreover he proposed closure o boh reail and soring aciliies has voing ofcials
around he counry concerned abou he November elecion Caliornia and Arizona vo-
ing ofcials are concerned abou he anicipaed delays in mail speed ha will resul rom
processing aciliy closures while he sae regisrar in he swing sae o Ohio is worried
abou securiy i mail-in ballos are sen o a processing aciliy across sae lines o be
sored And in Oregon he rs sae o require is residens o voe by mail he closure o
rural pos ofces will make i more difcul or hose residens o submi heir ballos a all
And in he even o ldquoman-made or naural disasers or naional emergenciesrdquo he posalservice remains a reliable mode o communicaion in reaching aeced areas as he US
Posal Service Ofce o he Inspecor General poins ou in is semiannual repor o
Congress Te repor also claims ha he posal service is uniquely siuaed o provide
secure servicesmdashaer all mail ampering is a ederal oense bu email ampering is
no ldquoTe Inerne was no consruced o ensure privacy validae paricipan ideniy
or aciliae nancial ransacionsrdquo he inspecor general wries ldquoA rused governmen
eniy migh bes provide services ha ensure privacy is proeced around medical
records daa collecion and condenial ransacionsrdquo
Reforms must not unnecessarily endanger middle-class jobs
Te posal service currenly employs 574000 career posal workers O hose hal a
million employees 21 percen are Arican American making he posal service one
o he larges single employers o minoriy workers And he posal service is also he
single-larges employer o veerans who make up 22 percen o he posal workorce
Some 49000 veerans employed by he posal servicemdashabou one-hird o he veerans
employed heremdashare disabled
In 2010 he posal service reduced oal work-hours by 75 millionmdasha number equal o
42800 ull-ime employees And since he recession began in 2007 he posal service
has eliminaed 110000 jobs while mainaining service qualiy Labor coss may be
he posal servicersquos bigges operaing expense bu harsquos o be expeced in a very labor-
inensive line o work Te posal service makes daily deliveries o seven o eigh imes
as many addresses as privae parcel delivery companies
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 67
6 Center for American Progress | Principles for Postal Service Reform
Te oal number o jobs a risk o being cu rom proposed reail and processing acili-
ies is unclear bu could reach 220000 Congress should be nding ways or he pos
ofce o be more compeiive no encouraging even more o he public-secor layos
ha have been exering a drag on our economic recovery
Reforms must address the retiree health benefit mandate
Firs-class mail volume has declined since scal year 2006 Te posal service responded
o his decline by doing one o he ew hings hey are auhorized o do wihou con-
gressional approval increasing posage raes When he recession hi he posal service
was able o keep mail revenues seady hrough hese rae increases and by working
wih is unions o cu more han 110000 jobs Irsquos imporan o noe however ha he
posal service canno raise posage raes higher han he Consumer Price Index wihou
approval rom he Posal Regulaory Commissionmdashand ha he commission declined
one such reques in he all o 2010 when he posal service atemped o raise posage
raes by 56 percen o help balance is books
Te posal servicersquos eors o respond o he recession however were complicaed by
he Posal Accounabiliy and Enhancemen Ac o 2006 Among oher provisions his
legislaion requires he posal service o preund 75 yearsrsquo worh o is uure reireesrsquo
healh benes in jus 10 years No oher company or ederal agency in he Unied Saes
is required o preund uure reiree benes in ull or in such a shor ime Tis legisla-
ive mandae coss he posal service a sunning $56 billion every year Bu he 10-year
paymen schedule was se primarily o make he legislaion budge-neural ldquoraher han
corresponding o acuarial requiremens or nancial condiions a he Posal Servicerdquo
according o a 2009 commitee repor rom he House Oversigh and GovernmenReorm Commitee
Wihou his legislaive requiremen o preund reiree healh benes he US Posal
Service would no have experienced operaing losses unil scal year 2009 insead o
beginning o run losses in scal year 2007 Even aer ha poin operaing losses would
have been relaively small and raceable o recession-relaed declines in mail volume
Te mandae o preund reiree healh benes is also he driver o he posal servicersquos
large deb burden Te posal servicersquos $15 billion credi line rom he US reasury
Deparmen was esablished in 1970 and was inended o allow he posal service o
make capial invesmens in keeping is aciliies and ee o vehicles up o dae In 2005
beore he Posal Accounabiliy and Enhancemen Ac he posal service had no ou-
sanding deb oday however i has racked up $132 billion in deb largely because o
rying o mee is sauory obligaions or healh benes or uure reirees according
o he Naional Associaion o Leter Carriers a rade union
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 77
7 Center for American Progress | Principles for Postal Service Reform
Reforms should give the postal service more flexibility not less
Te posal service by law is prohibied on is own rom
bull Reducing he number o residenial delivery daysbull Raising posage raes any higher han he Consumer Price Index bull Selling anyhing oher han ldquoposage samps samped paper cards envelopes phila-
elic services and ancillary iemsrdquobull Providing nonposal services such as documen noarizaion or check cashing
Liing some combinaion o hese legal resricionsmdashand reraining rom adding addi-
ional burdensome mandaesmdashwould allow he posal service o work wih is employ-
ees and wih he Posal Regulaory Commission o address is nancial problems while
remaining compeiive
Conclusion
Mos Americans arenrsquo as dependen on he posal service as are he residens o Supai
Arizona a he botom o he Grand Canyon Bu he posal service is he mos demon-
srable example o governmen working he way i ough o every day or every ciizen
For ar less han a dollar you can mail a birhday card a wedding inviaion or a leter o
your moher rom any par o he counry o any oher
You can send i rom a pos ofce rom a curbside mailbox on a busy sree or rom
your own ron door I will arrive in less han a week and i will arrive a he addresseersquos
home or ofce Irsquos an organizaional miracle ha has been made predicablemdashevenprosaicmdashby he posal servicersquos consisen proessionalism
Saving he posal service isnrsquo abou minimizing compeiion or privae-secor parcel
deliverers or abou saving a ew housand dollars a year by closing a low-grossing pos
ofce or even abou reorming benes or he posal servicersquos labor orce Saving he
posal service is abou he public good
In a series o congressional hearings on six-day delivery in 1977 and 1978 ormer Rep
imohy Wirh (D-CO) saed ha he service was a ldquosocial valuerdquo and ha cuting
service would worsen he opinions o hose who were ldquolosing some o heir aih in wha
governmen can do or hemrdquo
A a ime when disrus in governmen is a an all-ime high irsquos more imporan han
ever o give he governmen agency mos rused by he public o perorm well on heir
behal he exibiliy i needs o mee he economic demands o he 21s cenury
Kristina Costa is a Research Assistant at the Center for American Progress
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 37
3 Center for American Progress | Principles for Postal Service Reform
bull Te Commission on Posal Reorganizaion which would review plans or aciliy clo-
sures (a role already underaken by he independen Posal Regulaory Commission)bull A new solvency auhoriy which would have he abiliy o ldquorejec modiy or ermi-
nae one or more erms o condiions o an exising collecive bargaining agreemenrdquo
According o he Cener or American Progress Acion Fundrsquos David Madland his is
nohing more han hidden union busing and ignores he successul workorce reduc-ion agreemens ha posal service managemen and he posal workersrsquo unions reached
during he recession
The Sanders proposal
Te Posal Service Proecion Ac sponsored by Sen Bernard Sanders (I-V) looks
o close he posal servicersquos nancial gap in par by reunding overpaymens made
o he Posal Service Reiree Healh Benes Fund he Posal Service Fund and he
Employeesrsquo Compensaion Fund under he Federal Employeesrsquo Compensaion Ac Teposal service is esimaed o have overpaid pension unds by as much as $13 billion
Te bill would also encourage he posal service o nd addiional revenue sources by
esablishing crieria under which pos ofces can provide nonposal services such as
documen noarizaion and check cashing and by legalizing he mailing o wine and
beer by licensed wineries and breweries across sae lines Tese are among he many
services ha he pos ofce is legally prohibied rom oering
The Lieberman proposal
Te 21s Cenury Posal Service Ac sponsored by Sen Joseph Lieberman (I-C)
akes a dieren ack seeking o reduce he overall workorce o he posal service
while adjusing reiree-bene ormulas o close ha nancing gap Te Lieberman bill
auhorizes he posal service o oer buyous o employees wih he goal o reducing he
workorce by as many as 100000 workers over hree years Te bill also recalibraes he
amorizaion ormula or mandaed preunding o reiree healh benes bu does no
rescind he requiremen as Sen Sanders has advocaed
Te dierences beween hese hree bills highlighs why keeping he posal service
nancially viable during our nascen economic recovery while mainaining he high
qualiy o mail services Americans expec is a difcul pracical and poliical proposiion
Bu Congress should ake care o ensure ha new posal service legislaion helps solve
raher han creae problems or he posal service
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 47
4 Center for American Progress | Principles for Postal Service Reform
Principles for postal reform
Reforms must not endanger vulnerable Americans
Cos-saving ideas oaed requenly or he posal servicemdashincluding by he posal ser-
vice iselmdashinclude reducing delivery rom six days per week o ve and closing someo he ser vicersquos 31871 locaions Bu hese reorms alone would no solve he posal ser-
vicersquos nancial problems and in ac would grealy inconvenience cusomers who rely on
he posal service or vial mail and packages A number o sudies have been conduced
considering possible savings rom a reducion in delivery days Conclusions vary widely
A US Posal Service sudy in 2008 esimaed he ve-day week could save $35 bil-
lion annually wih no reducion in revenues Bu anoher sudy ha year by he Posal
Regulaory Commission he posal servicersquos regulaory overseer esimaed savings
o $193 billion annually wih a loss o $580 million in decreased sales And in 2010
he commission reviewed he 2008 US Posal Service sudy and ound ha he posalservice had overesimaed savings and underesimaed revenue losses Te revised ne
savings oaled $17 billion annually Tese are signican sums o be sure bu are no
nearly large enough o close he posal servicersquos budge gap
Te posal service has also proposed closing pos ofces in 3700 communiies across
he counrymdashmany o hem ruralmdashin order o cu coss Tese closures would likely
disproporionaely aec he elderly who may receive Social Securiy bene checks and
reiremen benes hrough he mail along wih vial prescripion drugs O he pos
ofces being considered or closure 80 percen are in rural areas where he povery rae
is higher han he naional average and one-hird are in areas wih limied or no accesso wired broadband Inerne
No only would closing hese ofces endanger vulnerable Americans and communiies
bu he savings are also minimal in he conex o he posal ser vicersquos operaing budge
Closing all 3830 pos ofces on he proposed closures lis would save abou $295 mil-
lion per year Tarsquos abou our-enhs o 1 percen o he posal servicersquos $70 billion in
annual expenses In a Reuers aricle ormer Posmaser General William Henderson
said hese savings amoun o ldquono even a drop in he bucke Te bucke wonrsquo ripplerdquo
And he planned closure o abou hal o he posal servicersquos 487 mail processing acili-
ies means he rs decline in delivery sandards in 40 years Under curren sandards
he posal service mus deliver rs-class mail wihin he coninenal Unied Saes
wihin hree days Aer he processing aciliy closures however delivery ime will
increase by wo o hree days Te eliminaion o Saurday delivery and he closing o
pos ofces in vulnerable communiies would exacerbae problems or hose Americans
who are mos relian on mail services
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 57
5 Center for American Progress | Principles for Postal Service Reform
Reforms should not endanger or degrade other government functions
Te posal serv ice does more han make sure ha Grandpa ges his choleserol
medicaion ou on he arm Te decennial Census or insance uses posal service
daabases o help build is lis o residences And o course he governmen sends a
good deal o mail Beween 1997 and 2007 he House o Represenaives alone sen
124 billion pieces o mass mail
Moreover he proposed closure o boh reail and soring aciliies has voing ofcials
around he counry concerned abou he November elecion Caliornia and Arizona vo-
ing ofcials are concerned abou he anicipaed delays in mail speed ha will resul rom
processing aciliy closures while he sae regisrar in he swing sae o Ohio is worried
abou securiy i mail-in ballos are sen o a processing aciliy across sae lines o be
sored And in Oregon he rs sae o require is residens o voe by mail he closure o
rural pos ofces will make i more difcul or hose residens o submi heir ballos a all
And in he even o ldquoman-made or naural disasers or naional emergenciesrdquo he posalservice remains a reliable mode o communicaion in reaching aeced areas as he US
Posal Service Ofce o he Inspecor General poins ou in is semiannual repor o
Congress Te repor also claims ha he posal service is uniquely siuaed o provide
secure servicesmdashaer all mail ampering is a ederal oense bu email ampering is
no ldquoTe Inerne was no consruced o ensure privacy validae paricipan ideniy
or aciliae nancial ransacionsrdquo he inspecor general wries ldquoA rused governmen
eniy migh bes provide services ha ensure privacy is proeced around medical
records daa collecion and condenial ransacionsrdquo
Reforms must not unnecessarily endanger middle-class jobs
Te posal service currenly employs 574000 career posal workers O hose hal a
million employees 21 percen are Arican American making he posal service one
o he larges single employers o minoriy workers And he posal service is also he
single-larges employer o veerans who make up 22 percen o he posal workorce
Some 49000 veerans employed by he posal servicemdashabou one-hird o he veerans
employed heremdashare disabled
In 2010 he posal service reduced oal work-hours by 75 millionmdasha number equal o
42800 ull-ime employees And since he recession began in 2007 he posal service
has eliminaed 110000 jobs while mainaining service qualiy Labor coss may be
he posal servicersquos bigges operaing expense bu harsquos o be expeced in a very labor-
inensive line o work Te posal service makes daily deliveries o seven o eigh imes
as many addresses as privae parcel delivery companies
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 67
6 Center for American Progress | Principles for Postal Service Reform
Te oal number o jobs a risk o being cu rom proposed reail and processing acili-
ies is unclear bu could reach 220000 Congress should be nding ways or he pos
ofce o be more compeiive no encouraging even more o he public-secor layos
ha have been exering a drag on our economic recovery
Reforms must address the retiree health benefit mandate
Firs-class mail volume has declined since scal year 2006 Te posal service responded
o his decline by doing one o he ew hings hey are auhorized o do wihou con-
gressional approval increasing posage raes When he recession hi he posal service
was able o keep mail revenues seady hrough hese rae increases and by working
wih is unions o cu more han 110000 jobs Irsquos imporan o noe however ha he
posal service canno raise posage raes higher han he Consumer Price Index wihou
approval rom he Posal Regulaory Commissionmdashand ha he commission declined
one such reques in he all o 2010 when he posal service atemped o raise posage
raes by 56 percen o help balance is books
Te posal servicersquos eors o respond o he recession however were complicaed by
he Posal Accounabiliy and Enhancemen Ac o 2006 Among oher provisions his
legislaion requires he posal service o preund 75 yearsrsquo worh o is uure reireesrsquo
healh benes in jus 10 years No oher company or ederal agency in he Unied Saes
is required o preund uure reiree benes in ull or in such a shor ime Tis legisla-
ive mandae coss he posal service a sunning $56 billion every year Bu he 10-year
paymen schedule was se primarily o make he legislaion budge-neural ldquoraher han
corresponding o acuarial requiremens or nancial condiions a he Posal Servicerdquo
according o a 2009 commitee repor rom he House Oversigh and GovernmenReorm Commitee
Wihou his legislaive requiremen o preund reiree healh benes he US Posal
Service would no have experienced operaing losses unil scal year 2009 insead o
beginning o run losses in scal year 2007 Even aer ha poin operaing losses would
have been relaively small and raceable o recession-relaed declines in mail volume
Te mandae o preund reiree healh benes is also he driver o he posal servicersquos
large deb burden Te posal servicersquos $15 billion credi line rom he US reasury
Deparmen was esablished in 1970 and was inended o allow he posal service o
make capial invesmens in keeping is aciliies and ee o vehicles up o dae In 2005
beore he Posal Accounabiliy and Enhancemen Ac he posal service had no ou-
sanding deb oday however i has racked up $132 billion in deb largely because o
rying o mee is sauory obligaions or healh benes or uure reirees according
o he Naional Associaion o Leter Carriers a rade union
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 77
7 Center for American Progress | Principles for Postal Service Reform
Reforms should give the postal service more flexibility not less
Te posal service by law is prohibied on is own rom
bull Reducing he number o residenial delivery daysbull Raising posage raes any higher han he Consumer Price Index bull Selling anyhing oher han ldquoposage samps samped paper cards envelopes phila-
elic services and ancillary iemsrdquobull Providing nonposal services such as documen noarizaion or check cashing
Liing some combinaion o hese legal resricionsmdashand reraining rom adding addi-
ional burdensome mandaesmdashwould allow he posal service o work wih is employ-
ees and wih he Posal Regulaory Commission o address is nancial problems while
remaining compeiive
Conclusion
Mos Americans arenrsquo as dependen on he posal service as are he residens o Supai
Arizona a he botom o he Grand Canyon Bu he posal service is he mos demon-
srable example o governmen working he way i ough o every day or every ciizen
For ar less han a dollar you can mail a birhday card a wedding inviaion or a leter o
your moher rom any par o he counry o any oher
You can send i rom a pos ofce rom a curbside mailbox on a busy sree or rom
your own ron door I will arrive in less han a week and i will arrive a he addresseersquos
home or ofce Irsquos an organizaional miracle ha has been made predicablemdashevenprosaicmdashby he posal servicersquos consisen proessionalism
Saving he posal service isnrsquo abou minimizing compeiion or privae-secor parcel
deliverers or abou saving a ew housand dollars a year by closing a low-grossing pos
ofce or even abou reorming benes or he posal servicersquos labor orce Saving he
posal service is abou he public good
In a series o congressional hearings on six-day delivery in 1977 and 1978 ormer Rep
imohy Wirh (D-CO) saed ha he service was a ldquosocial valuerdquo and ha cuting
service would worsen he opinions o hose who were ldquolosing some o heir aih in wha
governmen can do or hemrdquo
A a ime when disrus in governmen is a an all-ime high irsquos more imporan han
ever o give he governmen agency mos rused by he public o perorm well on heir
behal he exibiliy i needs o mee he economic demands o he 21s cenury
Kristina Costa is a Research Assistant at the Center for American Progress
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 47
4 Center for American Progress | Principles for Postal Service Reform
Principles for postal reform
Reforms must not endanger vulnerable Americans
Cos-saving ideas oaed requenly or he posal servicemdashincluding by he posal ser-
vice iselmdashinclude reducing delivery rom six days per week o ve and closing someo he ser vicersquos 31871 locaions Bu hese reorms alone would no solve he posal ser-
vicersquos nancial problems and in ac would grealy inconvenience cusomers who rely on
he posal service or vial mail and packages A number o sudies have been conduced
considering possible savings rom a reducion in delivery days Conclusions vary widely
A US Posal Service sudy in 2008 esimaed he ve-day week could save $35 bil-
lion annually wih no reducion in revenues Bu anoher sudy ha year by he Posal
Regulaory Commission he posal servicersquos regulaory overseer esimaed savings
o $193 billion annually wih a loss o $580 million in decreased sales And in 2010
he commission reviewed he 2008 US Posal Service sudy and ound ha he posalservice had overesimaed savings and underesimaed revenue losses Te revised ne
savings oaled $17 billion annually Tese are signican sums o be sure bu are no
nearly large enough o close he posal servicersquos budge gap
Te posal service has also proposed closing pos ofces in 3700 communiies across
he counrymdashmany o hem ruralmdashin order o cu coss Tese closures would likely
disproporionaely aec he elderly who may receive Social Securiy bene checks and
reiremen benes hrough he mail along wih vial prescripion drugs O he pos
ofces being considered or closure 80 percen are in rural areas where he povery rae
is higher han he naional average and one-hird are in areas wih limied or no accesso wired broadband Inerne
No only would closing hese ofces endanger vulnerable Americans and communiies
bu he savings are also minimal in he conex o he posal ser vicersquos operaing budge
Closing all 3830 pos ofces on he proposed closures lis would save abou $295 mil-
lion per year Tarsquos abou our-enhs o 1 percen o he posal servicersquos $70 billion in
annual expenses In a Reuers aricle ormer Posmaser General William Henderson
said hese savings amoun o ldquono even a drop in he bucke Te bucke wonrsquo ripplerdquo
And he planned closure o abou hal o he posal servicersquos 487 mail processing acili-
ies means he rs decline in delivery sandards in 40 years Under curren sandards
he posal service mus deliver rs-class mail wihin he coninenal Unied Saes
wihin hree days Aer he processing aciliy closures however delivery ime will
increase by wo o hree days Te eliminaion o Saurday delivery and he closing o
pos ofces in vulnerable communiies would exacerbae problems or hose Americans
who are mos relian on mail services
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 57
5 Center for American Progress | Principles for Postal Service Reform
Reforms should not endanger or degrade other government functions
Te posal serv ice does more han make sure ha Grandpa ges his choleserol
medicaion ou on he arm Te decennial Census or insance uses posal service
daabases o help build is lis o residences And o course he governmen sends a
good deal o mail Beween 1997 and 2007 he House o Represenaives alone sen
124 billion pieces o mass mail
Moreover he proposed closure o boh reail and soring aciliies has voing ofcials
around he counry concerned abou he November elecion Caliornia and Arizona vo-
ing ofcials are concerned abou he anicipaed delays in mail speed ha will resul rom
processing aciliy closures while he sae regisrar in he swing sae o Ohio is worried
abou securiy i mail-in ballos are sen o a processing aciliy across sae lines o be
sored And in Oregon he rs sae o require is residens o voe by mail he closure o
rural pos ofces will make i more difcul or hose residens o submi heir ballos a all
And in he even o ldquoman-made or naural disasers or naional emergenciesrdquo he posalservice remains a reliable mode o communicaion in reaching aeced areas as he US
Posal Service Ofce o he Inspecor General poins ou in is semiannual repor o
Congress Te repor also claims ha he posal service is uniquely siuaed o provide
secure servicesmdashaer all mail ampering is a ederal oense bu email ampering is
no ldquoTe Inerne was no consruced o ensure privacy validae paricipan ideniy
or aciliae nancial ransacionsrdquo he inspecor general wries ldquoA rused governmen
eniy migh bes provide services ha ensure privacy is proeced around medical
records daa collecion and condenial ransacionsrdquo
Reforms must not unnecessarily endanger middle-class jobs
Te posal service currenly employs 574000 career posal workers O hose hal a
million employees 21 percen are Arican American making he posal service one
o he larges single employers o minoriy workers And he posal service is also he
single-larges employer o veerans who make up 22 percen o he posal workorce
Some 49000 veerans employed by he posal servicemdashabou one-hird o he veerans
employed heremdashare disabled
In 2010 he posal service reduced oal work-hours by 75 millionmdasha number equal o
42800 ull-ime employees And since he recession began in 2007 he posal service
has eliminaed 110000 jobs while mainaining service qualiy Labor coss may be
he posal servicersquos bigges operaing expense bu harsquos o be expeced in a very labor-
inensive line o work Te posal service makes daily deliveries o seven o eigh imes
as many addresses as privae parcel delivery companies
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 67
6 Center for American Progress | Principles for Postal Service Reform
Te oal number o jobs a risk o being cu rom proposed reail and processing acili-
ies is unclear bu could reach 220000 Congress should be nding ways or he pos
ofce o be more compeiive no encouraging even more o he public-secor layos
ha have been exering a drag on our economic recovery
Reforms must address the retiree health benefit mandate
Firs-class mail volume has declined since scal year 2006 Te posal service responded
o his decline by doing one o he ew hings hey are auhorized o do wihou con-
gressional approval increasing posage raes When he recession hi he posal service
was able o keep mail revenues seady hrough hese rae increases and by working
wih is unions o cu more han 110000 jobs Irsquos imporan o noe however ha he
posal service canno raise posage raes higher han he Consumer Price Index wihou
approval rom he Posal Regulaory Commissionmdashand ha he commission declined
one such reques in he all o 2010 when he posal service atemped o raise posage
raes by 56 percen o help balance is books
Te posal servicersquos eors o respond o he recession however were complicaed by
he Posal Accounabiliy and Enhancemen Ac o 2006 Among oher provisions his
legislaion requires he posal service o preund 75 yearsrsquo worh o is uure reireesrsquo
healh benes in jus 10 years No oher company or ederal agency in he Unied Saes
is required o preund uure reiree benes in ull or in such a shor ime Tis legisla-
ive mandae coss he posal service a sunning $56 billion every year Bu he 10-year
paymen schedule was se primarily o make he legislaion budge-neural ldquoraher han
corresponding o acuarial requiremens or nancial condiions a he Posal Servicerdquo
according o a 2009 commitee repor rom he House Oversigh and GovernmenReorm Commitee
Wihou his legislaive requiremen o preund reiree healh benes he US Posal
Service would no have experienced operaing losses unil scal year 2009 insead o
beginning o run losses in scal year 2007 Even aer ha poin operaing losses would
have been relaively small and raceable o recession-relaed declines in mail volume
Te mandae o preund reiree healh benes is also he driver o he posal servicersquos
large deb burden Te posal servicersquos $15 billion credi line rom he US reasury
Deparmen was esablished in 1970 and was inended o allow he posal service o
make capial invesmens in keeping is aciliies and ee o vehicles up o dae In 2005
beore he Posal Accounabiliy and Enhancemen Ac he posal service had no ou-
sanding deb oday however i has racked up $132 billion in deb largely because o
rying o mee is sauory obligaions or healh benes or uure reirees according
o he Naional Associaion o Leter Carriers a rade union
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 77
7 Center for American Progress | Principles for Postal Service Reform
Reforms should give the postal service more flexibility not less
Te posal service by law is prohibied on is own rom
bull Reducing he number o residenial delivery daysbull Raising posage raes any higher han he Consumer Price Index bull Selling anyhing oher han ldquoposage samps samped paper cards envelopes phila-
elic services and ancillary iemsrdquobull Providing nonposal services such as documen noarizaion or check cashing
Liing some combinaion o hese legal resricionsmdashand reraining rom adding addi-
ional burdensome mandaesmdashwould allow he posal service o work wih is employ-
ees and wih he Posal Regulaory Commission o address is nancial problems while
remaining compeiive
Conclusion
Mos Americans arenrsquo as dependen on he posal service as are he residens o Supai
Arizona a he botom o he Grand Canyon Bu he posal service is he mos demon-
srable example o governmen working he way i ough o every day or every ciizen
For ar less han a dollar you can mail a birhday card a wedding inviaion or a leter o
your moher rom any par o he counry o any oher
You can send i rom a pos ofce rom a curbside mailbox on a busy sree or rom
your own ron door I will arrive in less han a week and i will arrive a he addresseersquos
home or ofce Irsquos an organizaional miracle ha has been made predicablemdashevenprosaicmdashby he posal servicersquos consisen proessionalism
Saving he posal service isnrsquo abou minimizing compeiion or privae-secor parcel
deliverers or abou saving a ew housand dollars a year by closing a low-grossing pos
ofce or even abou reorming benes or he posal servicersquos labor orce Saving he
posal service is abou he public good
In a series o congressional hearings on six-day delivery in 1977 and 1978 ormer Rep
imohy Wirh (D-CO) saed ha he service was a ldquosocial valuerdquo and ha cuting
service would worsen he opinions o hose who were ldquolosing some o heir aih in wha
governmen can do or hemrdquo
A a ime when disrus in governmen is a an all-ime high irsquos more imporan han
ever o give he governmen agency mos rused by he public o perorm well on heir
behal he exibiliy i needs o mee he economic demands o he 21s cenury
Kristina Costa is a Research Assistant at the Center for American Progress
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 57
5 Center for American Progress | Principles for Postal Service Reform
Reforms should not endanger or degrade other government functions
Te posal serv ice does more han make sure ha Grandpa ges his choleserol
medicaion ou on he arm Te decennial Census or insance uses posal service
daabases o help build is lis o residences And o course he governmen sends a
good deal o mail Beween 1997 and 2007 he House o Represenaives alone sen
124 billion pieces o mass mail
Moreover he proposed closure o boh reail and soring aciliies has voing ofcials
around he counry concerned abou he November elecion Caliornia and Arizona vo-
ing ofcials are concerned abou he anicipaed delays in mail speed ha will resul rom
processing aciliy closures while he sae regisrar in he swing sae o Ohio is worried
abou securiy i mail-in ballos are sen o a processing aciliy across sae lines o be
sored And in Oregon he rs sae o require is residens o voe by mail he closure o
rural pos ofces will make i more difcul or hose residens o submi heir ballos a all
And in he even o ldquoman-made or naural disasers or naional emergenciesrdquo he posalservice remains a reliable mode o communicaion in reaching aeced areas as he US
Posal Service Ofce o he Inspecor General poins ou in is semiannual repor o
Congress Te repor also claims ha he posal service is uniquely siuaed o provide
secure servicesmdashaer all mail ampering is a ederal oense bu email ampering is
no ldquoTe Inerne was no consruced o ensure privacy validae paricipan ideniy
or aciliae nancial ransacionsrdquo he inspecor general wries ldquoA rused governmen
eniy migh bes provide services ha ensure privacy is proeced around medical
records daa collecion and condenial ransacionsrdquo
Reforms must not unnecessarily endanger middle-class jobs
Te posal service currenly employs 574000 career posal workers O hose hal a
million employees 21 percen are Arican American making he posal service one
o he larges single employers o minoriy workers And he posal service is also he
single-larges employer o veerans who make up 22 percen o he posal workorce
Some 49000 veerans employed by he posal servicemdashabou one-hird o he veerans
employed heremdashare disabled
In 2010 he posal service reduced oal work-hours by 75 millionmdasha number equal o
42800 ull-ime employees And since he recession began in 2007 he posal service
has eliminaed 110000 jobs while mainaining service qualiy Labor coss may be
he posal servicersquos bigges operaing expense bu harsquos o be expeced in a very labor-
inensive line o work Te posal service makes daily deliveries o seven o eigh imes
as many addresses as privae parcel delivery companies
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 67
6 Center for American Progress | Principles for Postal Service Reform
Te oal number o jobs a risk o being cu rom proposed reail and processing acili-
ies is unclear bu could reach 220000 Congress should be nding ways or he pos
ofce o be more compeiive no encouraging even more o he public-secor layos
ha have been exering a drag on our economic recovery
Reforms must address the retiree health benefit mandate
Firs-class mail volume has declined since scal year 2006 Te posal service responded
o his decline by doing one o he ew hings hey are auhorized o do wihou con-
gressional approval increasing posage raes When he recession hi he posal service
was able o keep mail revenues seady hrough hese rae increases and by working
wih is unions o cu more han 110000 jobs Irsquos imporan o noe however ha he
posal service canno raise posage raes higher han he Consumer Price Index wihou
approval rom he Posal Regulaory Commissionmdashand ha he commission declined
one such reques in he all o 2010 when he posal service atemped o raise posage
raes by 56 percen o help balance is books
Te posal servicersquos eors o respond o he recession however were complicaed by
he Posal Accounabiliy and Enhancemen Ac o 2006 Among oher provisions his
legislaion requires he posal service o preund 75 yearsrsquo worh o is uure reireesrsquo
healh benes in jus 10 years No oher company or ederal agency in he Unied Saes
is required o preund uure reiree benes in ull or in such a shor ime Tis legisla-
ive mandae coss he posal service a sunning $56 billion every year Bu he 10-year
paymen schedule was se primarily o make he legislaion budge-neural ldquoraher han
corresponding o acuarial requiremens or nancial condiions a he Posal Servicerdquo
according o a 2009 commitee repor rom he House Oversigh and GovernmenReorm Commitee
Wihou his legislaive requiremen o preund reiree healh benes he US Posal
Service would no have experienced operaing losses unil scal year 2009 insead o
beginning o run losses in scal year 2007 Even aer ha poin operaing losses would
have been relaively small and raceable o recession-relaed declines in mail volume
Te mandae o preund reiree healh benes is also he driver o he posal servicersquos
large deb burden Te posal servicersquos $15 billion credi line rom he US reasury
Deparmen was esablished in 1970 and was inended o allow he posal service o
make capial invesmens in keeping is aciliies and ee o vehicles up o dae In 2005
beore he Posal Accounabiliy and Enhancemen Ac he posal service had no ou-
sanding deb oday however i has racked up $132 billion in deb largely because o
rying o mee is sauory obligaions or healh benes or uure reirees according
o he Naional Associaion o Leter Carriers a rade union
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 77
7 Center for American Progress | Principles for Postal Service Reform
Reforms should give the postal service more flexibility not less
Te posal service by law is prohibied on is own rom
bull Reducing he number o residenial delivery daysbull Raising posage raes any higher han he Consumer Price Index bull Selling anyhing oher han ldquoposage samps samped paper cards envelopes phila-
elic services and ancillary iemsrdquobull Providing nonposal services such as documen noarizaion or check cashing
Liing some combinaion o hese legal resricionsmdashand reraining rom adding addi-
ional burdensome mandaesmdashwould allow he posal service o work wih is employ-
ees and wih he Posal Regulaory Commission o address is nancial problems while
remaining compeiive
Conclusion
Mos Americans arenrsquo as dependen on he posal service as are he residens o Supai
Arizona a he botom o he Grand Canyon Bu he posal service is he mos demon-
srable example o governmen working he way i ough o every day or every ciizen
For ar less han a dollar you can mail a birhday card a wedding inviaion or a leter o
your moher rom any par o he counry o any oher
You can send i rom a pos ofce rom a curbside mailbox on a busy sree or rom
your own ron door I will arrive in less han a week and i will arrive a he addresseersquos
home or ofce Irsquos an organizaional miracle ha has been made predicablemdashevenprosaicmdashby he posal servicersquos consisen proessionalism
Saving he posal service isnrsquo abou minimizing compeiion or privae-secor parcel
deliverers or abou saving a ew housand dollars a year by closing a low-grossing pos
ofce or even abou reorming benes or he posal servicersquos labor orce Saving he
posal service is abou he public good
In a series o congressional hearings on six-day delivery in 1977 and 1978 ormer Rep
imohy Wirh (D-CO) saed ha he service was a ldquosocial valuerdquo and ha cuting
service would worsen he opinions o hose who were ldquolosing some o heir aih in wha
governmen can do or hemrdquo
A a ime when disrus in governmen is a an all-ime high irsquos more imporan han
ever o give he governmen agency mos rused by he public o perorm well on heir
behal he exibiliy i needs o mee he economic demands o he 21s cenury
Kristina Costa is a Research Assistant at the Center for American Progress
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 67
6 Center for American Progress | Principles for Postal Service Reform
Te oal number o jobs a risk o being cu rom proposed reail and processing acili-
ies is unclear bu could reach 220000 Congress should be nding ways or he pos
ofce o be more compeiive no encouraging even more o he public-secor layos
ha have been exering a drag on our economic recovery
Reforms must address the retiree health benefit mandate
Firs-class mail volume has declined since scal year 2006 Te posal service responded
o his decline by doing one o he ew hings hey are auhorized o do wihou con-
gressional approval increasing posage raes When he recession hi he posal service
was able o keep mail revenues seady hrough hese rae increases and by working
wih is unions o cu more han 110000 jobs Irsquos imporan o noe however ha he
posal service canno raise posage raes higher han he Consumer Price Index wihou
approval rom he Posal Regulaory Commissionmdashand ha he commission declined
one such reques in he all o 2010 when he posal service atemped o raise posage
raes by 56 percen o help balance is books
Te posal servicersquos eors o respond o he recession however were complicaed by
he Posal Accounabiliy and Enhancemen Ac o 2006 Among oher provisions his
legislaion requires he posal service o preund 75 yearsrsquo worh o is uure reireesrsquo
healh benes in jus 10 years No oher company or ederal agency in he Unied Saes
is required o preund uure reiree benes in ull or in such a shor ime Tis legisla-
ive mandae coss he posal service a sunning $56 billion every year Bu he 10-year
paymen schedule was se primarily o make he legislaion budge-neural ldquoraher han
corresponding o acuarial requiremens or nancial condiions a he Posal Servicerdquo
according o a 2009 commitee repor rom he House Oversigh and GovernmenReorm Commitee
Wihou his legislaive requiremen o preund reiree healh benes he US Posal
Service would no have experienced operaing losses unil scal year 2009 insead o
beginning o run losses in scal year 2007 Even aer ha poin operaing losses would
have been relaively small and raceable o recession-relaed declines in mail volume
Te mandae o preund reiree healh benes is also he driver o he posal servicersquos
large deb burden Te posal servicersquos $15 billion credi line rom he US reasury
Deparmen was esablished in 1970 and was inended o allow he posal service o
make capial invesmens in keeping is aciliies and ee o vehicles up o dae In 2005
beore he Posal Accounabiliy and Enhancemen Ac he posal service had no ou-
sanding deb oday however i has racked up $132 billion in deb largely because o
rying o mee is sauory obligaions or healh benes or uure reirees according
o he Naional Associaion o Leter Carriers a rade union
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 77
7 Center for American Progress | Principles for Postal Service Reform
Reforms should give the postal service more flexibility not less
Te posal service by law is prohibied on is own rom
bull Reducing he number o residenial delivery daysbull Raising posage raes any higher han he Consumer Price Index bull Selling anyhing oher han ldquoposage samps samped paper cards envelopes phila-
elic services and ancillary iemsrdquobull Providing nonposal services such as documen noarizaion or check cashing
Liing some combinaion o hese legal resricionsmdashand reraining rom adding addi-
ional burdensome mandaesmdashwould allow he posal service o work wih is employ-
ees and wih he Posal Regulaory Commission o address is nancial problems while
remaining compeiive
Conclusion
Mos Americans arenrsquo as dependen on he posal service as are he residens o Supai
Arizona a he botom o he Grand Canyon Bu he posal service is he mos demon-
srable example o governmen working he way i ough o every day or every ciizen
For ar less han a dollar you can mail a birhday card a wedding inviaion or a leter o
your moher rom any par o he counry o any oher
You can send i rom a pos ofce rom a curbside mailbox on a busy sree or rom
your own ron door I will arrive in less han a week and i will arrive a he addresseersquos
home or ofce Irsquos an organizaional miracle ha has been made predicablemdashevenprosaicmdashby he posal servicersquos consisen proessionalism
Saving he posal service isnrsquo abou minimizing compeiion or privae-secor parcel
deliverers or abou saving a ew housand dollars a year by closing a low-grossing pos
ofce or even abou reorming benes or he posal servicersquos labor orce Saving he
posal service is abou he public good
In a series o congressional hearings on six-day delivery in 1977 and 1978 ormer Rep
imohy Wirh (D-CO) saed ha he service was a ldquosocial valuerdquo and ha cuting
service would worsen he opinions o hose who were ldquolosing some o heir aih in wha
governmen can do or hemrdquo
A a ime when disrus in governmen is a an all-ime high irsquos more imporan han
ever o give he governmen agency mos rused by he public o perorm well on heir
behal he exibiliy i needs o mee he economic demands o he 21s cenury
Kristina Costa is a Research Assistant at the Center for American Progress
822019 Principles for Postal Service Reform
httpslidepdfcomreaderfullprinciples-for-postal-service-reform 77
7 Center for American Progress | Principles for Postal Service Reform
Reforms should give the postal service more flexibility not less
Te posal service by law is prohibied on is own rom
bull Reducing he number o residenial delivery daysbull Raising posage raes any higher han he Consumer Price Index bull Selling anyhing oher han ldquoposage samps samped paper cards envelopes phila-
elic services and ancillary iemsrdquobull Providing nonposal services such as documen noarizaion or check cashing
Liing some combinaion o hese legal resricionsmdashand reraining rom adding addi-
ional burdensome mandaesmdashwould allow he posal service o work wih is employ-
ees and wih he Posal Regulaory Commission o address is nancial problems while
remaining compeiive
Conclusion
Mos Americans arenrsquo as dependen on he posal service as are he residens o Supai
Arizona a he botom o he Grand Canyon Bu he posal service is he mos demon-
srable example o governmen working he way i ough o every day or every ciizen
For ar less han a dollar you can mail a birhday card a wedding inviaion or a leter o
your moher rom any par o he counry o any oher
You can send i rom a pos ofce rom a curbside mailbox on a busy sree or rom
your own ron door I will arrive in less han a week and i will arrive a he addresseersquos
home or ofce Irsquos an organizaional miracle ha has been made predicablemdashevenprosaicmdashby he posal servicersquos consisen proessionalism
Saving he posal service isnrsquo abou minimizing compeiion or privae-secor parcel
deliverers or abou saving a ew housand dollars a year by closing a low-grossing pos
ofce or even abou reorming benes or he posal servicersquos labor orce Saving he
posal service is abou he public good
In a series o congressional hearings on six-day delivery in 1977 and 1978 ormer Rep
imohy Wirh (D-CO) saed ha he service was a ldquosocial valuerdquo and ha cuting
service would worsen he opinions o hose who were ldquolosing some o heir aih in wha
governmen can do or hemrdquo
A a ime when disrus in governmen is a an all-ime high irsquos more imporan han
ever o give he governmen agency mos rused by he public o perorm well on heir
behal he exibiliy i needs o mee he economic demands o he 21s cenury
Kristina Costa is a Research Assistant at the Center for American Progress
