The Congressional Research Service has published yet another report on the Postal Service. This time the report outlines the Postal Service's financial problem and suggests some possible issues for the Congress to address. The report is entitled "The U.S. Postal Service's Financial Condition: Overview and Issues for Congress."
The report notes that the Postal Service operated since 1971 as a self-supporting agency but recently has experienced "significant financial challenges."âÂ With sizable losses in FY 2007, 2008 and 2009, the General Accountability Office placed the Postal Service back on its "list of high-risk areas needing attention by the Congress and executive branch."
Given the continued uncertain outlook the report provides some issues for Congress to consider. It says, "A number of ideas for incremental reforms have been put forth that would improve the USPS's financial condition in the short term so that it might continue as a self-funding, government agency."
These issues include the following:
- Altering postage rates: The CSRS says since the Postal Regulatory Commission has found that the Postal Service carries some types of mail at postage rates that are below their costs, and law permits the Postal Service to increase rates at a rate no higher than the CPI, the Congress may consider providing the Postal Service "additional pricing flexibilities that would enable it to recover more revenue."
- Offering more non-postal products and services: The Postal Service has asked for the authority to "increase its revenues by offering a broader range of nonpostal products and service, although it has not specified which ones. Congress may wish to consider whether the USPS ought to enter into non-postal business lines."
- Reducing the Postal Service retiree health benefit obligation and payments: With disagreement about the size of the Postal Service's future retiree health benefits obligation, the Congress may wish to reassess the payment schedule and total obligation. It may also wish to extend the current payment schedule beyond FY2016.
- Reducing the Postal Service contributions toward employee health premiums and life insurance: Noting that President Obama included in his initial FY2010 budget a proposal to require USPS employees to pay the same percentage towards health premiums and life insurance as other federal workers (currently, USPS employees pay 17% of health care premium costs and 0% of life insurance premiums, while other federal employees pay 27% and 67%, respectively), such policy would save the Postal Service $752 million in FY2010 and $9.5 billion between FY2010 and FY2019.
- Reducing the USPS's retail and non-retail facilities: Since excess capacity has grown with unprecedented declines of mail volume, "Congress may wish to consider providing the USPS with additional authority to reduce its facilities"âÂ or consider legislation introduced by Senator Tom Carper (D-Delaware) in 2003 to establish a Postal Network Optimization Commission to reduce facilities in a manner similar to the Base Closing Commission.
- Reduce mail delivery from six to five days per week: Although there are varying estimates on possible savings from reducing delivery days ($1.9 billion to $3.5 billion), no studies suggest that costs would increase. The Postal Service is currently conducting a study that will be released in early 2010, and Congress may wish to examine the issue.
- Increasing the USPS's powers to control labor costs: Noting that critics argue the Postal Service has "very few authorities to control its employment costs, which make up about 80% of total operating costs,"âÂ the Congress may wish to "consider measures that would provide the USPS with increased means to control its long-term labor costs." A provision of S. 1507, which was introduced in the Senate last year, would have required arbitrators "in rendering collective bargaining decisions to consider the financial condition of the Postal Service."âÂ Further, Congress "may wish to assess the USPS's efforts to offer employees early retirement and consider whether the USPS has sufficient authorities to further reduce its workforce."
Tony Conway is Executive Director of the Alliance of Nonprofit Mailers (www.nonprofitmailers.org).