It's no secret that USPS is losing money - we see it each time its financial report is published. To compensate, USPS has streamlined almost everything within its power, including plans to close half the sorting centers across the country. Even with these changes, the red ink persists. Postmaster General testified in July that the only way to truly save the Post Office is to pass legislation that will enable $20 billion in annual savings by 2017.
For its part, Congress seems content to let USPS teeter on the edge of this financial chasm and give lip service to necessary postal reform. Defaulting on $11.1 billion in retiree payments and having maxed out it borrowing limit of $15 billion has not provided sufficient motivation for Congress. With only a couple days of operating cash on hand, it appears USPS will have to run out of money and be unable to make payroll before Congress will get something onto the president's desk.
Postal reform acts have been proposed in both the House and the Senate, though neither provides the necessary $20 billion in annual savings, and minimal progress has been made in getting them to the floor for a general vote. Let's take a look at what both candidate bills look like as Congress is recessed for the summer:
House Bill HR 2748, Proposed by Darrell Issa, R-CAThis partisan bill is mostly concerned with limiting taxpayer impact, should any deficits continue. Its provisions are not popular with postal unions, including:
· Allowing 5-day mail and 6-day parcel delivery
· Amortizing retiree pre-funding requirements from 2015 to 2056
· Replacing the Board of Governors with a full-time committee
· Migrating to-the-door delivery to curbside and cluster boxes
· Eliminating special rates for political parties and phasing out some special rates that charge less than delivery costs
· Balancing employee payment and benefits with other federal workers
· Eliminating no-layoff clauses in union contracts
· Enabling new products and services including ad space on vehicles and facilities, a chief innovation officer and higher caps on market tests
This bill is much less controversial when compared to Issa's 2012 postal legislation. However, if you do the math, the combination of all these provisions does not meet the $20 billion sniff test the Postmaster General proposed. Additionally, it kicks the pre-funding can further down the road. The partisan nature of its terms gives it little chance beyond the House. However, the bill has already gone through initial markup and is ready to be called for a vote soon.
Senate Bill S 1486, Proposed by Tom Carper, D-DE and Tom Coburn, R-OKThis nonpartisan bill is still getting worked on in committee, so the details are still fuzzy. This bill is more sympathetic to the postal union, and includes:
· Restructuring retirement payment expectations, and returning any surplus to USPS
· Eliminating the retiree health pre-funding mandate
· Allowing qualifying employees to enroll in Medicare
· Postponing any service standard changes or plant closings for two years
· Allowing 5-day mail and 6-day parcel delivery, and eventual elimination of Saturday delivery
· Shifting new addresses to curbside and cluster box delivery, and encouraging existing to-the-door locations to shift as well
· Enabling new products and services including offering state and local government services, delivery of beer, wine and spirits and additional services that take advantage of existing resources
The Senate was able to pass a more comprehensive bill last year, and this year's iteration brings it more in line with the House proposal. Though it is being marketed as nonpartisan, there are many senators on both sides of the aisle that don't like it. There is pressure from the left to maintain service standards and Saturday delivery, while raising rates. Like the House bill, it does not provide the $20 billion in savings needed to fully balance the postal checkbook.
What's Next If the Senate bill is taken to the floor, and both bills pass, a committee will have the difficult task of reconciling the two bills. Due to the dissimilarity between the bills, the final bill will likely lack some of the more effective strategies included in each of them. The final result will likely not stop the red ink. If the committee comes to an agreement, the final bill is sent to the president for his signature.
While the process is straightforward, the actual chances of action are dim. With only months left this year, Congress has yet to act on some of the more basic required legislation. Plus, with a major election in 2014, it's unlikely anything will happen until USPS runs out of operating cash.
What can the mailing industry do? For Congress, visibility is the key. Contact your state representatives and senators. Invite them to tour your facility. Explain to
them how your business relies on USPS. Let them know how important postal stability is to you, their taxpayer.
For its part, Congress seems content to let USPS teeter on the edge of this financial chasm and give lip service to necessary postal reform. Defaulting on $11.1 billion in retiree payments and having maxed out it borrowing limit of $15 billion has not provided sufficient motivation for Congress. With only a couple days of operating cash on hand, it appears USPS will have to run out of money and be unable to make payroll before Congress will get something onto the president's desk.
Postal reform acts have been proposed in both the House and the Senate, though neither provides the necessary $20 billion in annual savings, and minimal progress has been made in getting them to the floor for a general vote. Let's take a look at what both candidate bills look like as Congress is recessed for the summer:
House Bill HR 2748, Proposed by Darrell Issa, R-CAThis partisan bill is mostly concerned with limiting taxpayer impact, should any deficits continue. Its provisions are not popular with postal unions, including:
· Allowing 5-day mail and 6-day parcel delivery
· Amortizing retiree pre-funding requirements from 2015 to 2056
· Replacing the Board of Governors with a full-time committee
· Migrating to-the-door delivery to curbside and cluster boxes
· Eliminating special rates for political parties and phasing out some special rates that charge less than delivery costs
· Balancing employee payment and benefits with other federal workers
· Eliminating no-layoff clauses in union contracts
· Enabling new products and services including ad space on vehicles and facilities, a chief innovation officer and higher caps on market tests
This bill is much less controversial when compared to Issa's 2012 postal legislation. However, if you do the math, the combination of all these provisions does not meet the $20 billion sniff test the Postmaster General proposed. Additionally, it kicks the pre-funding can further down the road. The partisan nature of its terms gives it little chance beyond the House. However, the bill has already gone through initial markup and is ready to be called for a vote soon.
Senate Bill S 1486, Proposed by Tom Carper, D-DE and Tom Coburn, R-OKThis nonpartisan bill is still getting worked on in committee, so the details are still fuzzy. This bill is more sympathetic to the postal union, and includes:
· Restructuring retirement payment expectations, and returning any surplus to USPS
· Eliminating the retiree health pre-funding mandate
· Allowing qualifying employees to enroll in Medicare
· Postponing any service standard changes or plant closings for two years
· Allowing 5-day mail and 6-day parcel delivery, and eventual elimination of Saturday delivery
· Shifting new addresses to curbside and cluster box delivery, and encouraging existing to-the-door locations to shift as well
· Enabling new products and services including offering state and local government services, delivery of beer, wine and spirits and additional services that take advantage of existing resources
The Senate was able to pass a more comprehensive bill last year, and this year's iteration brings it more in line with the House proposal. Though it is being marketed as nonpartisan, there are many senators on both sides of the aisle that don't like it. There is pressure from the left to maintain service standards and Saturday delivery, while raising rates. Like the House bill, it does not provide the $20 billion in savings needed to fully balance the postal checkbook.
What's Next If the Senate bill is taken to the floor, and both bills pass, a committee will have the difficult task of reconciling the two bills. Due to the dissimilarity between the bills, the final bill will likely lack some of the more effective strategies included in each of them. The final result will likely not stop the red ink. If the committee comes to an agreement, the final bill is sent to the president for his signature.
While the process is straightforward, the actual chances of action are dim. With only months left this year, Congress has yet to act on some of the more basic required legislation. Plus, with a major election in 2014, it's unlikely anything will happen until USPS runs out of operating cash.
What can the mailing industry do? For Congress, visibility is the key. Contact your state representatives and senators. Invite them to tour your facility. Explain to
them how your business relies on USPS. Let them know how important postal stability is to you, their taxpayer.
