[Congressional Record Volume 148, Number 98 (Thursday, July 18, 2002)]
[Senate]
[Pages S7036-S7039]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS:
  S. 2754. A bill to establish a Presidential Commission on the United 
States Postal Service; to the Committee on Governmental Affairs.
  Ms. COLLINS. Mr. President, I rise today to introduce the ``United 
States Postal Service Commission Act of 2002.'' This legislation will 
establish a Commission to examine the challenges facing the Postal 
Service and develop

[[Page S7039]]

solutions to ensure its long term viability and increased efficiency.
  The Postal Service's problems have reached a near crisis level. In 
2000, the Postal Service lost nearly $200 million, while in 2001, this 
loss ballooned to $1.68 billion. Losses are projected to be $1.35 
billion this year, despite the $675 million in appropriations from 
Congress to cover the unanticipated costs associated with the September 
11 attacks and the anthrax incidents. The Postal Service is mandated by 
law to break even on its operating expenses and its capital needs, both 
of which continue to grow.
  The Postal Service is also fast approaching its $15 billion statutory 
borrowing limit. Given its recent history of increasing rather than 
paying down its debt, increasing the Postal Service's debt ceiling is 
not the answer. In addition, the Postal Service's long term liabilities 
are enormous, to the tune of nearly $6 billion for Workers Compensation 
claims, a staggering $32 billion in retirement costs and perhaps as 
much as $45 billion to cover retiree health care costs. Meanwhile, on 
June 30, consumers experienced a third postal rate increase in just 18 
months.
  How could the Postal Service have landed in such dire straits? The 
Postal Service's problems stem from many causes. For example, the 
overall growth rate of mail has been declining since 1997, and first 
class mail volumes actually have declined over the past four years. 
This is particularly significant, as first class mail accounts for 48 
percent of total mail volume. In addition, revenues from first class 
mail cover more than two-thirds of institutional costs, such as post 
offices. Shortfalls must be made up by decreasing costs, increasing 
volumes in other categories of mail or by increasing postal rates.
  Some of this declining volume can be attributed to the increasing 
forms of electronic communication, particularly the Internet, which has 
revolutionized the way we communicate and transact business. For 
example, while financial statements, bills and bill payments constitute 
about half of first class mail revenue, or about $17 billion annually, 
electronic bill payment is quickly becoming a major means of doing 
business. It is estimated that 75 percent of banks will provide online 
banking services by 2003. This is in addition to other competing 
methods of communication such as faxes and telephones. In addition, 
filing tax returns, receiving Social Security payments, and many other 
transactions are also available electronically.
  The Postal Service also faces significant labor-related costs. Indeed 
nearly 80 percent of its expenses are related to compensation and 
benefits. By comparison, 56 percent of FedEx's expenses and 42 percent 
of UPS's expenses are related to compensation and benefits.
  The need to preserve a viable Postal Service is clear. Americans rely 
on affordable, reliable and universal mail delivery as their primary 
means of communication. The Postal Service delivers more than 200 
billion pieces of mail each year to nearly 140 million addresses, which 
accounts for more than 40 percent of the world's mail. Moreover, 1.7 
million new delivery points are added each year--roughly the equivalent 
of adding the number of addresses in Chicago. More than seven million 
Americans visit post offices each day.
  In States with large rural areas, such as Maine, it is vital that 
postal services remain in place. If the Postal Service were no longer 
obligated to provide universal service and deliver mail to every 
customer, six days a week, the affordable communication link upon which 
many Americans rely would be jeopardized. Most commercial enterprises 
would find it uneconomical, if not impossible, to deliver mail and 
packages to these areas at rates that the Postal Service has been 
offering.
  In addition to providing a critical service to consumers, the Postal 
Service is the eleventh largest enterprise in the Nation with $66 
billion in annual revenues. This is more than Microsoft, McDonald's and 
Coca Cola combined. While the Postal Service itself employs more 
than 700,000 career employees, it is also the linchpin of a $900 
billion mailing industry that employs nine million Americans in fields 
as diverse as direct mailing, printing and paper production.

  Affordable postal rates are vital to the economic health of many 
companies, especially magazines, catalog houses and the service 
providers they use. The June 2002 rate hike alone represents a ten 
percent increase for periodicals, and a nine percent increase for 
catalogs. It is estimated that the combined effect of the past three 
rate increases, totaling 22 percent over just 18 months, have cost the 
magazine industry about $400 million.
  In May I met with a group of about twenty Maine businessmen and women 
involved in the mailing industry, who described for me the impact that 
rising postal rates have on their businesses. One magazine publisher 
told me that postage represents ten percent of her costs. I was amazed 
to hear that one of the catalog busineses pays more for postage a year 
than it pays to any one of the companies that supply the raw materials 
for its products. It was also startling to hear from one printer that 
his postage costs have doubled over the last ten years.
  Most of the people I met with are small business owners, and there 
are millions more across the country, all grappling with the same 
effects of rapidly rising postage costs.
  At the request of the Senate Governmental Affairs Committee and House 
Committee on Government Reform, the Postal Service produced a 
comprehensive Transformation Plan, which it presented to Congress in 
April. The Plan addresses general measures that the Postal Service 
believes it needs to take to ensure its survival, but it fails to lay 
out specific steps the Postal Service will take and a timeline for 
action. It is also unclear whether these measures will result in the 
cost savings necessary to ensure the long-term survival of the Postal 
Service.
  Many attempts have been made to reform the Postal Service over the 
years. My colleagues in the House of Representatives have tried for 
nearly eight years to pass postal reform legislation, but to no avail. 
Stakeholders have widely diverging views on what shape postal reform 
should take, if any. This lack of consensus on how or whether to deal 
with divisive issues has led only to stalemates in Congress.
  To take a fresh look at these difficult issues, I rise today to 
introduce legislation establishing a Presidential Postal Commission 
charged with examining the problems that the Postal Service faces, and 
developing specific recommendations and legislative proposals that 
Congress and the Postal Service can implement. Precedent exists for 
such a commission. In the late 1960s, the Kappel Commission was formed 
to resolve the crisis situation that the former Postal Department then 
found itself in, train cars of undelivered mail, strikes, and a host of 
other problems. The Kappel Commission's efforts laid the groundwork for 
the Postal Service we have today, which has functioned admirably for 
many years but is now in serious trouble.
  Mindful of the body of work that has been done in this area by my 
colleagues in the House and Senate, by the General Accounting Office, 
by the Postal Service itself and by others, I intend that this 
commission have a short life of one year, during which it will carry 
out its study and produce legislative proposals for consideration by 
the Administration and the Congress.
  Finally, I intend that the commission consider all relevant aspects 
of the Postal Service. Everything should be put on the table and 
evaluated. We need to ensure that the Postal Service will stand up to 
the challenges it is facing today and will face tomorrow.
  These and many more issues must be examined in depth, if we are to 
preserve this vital service upon which so many Americans rely for 
communication and for their livelihood. The Postal Service has 
successfully overcome numerous difficulties over its 226-year history, 
and has continued to deliver the mail faithfully. Yet it has reached a 
critical juncture and once again, it is time for a thorough evaluation 
of the Postal Service's operations and requirements.
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