[Congressional Record Volume 150, Number 138 (Tuesday, December 7, 2004)]
[Extensions of Remarks]
[Page E2185]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       THE NEED FOR POSTAL REFORM

                                 ______
                                 

                             HON. TOM DAVIS

                              of virginia

                    in the house of representatives

                       Tuesday, December 7, 2004

  Mr. TOM DAVIS of Virginia. Mr. Speaker, I rise today to call my 
colleagues' attention to an urgent issue that we must address in the 
opening months of the next Congress.
  Early next spring, the Postal Service will file for a rate increase, 
to be implemented in 2006. Unless Congress acts, that rate increase 
will be one of the largest in history--at least 15 percent, or 6 cents 
on a First Class stamp. That will cripple an industry already in 
trouble, and reverberate through our entire economy.
  It would be irresponsible and reckless for us to sit back and do 
nothing.
  The Postal Service is the center of a $900 billion industry, 
employing 9 million Americans in such diverse fields as manufacturing, 
advertising, publishing, and finance. This industry comprises 8.5 
percent of the Gross Domestic Product.
  The cost of doing nothing will be steep, for the Postal Service, for 
the 9 million Americans whose jobs rely on the mail, and for every 
American who sends a birthday card, pays a bill, or orders something 
from a catalog or online.
  Reforming the Postal Service is a crucial responsibility. The Postal 
Service operates under a rigid, 30-year-old legal structure that does 
not take into account the technological advances of the past decades. 
It is saddled with nearly $70 billion in retiree health costs, worker's 
comp claims and pension payments. Each year, the labor and 
infrastructure costs facing the Postal Service rise, while the volume 
of mail continues to fall. This is a ``death spiral'' that can only be 
reversed by Congressional action.
  Let me make clear what will happen if we fail to act.
  A failure to act is the equivalent of a back-door tax on every sector 
of the American economy.
  A small business that now spends $5,000 a year on postage would be 
hit with a nearly $1,000 rate increase. And an industry like financial 
services would get slammed with an increase of over $600 million in 
postage costs annually.
  Even though we're trying to postpone Internet taxation, a failure to 
act would raise the cost of online purchases, because consumers will 
pay more for shipping and handling.
  Overall, the American public and American businesses will waste over 
$20 billion in unnecessary payments to the Postal Service over the next 
decade.
  This does not have to happen. We have the framework for responsible, 
comprehensive Postal Reform in the form of legislation that has been 
approved unanimously by my committee, the Government Reform Committee, 
and by the Senate Governmental Affairs Committee.
  This legislation will force the Postal Service to act more like a 
business, while also resolving two issues related to the Postal Civil 
Service Retirement System Funding Reform Act of 2003. This act placed 
an unusual burden on the Postal Service, making it the only major 
agency in the government responsible for funding the military portion 
of its employee retiree benefits. The Act also required the Postal 
Service to place into escrow any money saved through the legislation--
and I believe we should free this money, to allow the Service to make 
some cost-reducing and productivity-enhancing capital improvements.
  I have worked with the Government Reform Committee's ranking minority 
member, Henry Waxman, as well as Representatives John McHugh and Danny 
Davis to craft legislation that will allow the Postal Service and the 
industry that relies on it to survive well into this century.
  I urge my colleagues to come back next year ready to pass meaningful 
Postal Reform. There are critics who will say the bill costs too much. 
I say the cost of not acting is what we really cannot afford.

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