[Congressional Record Volume 156, Number 156 (Thursday, December 2, 2010)]
[Senate]
[Pages S8397-S8399]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS:
  S. 4000. A bill to provide for improvements to the United States 
Postal Service, and for other purposes; to the Committee on Homeland 
Security and Governmental Affairs.
  Ms. COLLINS. Mr. President, I rise today to introduce The U.S. Postal 
Service Improvements Act of 2010. This bill would help the U.S. Postal 
Service regain its financial footing as it adapts to the era of 
increasingly digital communications.
  The storied history of the Postal Service predates our Constitution. 
In 1775, the Second Continental Congress appointed Benjamin Franklin as 
the first Postmaster General and directed the creation of a line of 
postsfrom Falmouth in New England to Savannah in Georgia. The 
Constitution also gives Congress the power to establish post offices 
and post roads.
  Today, the Postal Service is the linchpin of a $1 trillion mailing 
industry that employs approximately 7.5 million Americans in fields as 
diverse as direct mail, printing, catalog companies, paper 
manufacturing, and financial services.
  Postal Service employees deliver mail 6 days a week to hundreds of 
millions of households and businesses. From our largest cities to our 
smallest towns, from the Hawaiian Islands to Alaskan reservations, the 
Postal Service is a vital part of our national communications network 
and an icon of American culture.
  But the financial state of the Postal Service is abysmal. The numbers 
are grim: the Postal Service recently announced that it lost $8.5 
billion in fiscal year 2010. The Great Recession, high operating costs, 
and the continuing diversion of mail to electronic alternatives have 
challenged the Postal Services ability to remain financially viable.
  Faced with this much red ink, the Postal Service must reinvent 
itself. It must increase revenues by increasing its value to its 
customers and by becoming more cost effective.
  Unfortunately, many of the solutions the Postal Service has proposed 
would only aggravate its problems. Filing for enormous rate increases, 
pursuing significant service reductions including elimination of 
Saturday mail delivery and seeking relief from funding its liabilities 
are not viable long-term solutions to the challenges confronting the 
Postal Service. These changes will drive more customers to less 
expensive, digital alternatives. That downturn in customers will 
further erode mail volume and accelerate a death spiral for the Postal 
Service.
  The Postal Service must chart a new course in this digital age. It 
must adopt a customer-focused culture. It must see the changing 
communications landscape as an opportunity.
  The Postal Accountability and Enhancement Act of 2006, which I 
authored, provides the foundation for these long-term changes, but the 
Postal Service has been slow to take advantage of some of the 
flexibilities afforded by that law. And, to be fair, the Postal Service 
has encountered problems not of its making, such as a severe recession.

[[Page S8398]]

  The legislation that I introduce today would help the Postal Service 
achieve financial stability and light the way to future cost savings 
without undermining customer service.
  One area the legislation would help address is the more than $50 
billion that the Postal Regulatory Commission estimates the Postal 
Service has overpaid into the Civil Service Retirement System, CSRS, 
and the nearly $3 billion it has overpaid into the Federal Employees 
Retirement System pension fund. It is simply unfair both to the Postal 
Service and its customers not to refund these overpayments.
  To address these inequities, the bill would allow the Postal Service 
to access amounts that it has overpaid into these pension funds. The 
Postal Service must be permitted to use these funds to address other 
financial obligations, like its payments for future retiree health 
benefits and unfunded workers compensation liabilities and for repaying 
its existing debt.
  I have pressed the Office of Personnel Management, OPM, to change its 
calculation method for Postal Service payments into the CSRS fund 
consistent with the 2006 Postal Reform law. OPM officials, however, 
stubbornly refuse to change this methodology or even to admit that the 
2006 postal law permits them to do so. This has created a bureaucratic 
standoff that is unfair to the Postal Service. The OPM holds the life 
preserver it could help rescue the Postal Service, but it simply 
refuses to throw it.
  This legislation would direct the OPM to exercise its existing 
authority under the 2006 postal reform law and to revise its 
methodology for calculating the Postal Services obligations to the CSRS 
pension fund. Once OPM exercises this authority, my legislation would 
allow the Postal Service to use any resulting overpayments to cover its 
annual payments into the Retiree Health Benefits Fund, rather than 
having to wait until after September 30, 2015, to access the CSRS 
overpayment.
  Additionally, the legislation would allow the Postal Service to 
access the nearly $3 billion it has overpaid into the Federal Employees 
Retirement System, FERS, pension fund. The legislation would grant OPM 
this authority by adopting language, similar to section 802(c) of the 
2006 postal reform law, that allows OPM to recalculate the methodology 
governing Postal Service payments into the FERS pension fund.
  As with the CSRS overpayment, the Postal Service would be permitted 
to use the FERS overpayment to meet its statutory obligations to the 
Retiree Health Benefits Fund. These fund transfers would greatly 
improve the Postal Services financial condition.
  If the CSRS and FERS overpayment amounts are sufficient to fully fund 
the Postal Services obligations to the Retiree Health Benefits Fund, 
this legislation would allow the Postal Service to pay its workers 
compensation liabilities, which top $1 billion annually. The Postal 
Service may also choose to use these funds to pay down its existing 
debt, which currently is $12 billion.
  Second, the legislation would improve the Postal Services contracting 
practices and help prevent the kind of ethical violations recently 
uncovered by the Postal Service inspector general.
  Several months ago, I asked the Postal Service inspector general to 
review the Postal Services contracting policies. The findings of these 
inspector general audits were shocking. The IG found stunning evidence 
of costly contract mismanagement, ethical lapses, and financial waste.
  In its review of the Postal Services contracting policies, the IG 
discovered no-bid contracts and examples of apparent cronyism. The 
Postal Services contract management did not protect it from waste, 
fraud, and abuse. Indeed, it left the door wide open.
  As a result, the Postal Service could not even identify how many 
contracts were awarded without competition. Of the no-bid contracts the 
IG reviewed, 35 percent lacked justification.
  In one of the more egregious examples of waste and abuse, the IG 
discovered that more than 2,700 contracts had been awarded to former 
employees since 1991. Looking at the past 3 years, the IG found that 
359 were awarded as no-bid contracts. And 17 of those noncompetitive 
contracts went to career executives within 1 year of their separation 
from the Postal Service.
  Additionally, some former executives were brought back at nearly 
twice their former pay to advise newly hired executives--an outrageous 
practice that the IG said raised serious ethical questions, hurt 
employee morale, and tarnished the Postal Services public image. In one 
example, an executive received a $260,000 no-bid contract in July 2009, 
just 2 months after retiring. The purpose: to train his successor.
  My legislation would help remedy many of the contracting issues the 
IG identified. Specifically, the bill would direct the Postmaster 
General to establish a competition advocate, responsible for reviewing 
and approving justifications for noncompetitive purchases and for 
tracking the level of agency competition. The competition advocate also 
would be required to submit an annual report on Postal Service 
procurement to the Postmaster General, the Board of Governors, the 
Postal Regulatory Commission, and the Congress.
  To improve transparency and accountability, the bill also would 
require the Postal Service to publish justifications of noncompetitive 
contracts greater than $150,000 on its Web Site. This transparency 
would improve the Postal Services contracting practices and promote 
competition.
  To resolve the ethical issues documented by the IG, the bill would 
limit procurement officials from contracting with closely associated 
entities. It also would require the Postal Services ethics official to 
review any ethics concerns that the contracting office identifies prior 
to awarding a contract.
  Third, the legislation includes several provisions that would enhance 
efficiency and reduce costs. The Postal Service has made efforts to 
reduce costs over the past several years. But more must be done.
  One area where improvements can be made is in the consolidation of 
area and district offices. The IG found that the Postal Services 
regional structure--eight area offices and 74 district offices costing 
approximately $1.5 billion in fiscal year 2009--has significant room 
for consolidation. My bill would require the Postal Service to create a 
comprehensive strategic plan to guide consolidation efforts--a road map 
for future savings.
  The bill would also require the Postal Service to develop a plan to 
increase its presence in retail facilities, or co-locate, to better 
serve customers. Before co-location decisions could be made, however, 
the bill would direct the Postal Service to weigh the impact of any 
decision on small communities and rural areas. Moreover, the Postal 
Service would be required to solicit community input before making 
decisions about co-location and to ensure that co-location does not 
diminish the quality of service.
  Fourth, the bill includes a provision that would require the 
arbitrator to consider the Postal Services financial condition when 
rendering decisions about collective bargaining agreements. This 
logical provision would allow critical financial information to be 
weighed as a factor in contract negotiations.
  Finally, the bill would reduce workforce-related costs government-
wide by converting retirement eligible postal and federal employees on 
workers compensation to retirement when they reach retirement age. This 
is a commonsense change that would significantly reduce expenses that 
both the Postal Service and the Federal Government cannot afford to 
sustain.
  In fiscal year 2010, the Department of Labor paid approximately $2.7 
billion to employees on workers compensation. This includes 
approximately $1 billion in workers compensation benefits to postal 
employees. More than 8,600 of postal employees covered by workers 
compensation are over the age of 55. The Department of Labor indicates 
that Federal employees across the government are receiving workers 
compensation benefits into their 80s, 90s, and even 100s. At the Postal 
Service alone, more than 1,000 employees currently receiving workers 
compensation benefits are 80 years or older. Incredibly, 132 of these 
individuals are 90 years of age and older and there are three who are 
98.
  The Postal Service is at a crossroads; it must choose the correct 
path. It must take steps toward a bright future.

[[Page S8399]]

It must reject the path of severe service reductions and huge rate 
hikes, which will only alienate customers.
  The Postal Service must reinvent itself. It must embrace changes to 
revitalize its business model, enabling it to attract and keep 
customers. The U.S. Postal Service Improvements Act of 2010 will help 
spark new life into this institution, helping it evolve and maintain 
its vital role in American society.
                                 ______