[Congressional Record Volume 157, Number 194 (Friday, December 16, 2011)]
[Senate]
[Pages S8735-S8736]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. AKAKA:
  S. 2014. A bill to reform the United States Postal Service, and for 
other purposes; to the Committee on Homeland Security and Governmental 
Affairs.
  Mr. AKAKA. Mr. President, today I am introducing the Postal 
Investment Act of 2011 which lays out many ideas to help strengthen the 
United States Postal Service through investment and innovation.
  For many years, I have been an advocate for the Postal Service, its 
workers, and importantly, postal customers. The Postal Service 
represents a multi-billion dollar industry on which all Americans rely 
for delivery of mail and packages. Unfortunately, in recent years, the 
downturn in the overall economy has negatively impacted the postal 
business, exacerbating a decline in the mail because of electronic 
diversion.
  The 21st Century Postal Service Act, S. 1789, passed in November by 
the Homeland Security and Governmental Affairs Committee, contains many 
needed postal reforms and sensible compromises. Unfortunately, that 
bill also contained an unrelated measure reducing benefits for disabled 
and injured federal workers. As Chairman of the Federal Workforce 
Subcommittee, this issue concerned me enough that I had to vote against 
reporting the bill to the full Senate. However, I did think the bill 
contained important provisions that will help the Postal Service and I 
look forward to further debate. I am introducing the Postal Investment 
Act to add to that conversation. While this bill is not a comprehensive 
approach that can rescue the Postal Service on its own, it represents 
several new ideas that have not yet been debated.
  Since 2006, we have required the Postal Service to pay roughly $5 
billion per year in to an account to prefund its retiree health benefit 
liability. This is a payment that no other agency, and few private 
sector companies, must make. While prefunding this liability was a 
worthy goal, and it addressed an accounting problem in the Postal 
Accountability and Enhancement Act of 2006, it is crippling the Postal 
Service financially. The core of the Postal Investment Act would 
restructure the retirement health benefit prefunding requirement and 
allow for the funds set aside against the future liability to be 
invested in a diverse mix of government and non-government securities, 
instead of only in government securities as is now the case.
  There are promising precedents for investing funds in this way in the 
Federal Government. In 2001, we passed the Railroad Retirement and 
Survivors' Improvement Act, which created a trust fund to invest 
railroad employee retirement assets in non-government securities. 
Assets of the Pension Benefit Guaranty Corporation also are invested in 
a diversified manner. Even in the turbulent economic times of the past 
few years, these funds have seen healthy returns on average, at a much 
higher rate than government securities alone.
  I want to emphasize that the funds invested are there to cover a 
future liability to provide benefits to workers, some of whom have not 
been hired yet. Because of the long time horizon and significant assets 
of this fund, I believe that diversifying its investment would mean 
positive growth for the fund over time, and would bring it in line with 
many private sector retirement accounts. If we want the Postal Service 
to act more like a business, we could start by allowing it similar 
flexibility.
  In addition to investing the fund, my bill would also suspend 
payments to the prefunding account in any years in which the Postal 
Service does not have the profits to invest. Unfortunately, under 
current law, the fund which was set up to insure against future default 
of the Postal Service is the very thing putting the Postal Service on 
the brink of default. I believe this new approach is a responsible way 
forward, which also recognizes the legitimate goal of prefunding this 
liability over a longer term.
  Just as importantly, the Postal Service needs more flexibility in its 
business model to innovate. My bill contains several provisions to 
accelerate innovation in the Postal Service's products. Many of these 
are based on recommendations provided to Congress in a Postal 
Regulatory Commission, PRC, report released earlier this year. The bill 
would allow for pricing flexibilities for increased premium services 
subject to performance requirements. It would also explicitly allow the 
Postal Service, through the PRC, to create new classes of mail to meet 
evolving customer demands. For instance, there may be a market for a 
product with the speed of first class mail, but with none of the 
additional services that are part of first class. The bill also 
encourages the further development of experimental products to find new 
sources of revenue.
  In order to create more accountability for product innovation, the 
bill would require the Postmaster General to designate a Chief Product 
Innovation officer to come up with new ideas and keep the public better 
informed of what the Postal Service is doing to find new products and 
services. My bill would also require more focus on retaining revenues 
for existing products by reducing uncollected postage.
  Finally, my bill contains several provisions related to the postal 
workforce. Like several other proposals introduced already, the bill 
would allow the Postal Service access to excess payments it has made 
over the years to the Federal Employee Retirement System. It would use 
those funds first to offer voluntary retirement incentives to employees 
to help right-size the workforce.

[[Page S8736]]

  The bill also contains a provision which was developed after we were 
informed that postal workers may not be taking full advantage of the 
benefits of Medicare after they reach the age of eligibility. The 21st 
Century Postal Service Act originally contained a provision which would 
have shifted costs from the Postal Service to the Medicare program and 
postal retirees by requiring eligible retirees to sign up for Medicare 
Parts A and B, and reducing the Federal Employees Health Benefit 
package available to them. Instead, my bill would ask the Postal 
Service to work with the Office of Personnel Management and the Center 
for Medicare and Medicaid Services to educate the postal workforce 
about how the Medicare program can work to enhance their existing 
health benefits.
  To address concerns that have been expressed about how the Postal 
Service works with its employee unions and management organizations on 
collective bargaining and consultation rights, the Postal Innovation 
Act offers ways to strengthen these relationships. It contains a 
provision clarifying arbitrators' broad authority to consider the 
factors he or she deems relevant should collective bargaining with a 
union fail. It also contains a provision clarifying the consultation 
process for managers, supervisors, and postmasters. In the case of 
labor and management agreeing to any future workforce reductions, the 
bill also clarifies that the process would be subject to existing 
procedures for other Federal employees.
  Additionally, as the postal workforce has begun making concessions on 
pay and benefits and other contributions to the organization's 
solvency, this bill contains a provision intended to ensure that those 
at the very top of the Postal Service share in the sacrifice. This 
provision is modeled on an amendment drafted by Senator Tester that was 
discussed but never settled on during Committee consideration of postal 
reform legislation. Currently, the Postmaster General and several other 
top executives at the Postal Service make more than $200,000 per year, 
in addition to bonuses, deferred compensation, and other benefits. I 
believe that running the Postal Service is public service, and the 
Postal Service simply cannot afford to treat the top management like 
corporate executives, especially when postal employees and so many 
other Americans face pay freezes. As important as his duties are, I 
believe it is wrong for the Postmaster General to be paid more than the 
Secretary of Defense. My bill would tie the top pay at the Postal 
Service to the Executive Level schedule used to determine pay for 
Federal executives.
  I believe that the provisions I have outlined in this bill will serve 
as important ideas as we move forward with comprehensive postal reform. 
It is my sincere hope that we can work out our differences on the 21st 
Century Postal Service Act, which would be a workable proposal to 
address the future of the Postal Service without its flawed workforce 
provisions.
  As we continue this debate, I hope to offer these ideas as ways to 
further strengthen the Postal Service and show my commitment to 
preserving that service for all Americans well into the future. I ask 
my colleagues to consider the proposals I have put forward and work 
with me and all members who have their own proposals to help enact 
lasting improvements for the United States Postal Service.
                                 ______