[Congressional Record Volume 158, Number 59 (Tuesday, April 24, 2012)]
[Senate]
[Pages S2630-S2634]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
VIOLENCE AGAINST WOMEN REAUTHORIZATION ACT OF 2011--MOTION TO PROCEED--
Continued
The PRESIDING OFFICER. Under the previous order, the Senate will
resume consideration of the motion to proceed to S. 1925.
The Senator from Arizona.
Postal Reform
Mr. McCAIN. Mr. President, I want to discuss one of the amendments
that I believe we will be voting on later, and basically what it does
is it establishes a BRAC-like process in order to consolidate
redundant, underutilized, and costly post offices and mail processing
facilities.
We found over the years that Congress was politically unable to close
a base or a facility that had to do with the military, so we adopted a
process where a commission was appointed, those recommendations to
consolidate excess and underutilized military bases were developed, and
Congress was given an up-or-down vote. This is sort of based on that
precedent.
The bill before us clearly doesn't offer any solutions. According to
the Washington Post editorial:
The 21st Century Postal Service Act of 2011, proposed by
Senators Joseph Lieberman and Susan Collins and passed last
week by the Senate Committee on Homeland Security Government
Affairs, is not a bill to save the U.S. Postal Service. It is
a bill to postpone saving the Postal Service.
I agree with the Washington Post. I usually do. The Service's
announcement that they lost $5.1 billion in the most recent fiscal year
was billed as good news. That is how dire the situation is, the fact
that they only lost $5.1 billion.
The Collins-Lieberman bill, which transfers $7 billion from
the Federal Employee Retirement System to the USPS--to be
used to offer buyouts to its workers and paying down debts--
can stave off collapse for a short time at best.
Nor do the other measures in the bill offer much hope. The
bill extends the payment schedule for the Postal Service to
prefund its employee retirement benefits from 10 to 40 years.
Yes, the funding requirement is onerous, but if the USPS
cannot afford to pay for these benefits now, what makes it
likely that it will be able to pay later, when mail volume
has most likely plummeted further?
The bill also requires two more years of studies to
determine whether a switch to five-day delivery would be
viable. These studies would be performed by a regulatory body
that has already completed a laborious inquiry into the
subject, a process that required almost a year.
The Washington Post goes on to say:
This seems a pointless delay, especially given a majority
of Americans support the switch to five-day delivery.
And finally they go on and say:
There is an alternative--a bill proposed by Rep. Darrell
Issa that would create a supervisory body to oversee the
Postal Service's finances and, if necessary, negotiate new
labor contracts. The bill . . . is not perfect, but offers a
serious solution that does not leave taxpayers on the hook.
So we now have legislation before us that makes it harder, if not
impossible, for the Postal Service to close post offices and mail
processing plants by placing new regulations and limitations on
processes for closing or consolidating mail processing facilities, a
move in the wrong direction. It puts in place significant and
absolutely unprecedented new process steps and procedural hurdles
designed to restrict USPS's ability to manage its mail processing
network.
Additionally, the requirement to redo completed but not implemented
mail processing consolidation studies will ultimately prevent any
consolidations from occurring this calendar year.
What we have to realize in the context of this legislation is that we
now have a dramatic shift, technologically speaking, as to how
Americans communicate with each other. That is what this is all about.
We now have the ability to communicate with each other without sitting
down with pen and paper, just as we had the ability to transfer
information and knowledge by means of the railroad rather than the Pony
Express.
We now have facilities that are way oversized and unnecessary, and we
are facing a fiscal crisis. According to the Postal Service:
The current mail processing network has a capacity of over
250 billion pieces of mail per year when mail volume is now
160 billion pieces of mail.
So now we have overcapacity that is nearly double what is actually
going to be the work the Postal Service does, and all trends indicate
down. More and more Americans now acquire the ability to communicate by
text message, Twitter, and many other means of communications. So to
somehow get mired into while we cannot close this post office, we have
to keep this one open, we have to do this--we have to realize it in the
context that a large portion of the U.S. Postal Service's business is
conducted by sending what we call ``junk mail'' rather than the vital
ways of communicating that it was able to carry out for so many years.
In addition, the Postal Service has a massive retail network of more
than 32,000 post offices, branches, and stations that has remained
largely unchanged despite declining mail volume and population shifts.
The Postal Service has more full-time retail facilities in the United
States of America than Starbucks, McDonald's, UPS, and FedEx combined.
And according to the Government Accountability Office, approximately 80
percent of these retail facilities do not generate sufficient
[[Page S2631]]
revenue to cover their costs. That is what this debate is all about. I
hope my colleagues understand that we are looking at basically a dying
part of America's economy because of technological advances, and in
this legislation we are basically not recognizing that problem.
When 80 percent of their facilities don't generate sufficient revenue
to cover their costs, then any business in the world--in the United
States of America--would right-size that business to accommodate for
changed situations. This bill does not do that. It continues to put up
political roadblocks that prevent tough but essential closings and
consolidations.
I grieve for the individuals who took care of the horses when the
Pony Express went out of business. I grieve for the bridle and saddle
and buggymakers when the automobile came in. But this is a
technological change which is good for America in the long run because
we can communicate with each other instantaneously. So we have a Postal
Service--and thank God for all they did all those years, in fact, to
the point where they were even mentioned in our Constitution. But it is
now time to accommodate to the realities of the 21st century, and the
taxpayers cannot continue to pick up the tab of billions and billions
of dollars. Again, last year it lost only $5.1 billion, which they
suggested was good news.
All this bill does is place significant and absolutely unprecedented
and new process steps and procedural hurdles designed to restrict
USPS's ability manage its mail processing network. Additionally, the
requirement to redo completed but not implemented mail consolidation
studies will ultimately prevent any consolidations from occurring this
year.
So what do we need to do? We obviously need a BRAC. We need a group
to come together to look at this whole situation, find out where
efficiencies need to be made--as any business in America does--and come
up with proposals, because Congress does have a special obligation, and
have the Congress vote up or down. This bill will continue the failing
business model of the Postal Service by locking in mail service
standards for 3 years which are nearly identical to those that have
been in place for a number of years.
The clear intent of this provision is to prevent many of the mail
processing plant closures that the Postal Service itself has proposed
as part of its restructuring plan. It also prohibits the Postal Service
from moving to 5-day mail delivery for at least 2 years with
significant hurdles that must be cleared before approval, even though
the Postmaster General has been coming to Congress since 2009 and
asking for this flexibility.
One of the largest single steps available to restore USPS's financial
solvency would save the Postal Service at least $2 billion annually. If
you told Americans that we would save the taxpayers' money--because
they are on the hook for $2 billion a year--if you went from 6-day to
5-day mail delivery, I guarantee you that the overwhelming majority of
Americans do support a 5-day delivery schedule rather than 6-day
delivery schedule.
This, of course, kicks the can down the road. The bill also has at
least five budget points of order against it about which the ranking
member of the Budget Committee came to the floor yesterday and spoke.
So the BRAC-like amendment is essential, in my view, to moving this
process forward. I don't know how many more billions of dollars of
taxpayers' money is going to have to be spent to adjust to the 21st
century. There is no business, no company, no private business in
America that when faced with these kinds of losses wouldn't
restructure. And they would restructure quickly because they would have
an obligation to the owners and the stockholders. We are the
stockholders. We are the ones who should be acting as quickly as
possible to bring this fiscal calamity under control.
The GAO, the Government Accountability Office, states:
The proposed Commission on Postal Reorganization could
broaden the current focus on individual facility closures--
which are often contentious, time consuming, and
inefficient--to a broader network-wide restructuring, similar
to the BRAC approach. In other restructuring efforts where
this approach has been used, expert panels successfully
informed and permitted difficult restructuring decisions,
helping to provide consensus on intractable decisions. As
previously noted, the 2003 Report of the President's
Commission on the USPS also recommended such an approach
relating to the consolidation and rationalization of
USPS's mail processing and distribution infrastructure.
We pay a lot of attention to the Government Accountability Office
around here and this is something the Government Accountability Office
recommends as well.
In addition:
[GAO] reviewed numerous comments from members of Congress,
affected communities, and employee organizations that have
expressed opposition to closing facilities. Such concerns are
particularly heightened for postal facilities identified for
closure that may consolidate functions to another state
causing political leaders to oppose and potentially prevent
such consolidations.
We should listen to the Government Accountability Office, take
politics out of this delicate process, and move forward with their
recommendations.
Our proposal would be composed of five members appointed by the
President, with input from the House and Senate and the Comptroller
General, with no more than three members being of the same political
party.
The Postal Service, in consultation with the Postal Regulatory
Commission, will be required to submit a plan to the BRAC-like
Commission on closures and consolidations, which will include a list of
closures and consolidations, a proposed schedule, estimated annual cost
savings, criteria and process used to develop the plan, methodology and
assumptions used to derive the estimates and any changes to processing,
transportation, delivery or other postal operations anticipated as a
result of the proposed closures and consolidations.
The Commission will be required to publish in the Federal Register
the definition of ``excess mail processing capacity'' with a period of
public comment.
After receiving the plans, the BRAC-like Commission will be required
to hold at least five public hearings.
Finally, the Commission will be required to vote on the
recommendations, with the concurrence of at least four of the members,
and submit the recommendations to Congress. Any recommendation will be
the subject of a congressional vote of approval or disapproval.
The amendment recognizes the fact that the current business model for
the Postal Service is no longer viable. If we continue to act in an
irresponsible way by putting up political roadblocks, the American
taxpayer will be the one who ultimately suffers in the form of higher
postage prices and bailouts. We should make hard choices now so future
generations of Americans will have a viable Postal Service.
I ask unanimous consent the Washington Post editorial, ``A Failure to
Deliver Solutions to Postal Service's problems,'' be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Washington Post, Nov. 18, 2011]
A Failure To Deliver Solutions to Postal Service's Problems
The 21st Century Postal Service Act of 2011, proposed by
Sens. Joseph I. Lieberman (I Conn.) and Susan Collins (R
Maine) and passed last week by the Senate Committee on
Homeland Security and Governmental Affairs, is not a bill to
save the U.S. Postal Service (USPS).
It is a bill to postpone saving the Postal Service.
The service's announcement that it lost $5.1 billion in the
most recent fiscal year was billed as good news, which
suggests how dire its situation is. The only reason the loss
was not greater is that Congress postponed USPS's payment of
$5.5 billion to prefund retiree health benefits. According to
the Government Accountability Office, even $50 billion would
not be enough to repay all of the Postal Service's debt and
address current and future operating deficits that are caused
by its inability to cut costs quickly enough to match
declining mail volume and revenue.
The Collins-Lieberman bill, which transfers $7 billion from
the Federal Employee Retirement System to the USPS--to be
used for offering buyouts to its workers and paying down
debts--can stave off collapse for a short time at best.
Nor do the other measures in the bill offer much hope. The
bill extends the payment schedule for the Postal Service to
prefund its employee retirement benefits from 10 to 40 years.
Yes, the funding requirement is onerous, but if the USPS
cannot afford to pay for these benefits now, what makes it
likely that it will be able to pay later, when mail volumes
most likely will have plummeted further?
[[Page S2632]]
The bill also requires two more years of studies to
determine whether a switch to five-day delivery would be
viable. These studies would be performed by a regulatory body
that has already completed a laborious inquiry into the
subject, a process that required almost a year. This seems a
pointless delay, especially given that a majority of
Americans support the switch to five-day delivery.
We are sympathetic to Congress's wish to avoid killing
jobs. And the bill does include provisions we have
supported--such as requiring arbitrators to take the Postal
Service's financial situation into account during collective
bargaining and demanding a plan for providing mail services
at retail outlets.
But this plan hits the snooze button on many of the postal
service's underlying problems. Eighty percent of the USPS's
budget goes toward its workforce; many of its workers are
protected by no-layoff clauses. Seven billion dollars' worth
of buyouts may help to shrink the workforce, but this so-
called overpayment will come from taxpayers' pockets, and it
is a hefty price to pay for further delay.
There is an alternative--a bill proposed by Rep. Darrell
Issa (R Calif.) that would create a supervisory body to
oversee the Postal Service's finances and, if necessary,
negotiate new labor contracts. The bill, which just emerged
from committee, is not perfect, but it offers a serious
solution that does not leave taxpayers on the hook.
Mr. McCAIN. I don't know what the ultimate result of the votes in the
Senate will be. I do know that if it passes, it will be strongly
opposed in the other body, the House of Representatives. If it is
passed and signed into law, we will be back on the floor within 2 years
addressing this issue again because this is not a solution. This isn't
even a mandate. It is a proposal that will do business as usual and an
abject failure to recognize there are technological changes that make
certain practices obsolete, and that is what this is all about. Is it
painful? Yes. Is it difficult? Yes. But the overall taxpayer obviously
wants us to act in a fiscally responsible manner.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. LIEBERMAN. Mr. President, knowing we are scheduled to go out at
12:50, I ask unanimous consent to stay in session for no longer than 10
minutes more, so we will break at 1 p.m., for Senator Collins and I to
respond to Senator McCain--hopefully, sooner than that.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LIEBERMAN. I thank the Chair, particularly since the Chair will
be occupied by the distinguished Senator from Montana between now and
then.
I wish to respond very briefly to the statement of my friend from
Arizona, with a couple big points. The first is that Senator McCain has
declared the Postal Service of the United States dead much too
prematurely. He compares it to the Pony Express. Of course, electronic
mail and other changes have occurred but, today, every day, the Postal
Service delivers 563 million pieces of mail--every day. There are
businesses and individuals all over our country who depend on the mail.
The estimate is there are approximately 8 million jobs in our country,
most of them, of course--almost all of them--in the private sector,
that depend in one way or another on the functioning of the U.S. Postal
Service.
It is not fair and it is not realistic to speak as if the Postal
Service is dead and gone and it is time to essentially bury it with the
McCain substitute. I cannot resist saying that Senator Collins and I
come not to bury the U.S. Postal Service; we come to change it but to
keep it alive and well forever because it is that important to our
country.
Secondly, Senator McCain speaks as if the substitute legislation, S.
1789, that we are proposing--bipartisan legislation--does nothing; that
it is a status quo piece of legislation; it is not even a bandaid on
the problem. We all know, because we have talked about it incessantly
since we went on this bill, that the Postal Service is in financial
difficulty. Incidentally, I wish to say there is not a dime of taxpayer
money in the Postal Service. Ever since the Postal Service reforms
occurred, it has been totally supported by ratepayers, basically by
people who buy the services of the Postal Service, with two small
exceptions which are small--one to pay for overseas ballots for members
of the military so they can vote and another special program to
facilitate the use of the mail by blind Americans. But it has a
problem: $13 billion lost over the last 2 years.
This proposal of ours--Senator Collins and I, Senator Carper and
Senator Scott Brown--is not a status quo proposal. It makes significant
changes. There are going to be about 100,000 fewer people working for
the Postal Service as a result of this bill being passed. There will be
mail processing facilities that close. There will be post offices that
will be closed and/or consolidated. There will be new sources of
revenue for the Postal Service. The bottom line: The U.S. Postal
Service itself estimates that our legislation, if enacted as it is now,
as it is phased in over the next 3 to 4 years, by 2016, will save the
Postal Service $19 billion a year. This isn't a bandaid. This is a real
reform, a real transformation of the Postal Service to keep it alive--
$19 billion.
Let me put it another way. This is a bipartisan proposal. We have
worked on it very hard to keep it bipartisan. We think it can pass the
Senate and it can ultimately be enacted. If Senator McCain's substitute
were to pass the Senate, nobody thinks it is going to get enacted into
law. It would not. Certainly, the President of the United States would
not sign it, and that will mean nothing will be done. What will be the
effect of that? The effect will be that the post office will go further
and further into debt and deficit. Also, the Postmaster General will be
faced with a choice of either enormous debts and deficits or taking
steps that will make the situation worse--which our bill, through a
reasonable process, is trying to avoid--which is a kind of shock
therapy whose effect will be, as the McCain substitute would be, to
actually drop the revenues of the post office and accelerate its
downward spiral.
I think the two numbers to think about--the ones that come from the
Postal Service itself--are these: By 2016, if we do nothing, the Postal
Service will run somewhere between a $20 billion and $21 billion annual
deficit. If we pass this bill and it is enacted into law, that deficit
will be down to around $1 billion--a little more--and heading toward
balance in the years that follow.
So I urge my colleagues to vote against the McCain substitute and the
BRAC amendment. The BRAC-like Commission amendment I think is not
necessary. It is not necessary for us in Congress to give up and give
in. We have a good resolution to the problem. Incidentally, if we get
this enacted, I think we will send a message to the American people
that we can face a tough problem that exists in a public service, deal
with it in a reasonable way, and ask people to sacrifice but keep a
venerable and critically important American institution alive and well.
I thank the Chair and I yield the floor for my distinguished ranking
member.
The PRESIDING OFFICER. The Senator from Maine.
Ms. COLLINS. Mr. President, I am only going to speak very briefly. I
wish to shine a spotlight on a provision of Senator McCain's substitute
that has not yet been discussed that actually raises constitutional
issues.
All of us believe the labor force of the Postal Service is too large
and unfortunately will have to be reduced, and we do that through a
system of buyouts and retirement incentives through a compassionate
means very similar to the way a large corporation would handle the
downsizing of its employees. But Senator McCain's alternative takes a
very different approach. It would have this new control board that
would be created to impose on the Postal Service an obligation to
renegotiate existing contracts to get rid of the no-layoff provision.
I will say I was very surprised when the Postmaster General signed
the kinds of contracts he did this spring. The fact is Senator McCain's
amendment--section 304 of which amends section 1206 of existing law--
requires existing contracts to be renegotiated. That creates
constitutional questions. The potential constitutional issue derives
from the contracts clause of article I, which prohibits States from
passing laws impairing the obligation of contracts. Of course, this
provision does not apply to the Federal Government. The Congressional
Research Service has explained in a memorandum to me on this topic in
July of 2011 that the due process clause of the
[[Page S2633]]
fifth amendment has been held to provide some measure of protection
against the Federal Government impairing its own contracts. I ask
unanimous consent that the CRS memorandum I just referred to be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Congressional Research Service,
Washington, DC, July 7, 2011.
MEMORANDUM
To: Senate Committee on Homeland Security and Governmental
Affairs Attention: Lisa Nieman.
From: Thomas J. Nicola, Legislative Attorney, 7 5004.
Subject: Congressional Authority to Alter Postal Service
Employee-Management Relations, Including Collective
Bargaining Agreements.
This memorandum responds to your inquiry regarding the
authority of Congress to alter Postal Service employee-
management relations, including collective bargaining
agreements. The employee-management authority that Congress
has granted to the United States Postal Service in the Postal
Service Reorganization Act of 1970, P.L. 91 375, is broader
than authority that it has granted to most federal entities.
Congress enacted the 1970 Act, codified in title 39 of the
United States Code, to enable the U.S. Postal Service to
operate more like a business than a government agency. Before
this statute became law, postal services were operated by the
Post Office Department, a cabinet level government agency.
The Act established the Postal Service as an independent
establishment in the executive branch of the United States
Government. While Congress applied to the Postal Service some
statutes including those relating to veterans' preference and
retirement that apply to federal agencies, it provided in 39
U.S.C. section 1209(a) that, ``Employee-management relations
shall, to the extent not inconsistent with the provisions of
this title [title 39 of the U.S. Code], be subject to the
provisions of subchapter II of chapter 7 of title 29[,]''
i.e., the National Labor Relations Act, which governs private
sector employee-management relations. By contrast, provisions
relating to those relations for federal agencies are codified
in chapter 71 of title 5 of the United States Code.
In section 1005 of title 39, Congress identified subjects
of Postal Service collective bargaining--compensation,
benefits, and other terms and conditions of employment. This
scope of subjects differs from the scope for federal agencies
identified in chapter 71 of title 5, which is limited to
``conditions of employment.''
Addressing the transition from the Post Office Department
to the businesslike U.S. Postal Service, Congress in 39
U.S.C. section 1005(f), as amended, stated, in relevant part,
that:
No variation, addition, or substitution with respect to
fringe benefits shall result in a program of fringe benefits
which on the whole is less favorable to the officers and
employees in effect on the effective date of this section
[enacted on August 12, 1970], and as to officers and
employees/or whom there is a collective-bargaining
representative, no such variation, addition, or substitution
shall be made except by agreement between the collective
bargaining representative and the Postal Service.'' (Emphasis
supplied.)
In section 1207 of title 39, Congress provided procedures
for terminating or modifying collective bargaining
agreements. It stated that a party wishing to terminate or
modify an agreement must serve timely written notice on the
other party. If parties cannot agree on a resolution or adopt
a procedure for a binding resolution of a dispute, the
Director of the Federal Mediation and Conciliation Service
must appoint a mediator. This section also provided authority
to establish an arbitration board under certain circumstances
and said that board decisions are conclusive and binding on
the parties.
A collective bargaining agreement is a contract between the
Postal Service and a recognized bargaining unit. Can Congress
affect a collective bargaining agreement through legislative
action? The power of Congress over employee-management
relations at the Postal Service, including these agreements,
may be divided into prospective authority versus authority
over existing agreements. Congress has authority to modify
the scope of bargaining prospectively. In the Postal
Reorganization Act of 1970, Congress granted the Postal
Service authority to bargain over compensation, benefits
(such as health insurance and life insurance, for example),
and other conditions of employment, but it could amend that
statute to limit the scope of bargaining subjects in the
future. It could, for example, provide that health insurance
no longer will be the subject of collective bargaining after
collective bargaining agreements that address that subject
expire.
A more difficult question is whether Congress could modify
agreement terms that the Postal Service and recognized
bargaining representatives have bargained collectively and
included in collective bargaining agreements before they
expire. Article I, section 10, clause 1 of the United States
Constitution, the Contract Clause, provides that laws
impairing the obligation of contracts shall not be passed,
but this prohibition applies to the states, not to the
federal government. Nevertheless, the jurisprudence under
this clause may help inform an inquiry regarding the power of
Congress to modify terms of collective bargaining agreements
while they are in effect.
In United States Trust Co. v. New Jersey, the Supreme Court
said that, ``Although the Contract Clause appears literally
to proscribe `any' impairment, this Court has observed that
`the prohibition is not an absolute one and is not to be read
with literal exactness like a mathematical formula.' '' It
added that:
The Contract Clause is not an absolute bar to subsequent
modification of a state's own financial obligations. As with
laws impairing the obligation of private contracts, an
impairment [of those obligations] may be reasonable and
necessary to serve an important public purpose. In applying
this standard, however, complete [judicial] deference to a
legislative assessment of reasonableness and necessity is not
appropriate because the state's self interest is at stake. A
governmental entity can always find a use for extra money,
especially when taxes do not have to be raised. If a state
could reduce its financial obligations whenever it wanted to
spend the money for what it regarded as an important public
purpose, the Contract Clause would provide no protection at
all.
Based on the United States Trust Co. case, courts
subsequently developed a three-part test when assessing the
constitutionality of state action challenged as an impairment
of contracts--(1) whether the state action in fact impairs a
contractual obligation; (2) whether the impairment is
substantial; and (3) whether the impairment nevertheless is
reasonable and necessary to serve a public purpose.
Although the Contract Clause does not apply to the federal
government, the Due Process Clause of the Fifth Amendment has
been held to provide some measure of protection against the
federal government impairing its own contracts, but the
limitations imposed on federal economic legislation by the
latter clause have been held to be ``less searching'' than
those involving the state legislation under the Contract
Clause. In two Depression-era cases, however, the Supreme
Court held that some statutes which impaired obligations to
pay purchasers of federally issued war risk insurance and
bondholders that Congress had enacted as economy measures
exceeded constitutional limits.
If a court should be influenced by the reasoning expressed
in these cases, it may strike down as a Due Process Clause
violation a statute it finds to impair a term of a Postal
Service collective bargaining agreement before that agreement
expires. If a court should wish to avoid deciding a case
involving whether such a statute violates the Due Process
Clause, a constitutional ground, it may uphold the statute,
but require the United States to pay damages for breaching a
term of the agreement. Alternatively, because the limitations
on federal impairment of contracts have been held to be
``less searching'' than those that apply to state impairments
under the Contract Clause of the Constitution, which are
permitted if found to be ``reasonable and necessary,'' a
court may uphold a statute that impairs a term of a current
Postal Service collective bargaining agreement and not assess
damages against the United States.
Ms. COLLINS. There is also a Supreme Court case, Lynch v. The United
States, which makes clear that the due process clause prohibits the
Federal Government from annulling its contracts and the United States
is as much bound by its contracts as are private individuals.
In the landmark case of U.S. v. Winstar decided in 1996, the Supreme
Court cited Lynch for the proposition that the Federal Government ``has
some capacity to make agreements binding future Congresses by creating
vested rights,'' even though the Contract Clause does not directly
apply.
Obviously, one Congress cannot bind another, and no Federal agency
can bargain away the right of Congress to legislate in the name of the
people. But no one would ever sign a contract with an instrumentality
of the Federal Government if that contract could be rewritten by
Congress at will.
Recognizing this, the courts have distinguished between acts which
affect contracts in general, where the Federal Government is exercising
its sovereign powers, and acts directly altering the obligations of
contracts to which the Federal Government is itself a party.
The Winstar case I mentioned before illustrates this distinction.
Winstar was brought by a financially healthy Savings & Loan institution
that was asked by Federal regulators to take over failing thrifts
during the S&L crisis of the 1980s. After Winstar entered into a
contract with the Federal Savings & Loan Insurance Corporation
stipulating that it could count the ``goodwill'' of the thrifts it took
over to offset the liabilities it was assuming, Congress changed the
underlying
[[Page S2634]]
law. Based on that change, the regulators reneged, declared Winstar
``inadequately capitalized,'' and seized its assets.
In that case, the Supreme Court held that even though Congress had
the right to change the law in general, the Federal Government could
still be liable for breach of contract it had entered into with
Winstar, and for damages.
I am concerned that if the Postal Service reopens and renegotiates
its collective bargaining agreements to comply with the McCain
amendment, courts could find the Postal Service in breach of those
agreements, and force it to pay damages.
At a minimum, it strikes me that Senator McCain's language could tie
up the Postal Service in litigation for years, which would defeat our
efforts to reduce the workforce costs faced by the Postal Service.
Bottom line: I am very concerned that if the Postal Service is forced
by the McCain substitute to reopen and renegotiate current collective
bargaining agreements, the courts would find the Postal Service in
breach of those agreements and force it to pay damages and also that it
would be found to be unconstitutional. The approach we have taken does
not raise those constitutional concerns. It does not have Congress
stepping in to abrogate contracts, which is a very serious and
potentially unconstitutional step for us to take.
Finally, I would say I agree with everything my chairman has said.
Senator McCain's amendment does not address the true problems of the
Postal Service. Instead, it assumes that the Postal Service is
obsolete, that they cannot be saved, and that we should just preside
over its demise. I reject that approach.
Thank you, Mr. President.
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