[Congressional Record Volume 161, Number 134 (Thursday, September 17, 2015)]
[Senate]
[Pages S6811-S6815]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CARPER:
  S. 2051. A bill to improve, sustain, and transform the United States 
Postal Service; to the Committee on Homeland Security and Governmental 
Affairs.
  Mr. CARPER. Mr. President, one of the factors in creating a favorable 
environment for job creation and job preservation is, of all things, 
something that has been around for 200 years to 225 years, and that is 
the U.S. Postal Service. Not many people think of the Postal Service as 
part of the engine that helps drive our economy, but it is.
  There are 7 to 8 million jobs that flow directly from work directly 
involved or indirectly involved with the Postal Service--7 to 8 million 
jobs. For a number of years, the Postal Service has been losing money. 
There are a lot of questions about whether they will be able to make 
it, whether they will be able to survive, whether they are going to 
contribute or simply fold up and go away.
  So I would note that another priority of mine for years has been 
postal reform. My dance partner on this for a number of years was 
Senator Susan Collins, a Republican and a very capable leader, and for 
the last several years Tom Coburn, a Republican from Oklahoma--Dr. 
Coburn--who retired at the end of last year. We have worked with a lot 
of folks--Democrats and Republicans in the House and Senate--in the 
last couple of years to try to find a way not just to make the Postal 
Service relevant but to enable them to be successful. And one of our 
real challenges has been how to take a 200-plus-year-old network--a 
legacy delivery network that goes to every mailbox in this country, 
business or residential--and enable them to make money in a digital age 
in the 21st century.
  A lot of us are buying stuff differently than we used to. We are 
paying our bills differently than we used to. We don't send a whole lot 
of first-class mail the way we used to.
  When I was a naval flight officer in Southeast Asia for three tours, 
the best day of the week was when the mail came. We would get all kinds 
of letters from home. We would get all kinds of postcards, birthday 
cards--you name it--Father's Day cards, and Valentine's Day cards. We 
would get magazines, and we would get newspapers. It was the best day 
of the week. Today, our folks in the Armed Forces are deployed to 
Afghanistan or other places around the world, and they still get mail, 
but it is not as important for them as it was for us because they have 
Skype, they have cell phones, and they have the Internet. They have 
other ways to communicate.
  The challenge for the Postal Service has been, in a day and age where 
we communicate very differently than we did during the last war--than 
we do, say, in the war we have been involved in in Afghanistan for some 
time now--how do they make money? How do they remain relevant? They are 
starting to

[[Page S6812]]

get it. The Postal Service today--I think it was at 3 a.m. this 
morning--the Postal Service, in 33 ZIP Codes in San Francisco, 
delivered groceries. They use vehicles that otherwise would have been 
used between 3 a.m. and 7 a.m. The folks who work for the Postal 
Service have access to apartments and high rises to actually deliver 
groceries. And I think they are delivering for Amazon in those 33 ZIP 
codes. I think they have been trying it out for a while, and things are 
going pretty well. The Postal Service has turned around and has 
contacted 100 other grocery chains around the country. They said: This 
is what we are doing for Amazon, and we could probably do this for you 
and help you and help serve customers in a different kind of way.
  This morning, in a place in Delaware, just around Middletown, DE, 
which is north of Dover, the Postal Service, literally during the 
middle of the night--or rather Amazon with the Postal Service in the 
middle of the night combined to take items from that Amazon 
distribution center in Middletown, DE, and literally drop off, all over 
the Northeast, the mid-Atlantic--all over the region--drop off items 
that are going to be delivered today. These are all kinds of products 
that were ordered through Amazon yesterday on the Internet, by phone, 
and so forth, and they are being delivered literally today. The Postal 
Service has a big hand in that.
  Also, we have FedEx and UPS. A lot of folks think of FedEx and UPS as 
competitors of the Postal Service, and in a way they are, but they are 
also very good partners together. It works this way. FedEx doesn't want 
to deliver to every mailbox in the country, especially in the more 
rural areas where there is a lot of separation and, frankly, it is 
costly to do that. FedEx doesn't want to do it, and UPS doesn't want to 
do it. But guess who goes every day--6 days a week, sometimes 7--to 
pretty much every mailbox in the country? It is 6 days a week. Well, it 
is the Postal Service. So there has been a partnership for a number of 
years now where the Postal Service delivers for UPS and for FedEx the 
last mile, the last 2 miles, the last 5 miles, 10 miles, the last 20 
miles. The Postal Service makes some money doing that, and it helps 
FedEx and UPS maybe save some money. And when the Postal Service sends 
its packages by air mail, it actually will partner with FedEx or UPS in 
order to be able to move its products around the country in an 
expeditious way.
  So those are some things that are happening around the country that 
most people aren't thinking about or mindful about, some ways the 
Postal Service is becoming more involved in the digital age.
  Christmas is still 3 months or so away, but as people start thinking 
about Christmas shopping, holiday shopping, in a lot of cases they are 
going to get on the phone and get on the Internet and order. Those 
packages they are ordering are going to have to be delivered by 
somebody, and the Postal Service is one of those somebodies.
  I think the last time we saw the numbers--while first-class mail 
continues to trend down by a couple of percent per year, what is going 
up--I think the last time we saw 12 to 14 percent a year--is delivery 
packages and parcels. So the Postal Service is finding out how to be 
relevant even in the digital age in ways they haven't thought about 
before.
  There are other things they could do. Among those things is they 
could deliver wine and beer. UPS does that, and FedEx does that. The 
postal service does that in Australia. I think they make maybe $5 
billion a year doing that. I would like to say Australia doesn't have 
as many people as we do; they just drink more. But there is lots of 
money to be made by the Postal Service here, and I don't know of any 
reason why we shouldn't allow them to be involved in that business as 
well, with appropriate safeguards and as long as States approve of that 
activity.
  Those are some things I would mention about the Postal Service.
  The other thing I would say is that over the past couple of years, 
even though we found it difficult to pass legislation, one of the 
things the Postal Service has done on their own is they have tried to 
rightsize the enterprise to reflect the delivery--less--of first-class 
mail and the delivery of a little bit lower amounts of what we call 
standard mail, which could be nonprofits using the mail, it could be 
for-profits, it could be all kinds of stuff, but it is not first-class 
mail.
  But one of the things the Postal Service has sought to do is to look 
at their workforce and say: In a day and age when we have to deliver a 
lot less mail, do we still need the same number of full-time employees?
  They decided the answer is no, and I think their full-time 
equivalents are I would say down by a third from where it was about a 
decade ago.
  The number of mail-processing centers across the country is down by 
about half, from maybe 600 to 300.
  The number of post offices really hasn't changed a whole lot. They 
have over 30,000, maybe closer to 40,000 post offices around the 
country, some active, large, vibrant, and some small, rural, not a lot 
of activity, but important to those communities.
  What the Postal Service has done with a number of their smaller post 
offices is basically they have said to the communities: You know, there 
is not a lot going on in your post offices. Are the amount of stamps 
and revenues generated by post offices really enough to make it 
worthwhile to run this post office 6 days a week, 8 to 10 hours a day?
  What they have done is they have sort of presented a menu--the Postal 
Service has presented a menu to communities and said: You can't have a 
6-day-a-week, 8- to 10-hour-a-day post office in your community, but 
you can have a post office if you want, maybe 4 hours a day, 6 hours a 
day.
  The person running it would be maybe a contract employee, maybe not a 
full-time employee with full benefits but someone maybe making $15 an 
hour. For some people, that is pretty good money. And then the 
communities would still end up with their post offices. Or maybe the 
post office should be a rural letter carrier driving around on his or 
her route in the rural part of a county or a State. It would literally 
be a post office on wheels, a little bit like a bookmobile was when I 
was a kid growing up. Everybody on that route would know that rural 
letter carrier was going to be here or there throughout the day and be 
there to take packages or to provide stamps or to send mail or to 
provide services that you would normally get in a post office in a more 
urban, suburban area.
  But long story short, the Postal Service has done a fair amount to 
reduce--I am tempted to call it--the size of their enterprise and the 
cost of their enterprise. There are fewer full-time-equivalent 
employees, fewer mail-processing centers. And while they still have a 
lot of post offices, a number of them--maybe one out of every five or 
so, one out of every four--is a post office that may be open 2 hours a 
day, 4 hours a day, 6 hours a day instead of 8 hours a day or 10 hours 
a day.
  Today I am introducing legislation that seeks to enable the Postal 
Service, which is still--actually, if you didn't consider one factor, 
which is that the Postal Service is required by law to put money aside 
to meet a liability that most private companies and almost every State 
and local government and the Federal Government, too, have not 
addressed, and that is the health care liability of their pensioners.
  Back in the late 1990s when I was Governor of Delaware--we had worked 
for years--Governor Pete DuPont, Governor Mike Castle, and my 
administration--to move from the State with the worst credit rating in 
America to a State with an AAA credit rating. In my next to last year 
as Governor, 1999, Delaware--in 1977 we had the worst credit rating in 
the country, and in 1999 we earned AAA credit ratings across the 
board--Standard & Poor's, Moody's, and Fitch. It was a day of great 
jubilation. But even after they awarded us our AAA credit ratings, they 
said to us: You have a problem, Delaware. And as it turned out, so did 
49 other States. That is because while we had a fully funded pension 
fund, we had not set aside any money for a significant cost of the 
pensioners, and that is their health care costs once they reached the 
age of 65. And most employers in the country, those employers of any 
consequence, when their retirees reach the age of 65, and DuPont 
company is a great example--my

[[Page S6813]]

wife had a wonderful 27-year career with them, but when DuPont's 
retirees reach the age of 65, the DuPont company doesn't say: To heck 
with you. We are going to forget you.

  They still try to meet their moral obligation to provide their 
employees a pension and access to health care. Part of that is 
Medicare. DuPont, and frankly almost any company of any consequence, 
says to their employees reaching the age of 65: Alright, you are 65, 
you are eligible for Medicare Part A, Medicare Part B, Medicare Part D, 
and we expect retirees 65 or older to use it--to sign up and use it. It 
is a requirement. And if that doesn't cover all their medical needs--
and it probably will not--a lot of companies will continue to provide a 
wraparound supplemental program to fill in the holes that are left 
unfilled by Medicare Part A, Part B, and Part D.
  Well, as it turns out, postal retirees, when they reach the age of 65 
and are eligible for Medicare, most of them sign up for Medicare Part 
A, a majority sign up for Medicare Part B--one of those is hospital 
care and the other inpatient and the other outpatient doctor care--but 
almost none of them sign up for Medicare Part D, as in ``delta.'' Part 
D is a drug program for Medicare that has been around for close to 13, 
14 years now. It has been a huge success--a huge success.
  But while the postal service pays into Medicare, I think more than 
maybe any other employer in the country--they pay more money, I think, 
than any other employer in the country. I think the postal service is 
their No. 1 or No. 2 business in terms of full-time employees. And 
while they pay a ton of money into Medicare, they do not get full 
value. In fact, in effect, the postal service is actually overpaying to 
bring down the Medicare costs for other employers, including FedEx and 
UPS and DuPont, for that matter.
  So the question is: Is that right? Is that fair? Is that equitable to 
the postal service? Is it fair to their employees and their pension? I 
don't think so, and neither did Dr. Coburn in the last Congress when we 
offered legislation that said this should be fixed. The postal service 
ought to be treated like other companies. They ought to be able to get 
full value for the contributions they make into Medicare.
  That is something that should be part of postal reform legislation. 
It is part of the legislation I am introducing today, and it was part 
of the legislation we introduced a year ago.
  Another important part of the legislation we are introducing today 
deals with the rates the postal service can charge. There was something 
after the last recession called an exigent rate case. The postal 
service's businesses were badly damaged. A lot of businesses that used 
first-class mail fled first-class mail and found a way to use the 
Internet and to replace the use of first-class mail, which had a 
severely damaging impact on the postal service. The postal service 
asked for an exigent rate case, which gave them an opportunity or a way 
to raise their rates a bit. The question is, Is that going to be 
forever or is it going to go away?
  We have been negotiating, with the help of a guy named John Kane, a 
member of our staff on the Committee on Homeland Security and 
Governmental Affairs, an agreement with the postal service and with 
some mailers and others that are interested in these issues to enable 
the exigent rate case to stay in place for a couple more years, and 
then we will go through a new process or an existing process to 
establish a new postal rate for the postal service to charge. But this 
provides some stability over the next couple of years.
  I will not go through the whole bill, but let me just say that the 
idea behind our legislation is to enable the postal service to have 
reasonable revenues to be successful, to enable them to be treated 
fairly and I think equitably with respect to their payments into 
Medicare for their retirees, to also enable them to be more creative, 
and to find ways to use that 200-plus-year-old distribution network in 
order to make money--in order to make money.
  There are lots of other ideas as well, with the kind of stuff that 
happened this morning in those 33 zip codes in San Francisco and the 
kind of work that will happen tonight at the Amazon distribution center 
in Middletown, DE, and a lot of other places on this side of the United 
States.
  This is legislation I am introducing on my own. We have worked with 
stakeholders, which includes certainly the postal service, certainly 
includes a lot of the customers--not every one of their customers--and 
includes the employee groups--the unions, the groups that represent 
postmasters--and other people as well--regular customers, residential 
customers, business customers. So we are introducing legislation, and 
my hope is that it will serve as a catalyst for a good conversation and 
a much needed consensus to say this is where we are headed on postal 
reform in 2015 and beyond.
  I have never introduced a perfect bill, and I am not introducing 
probably a perfect bill now. But I think it is a pretty piece of 
legislation. We have listened to a lot of folks, and we have listened 
to a lot of folks who serve here with us in the Senate--Democrats, 
Republicans, folks on the committee and off the committee--and it is my 
hope we will have a chance to kick the tires on this new piece of 
legislation I have introduced and somewhere fairly soon be able to have 
a hearing so folks can come and say: This is what I like about it or 
don't like about the legislation, and they will decide ways to make it 
even better.
  I like to say that everything I do I know I can do better. But as it 
says in the Constitution, ``in order to form a more perfect union''--in 
the preamble of the Constitution, ``in order to form a more perfect 
union''--our goal will be to form a more perfect postal service and 
hopefully form a more perfect piece of legislation. The real goal is to 
enable the postal service to be more successful--to enable them, and 
not be running them down all the time.
  We have great people who work for the postal service. They deliver 
mail in my neighborhood and probably yours as well. There are folks who 
are going to work right now in the postal service. They will be up late 
tonight sorting mail and making sure it will be ready to be delivered 
tomorrow. We have people who will be working tomorrow and Saturday 
delivering the mail. We will have folks delivering some mail, priority 
mail, some of it on Sunday. The postal service is not just a 6-day 
operation today. They deliver a lot of packages and parcels now on 
Sunday.
  Our legislation is designed to enable those folks to be more 
innovative, to unleash the innovative spirit within the postal service, 
and to bring ideas in from a lot of other folks to help the postal 
service in that regard.
  I think that pretty well covers my talking points. Mr. President, I 
ask that, after you have had a chance to get a good rest this weekend, 
to maybe take a look. I will come and visit you, maybe tell you what we 
are doing here, and see if you would like to join us somewhere down the 
road as a cosponsor or at least be a constructive critic. Either role 
would be very welcome.
  Today I am introducing the Improving Postal Operations, Service and 
Transparency Act of 2015, known as the iPOST Act. As my colleagues here 
in the Senate know, the way we communicate as a society has changed 
dramatically over the past 20 years. Instead of sending a letter to 
loved ones overseas, we send a Facebook message or Skype. Instead of 
sending our bills every month, we go online and enter our billing 
information. Instead of flipping through a catalogue, we visit the 
retail store's website. But while the way we communicate and conduct 
business has changed, we still require a vibrant, financially sound, 
and sustainable postal system. The United States Postal Service 
continues to be a critical enabler of communications and commerce that 
maintains a unique delivery network that connects every community, 
town, and city in this country and with posts around the world.
  The Postal Service is a more than 200 year-old institution that today 
serves as the linchpin of a $1 trillion dollar mailing industry 
employing more than 8.4 million people. It is the nexus between 
consumers and businesses as diverse as Hallmark, Amazon, small town 
newspapers, and mail-order pharmacies. Over the years, the Postal 
Service has been a resilient institution that has consistently adjusted 
with the times and adapting when necessary to remain a vital part of 
our Nation's economic infrastructure and really our everyday lives. 
Many would agree that,

[[Page S6814]]

though much has changed in our country and our economy since the 
formation of the Postal Service, the need for an efficient and secure 
transfer of communications and goods has not. Nevertheless, the growing 
trend toward digital communication, the Postal Service's significant 
long-term financial liabilities, and the continued decline of First 
Class mail volume are threatening the future viability of this federal 
establishment enshrined in the Constitution. Thus, it is incumbent upon 
Congress to give the Postal Service the tools necessary to address its 
growing costs and modernize so it can remain relevant for generations 
to come.
  Two American industries that have also undergone major disruption in 
the past and survived to live another day offer parallels to the Postal 
Service's current predicament. The U.S. freight rail industry faced 
disruption from the trucking industry and had significant overcapacity 
beginning in the 1950s. Three interrelated components helped the 
freight rail industry recover: a focus on improving productivity, 
containing costs, and generating revenue. Likewise, the U.S. auto 
industry has faced similar challenges: overcapacity, too many 
suppliers, and a declining market share. The freight rail and auto 
industries both have come roaring back to life and profitability. But 
it's important to note that they did so in part thanks to helpful 
legislative reform.
  While containing costs, generating revenue, and improving 
productivity are certainly part of the postal reform equation and 
something postal management must continue to focus on, we must do our 
part to bring badly needed structural reforms to the Postal Service's 
business model and ensure long-term stability in the years to come.
  Originally, the Postal Service was a federal department that required 
annual appropriations from Congress. In 1971, Congress passed 
legislation to make the Postal Service an ``independent establishment 
of the executive branch,'' designed to run as a self-sustaining entity 
that would cover its operating costs with revenues produced through 
sales, including postage and related products and services. Hence, the 
modern version of the Postal Service was born.
  As time passed, Postal Service reforms became necessary to create 
stability in the agency and to ensure that the American taxpayer and 
the business community would continue to benefit from its products and 
services. In an effort to address these needs, Congress enacted the 
Postal Accountability and Enhancement Act of 2006, PAEA. When PAEA was 
signed into law a decade ago, First-Class Mail volume was peaking at 
213 billion pieces, the postal workforce was composed of almost 700,000 
career employees and the e-commerce market was in its infancy with a 
value of just over $100 billion annually.
  Unfortunately, passage of the PAEA came at the cusp of immense change 
in the mailing industry, and also our economy as a whole. The 
significant advancement in digital communication that continued through 
the recession, the steady decline in First-Class Mail and Standard Mail 
volume, and the rising costs associated with longstanding healthcare 
and retirement obligations created a tumultuous relationship between 
Postal Service revenues and costs.
  In the decade since passage of PAEA, total Postal Service mail volume 
has fallen some 27 percent to 155 billion pieces, the career workforce 
is 30 percent smaller and the booming domestic e-commerce market is now 
valued at more than $300 billion. The effects of the Great Recession in 
2008 had a tremendous impact on the mailing industry, and by extension 
the Postal Service's bottom line. To combat these effects, the Postal 
Regulatory Commission approved a temporary emergency rate increase, 
which has been the primary reason for the Postal Service's positive 
operating income over the past 2 years.
  I have worked on postal issues with various colleagues for a large 
part of my time in the United States Senate. Further, I have been 
working on postal reform diligently since 2010 when it became apparent 
that the future of the Postal Service was in jeopardy. Last Congress, 
former Senator Tom Coburn and I introduced a package that we felt moved 
the Postal Service forward and solved the long term problems that 
plague it. Unfortunately, that bill did not pass and in January the 
Postal Service was forced to change its delivery standards. Since then, 
service has noticeably declined.
  I have worked diligently with my colleagues and a wide range of 
postal stakeholders including postal consumers, the mailing industry, 
postal labor unions, and Postal Service leadership for the last eight 
months on a compromise proposal. The legislation I have introduced is a 
starting point in making sure the Postal Service remains relevant in 
the digital age by achieving financial viability and better meeting our 
communication and commerce needs. I will continue to work with all 
interested parties, my colleagues in the Senate and the House, 
including Chairman Ron Johnson of the Homeland Security and 
Governmental Affairs Committee, and the Administration to build on, 
perfect, and revise this legislation going forward. I am confident that 
the Postal Service can turn this corner and remain relevant in the 
decades to come, but it is going to take collaboration, communication, 
and compromise from all stakeholders and Congress to make that happen.
  The Improving Postal Operations, Service and Transparency Act, iPOST 
Act, will set the path to make solvency possible and fix the Postal 
Service's financial and other challenges for the long-term. In 
particular iPOST Act would ensure that our federal pension systems 
recognize the differences between the postal and non-postal federal 
workforce to prevent the Postal Service from paying more than it owes 
into the federal retirement systems, as has happened in the past.
  The iPOST Act would restructure the way the Postal Service funds its 
remaining liability for retiree healthcare by scrapping the existing, 
unaffordable payment schedule and replacing it with a system with 
realistic payment goals that would allow the Postal Service to invest 
over the next 10 years in a more lucrative TSP-like account. Combined, 
these provisions would help the Postal Service and taxpayers by paying 
down the Postal Service's long-term retiree health obligations sooner.
  The iPOST Act would create a Postal Service Health Benefits Program, 
PSHBP, within the Federal Employee Health Benefits Plan, FEHBP, and 
require that all Medicare-eligible postal annuitants and employees 
enroll in Medicare parts A, B, and D. This would ensure better 
coordination between PSHBP and Medicare than we see with FEHBP and 
Medicare today and allow the Postal Service to reap the full benefit of 
the resources it and its employees pay into Medicare.
  The iPOSTAct would require an independent analysis of the recent 
network changes put into place by the Postal Service and how service 
can be improved, particularly in rural areas. The bill further proposes 
a pause in the Postal Service's network optimization efforts for 2 
years for plants and 5 years for post offices to ensure a stabilization 
of service for all postal customers.
  The iPOST Act would provide customers big and small with better 
transparency into how the Postal Service performs for them regardless 
of whether they live in a large city, a suburban development, or a 
remote rural area.
  The iPOST Act would makes the current temporary emergency rate 
increase permanent while freezing any further rate increases until a 
new rate system can be established by the Postal Regulatory Commission 
by January 1, 2018.
  The iPOST Act would allow the Postal Service, based on meeting 
certain conditions, to introduce new non-postal products and services, 
ship beer, wine and distilled spirits, and partner with State and local 
governments in providing government services.
  In introducing this bill, I invite all interested stakeholders from 
around the country, whether they happen to be residents of rural, 
urban, or suburban communities, businesses that use the mail broadly or 
individual customers of the Postal Service, to come to the table and 
work with Congress on a viable path forward. I encourage the mailing 
industry, the postal unions, and Postal Service management to continue 
to discuss reform measures and to view this bill as a possible path 
forward to consensus. To my colleagues on both sides of the aisle, I 
look forward to working with you to make

[[Page S6815]]

what I think is a good bill even better. Again, introduction is the 
first step in this process. I am committed to working together to find 
consensus on this legislation and fix the serious, but solvable 
challenges facing the Postal Service.
                                 ______