[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
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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
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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
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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.
______