[Congressional Record (Bound Edition), Volume 152 (2006), Part 18]
[Senate]
[Pages 23574-23577]
[From the U.S. Government Publishing Office, www.gpo.gov]




               POSTAL ACCOUNTABILITY AND ENHANCEMENT ACT

  Ms. COLLINS. Mr. President, shortly, the Senate will consider H.R. 
6407, the Postal Accountability and Enhancement Act. As the Presiding 
Officer is very well aware, since he has been a key player in molding 
this important legislation, this postal reform legislation has been a 
long time coming. And it is great news for the U.S. economy.
  This legislation represents the culmination of a process that began 
back in 2002 when a group of constituents came to me, sat down with me 
in Maine, and taught me the importance of the Postal Service to the 
viability of their businesses and to the employees they had.
  This coalition of groups included a Maine catalog company, a paper 
manufacturer, a printer, a local financial services company, and a 
publisher. They all came together and it was from them that I learned 
just how vital the Postal Service is to our economy.
  So shortly after that meeting in the summer of 2002, I introduced a 
bill to establish a Presidential commission charged with examining the 
problems of the Postal Service and charged with developing specific 
recommendations and legislative proposals that the Congress and the 
Postal Service could implement.
  The President appointed the members of the commission. They worked 
very hard. They came up with an excellent report which provided, in 
many ways, the basis for the landmark legislation that I believe we 
will finally clear tonight.
  During the next 4 years, the Homeland Security and Governmental 
Affairs Committee, which I had been privileged to chair, worked very 
hard to craft the most sweeping changes in the U.S. Postal Service in 
more than 30 years.
  Senate passage of this legislation will help the 225-year-old Postal 
Service meet the challenges of the 21st century.
  As a Senator representing a large rural State, I want to ensure that 
my constituents, whether they live in the northern woods or on our 
islands or in our many small rural communities, have the same access to 
Postal Services as the people of our cities. If the Postal Service were 
no longer to provide universal service and deliver mail to every 
customer, the affordable communications link upon which many Americans 
rely would be jeopardized. Most commercial enterprises would find it 
uneconomical, if not impossible, to deliver mail and packages to rural 
Americans at the affordable rates charged by the Postal Service.
  But for several years now, the Postal Service has clung to the edge 
of an abyss. Under the business model in which it has been forced to 
operate, the Postal Service has been at great financial risk. In fact, 
the Government Accountability Office aptly describes it as a potential 
death spiral in which escalating rates lead to lower volume, which in 
turn leads to even higher rates, which in turn causes the Postal 
Service to lose more business.
  The Postal Service faces the challenge of the electronic age while 
saddled with more than $60 billion in unfunded liabilities and 
obligations, including $2 billion in debt, $8 billion for workers' comp 
claims, $4 billion for retirement costs, and at least $50 billion to 
cover retiree health-care costs. The Comptroller General of the United 
States, David Walker, has cited these figures to point to the urgent 
need for ``fundamental reforms to minimize the risk of a significant 
taxpayer bailout for a dramatic postal rate increase.'' And it is 
telling, indeed, that the Postal Service has been on GAO's high-risk 
list since April of 2001.
  With this landmark reform legislation, we will put the Postal Service 
on a firm financial footing. We endorse the principle of universal 
service, of affordable, predictable postal rates. This legislation will 
modernize the Postal Service's rate-setting process and provide much-
needed rate predictability for postal customers. Without this reform, 
postal ratepayers would have faced billions of dollars in higher--much 
higher--rates over the next several years.
  The 750,000 career employees of the Postal Service often labor 
without anyone really knowing who they are, but their efforts play an 
absolutely essential role in the American economy. The Postal Service 
is the linchpin of a $900 billion mailing industry that employs 9 
million people in fields as diverse as direct mailing, printing, 
catalog companies, paper manufacturing, publishing, and financial 
services. The health of the Postal Service, therefore, is essential to 
the vitality of thousands of

[[Page 23575]]

companies and the millions of employees they serve.
  This bill represents years of hard work. As chairman of the committee 
with jurisdiction, I held a series of eight hearings, including a joint 
hearing with our House colleagues, during which we reviewed the 
recommendations of the President's commission and we heard from a wide 
range of experts and stakeholders, including representatives of the 
postal employees unions, the Postal Service itself, administration 
officials, mailers, the postmasters, postal supervisors, publishers--a 
wide variety of groups. In fact, there is a broad coalition supporting 
this bill, including many nonprofit mailers, which rely on affordable 
postal rates.
  There are many people who have worked very hard to craft the very 
delicate compromise that is before us tonight. I particularly thank 
Senators Carper, Coleman, and Lieberman for their assistance but also 
our House colleagues. I will have more to say about them later.
  The compromise legislation before the Senate replaces the current 
lengthy and litigious rate-setting process with a rate cap-based 
structure for products such as first class mail, periodicals, and 
library mail. For 10 years, the price changes for market-dominant 
products like these will be subject to a 45-day prior review period by 
the Postal Regulatory Commission. The Postal Service will have much 
more flexibility, but the rates will be capped at the CPI. That is an 
important element of providing 10 years of predictable, affordable 
rates, which will help every customer of the Postal Service plan.
  After 10 years, the Postal Regulatory Commission will review the rate 
cap and, if necessary, and following a notice and comment period, the 
Commission will be authorized to modify or adopt an alternative system.
  While this bill provides for a decade of rate stability, I continue 
to believe that the preferable approach was the permanent flexible rate 
cap that was included in the Senate-passed version of this legislation. 
But, on balance, this bill is simply too important, and that is why we 
have reached this compromise to allow it to pass. We at least will see 
a decade of rate stability, and I believe the Postal Rate Commission, 
at the end of that decade, may well decide that it is best to continue 
with a CPI rate cap in place. It is also, obviously, possible for 
Congress to act to reimpose the rate cap after it expires. But this 
legislation is simply too vital to our economy to pass on a decade of 
stability. The consequences of no legislation would be disastrous for 
the Postal Service, its employees, and its customers.
  Among other highlights of the compromise, the bill will reform the 
Postal Service workers' compensation system to require a 3-day waiting 
period. This is consistent with every State workers' compensation 
program. The bill introduces new safeguards against unfair competition 
by the Postal Service in competitive markets, prohibits subsidization 
of competitive products by market-dominant products, and requires an 
allocation of institutional costs to competitive products.
  I note that we looked at competitive issues with UPS and FedEx, and I 
think we have come up with the right balance here. The bill transforms 
the existing Postal Rate Commission into the Postal Regulatory 
Commission with enhanced authority to ensure that there is greater 
oversight of the Postal Service as its management assumes greater 
responsibility.
  The bill reaffirms postal employees' rights to collectively bargain. 
It changes the bargaining process only in small ways and only in ways 
that have been agreed to by both the Postal Service and the four major 
unions.
  Another significant provision amends the current law to essentially 
free up $78 billion over 6 years. This is a complicated issue. It has 
to do with the responsibility for paying for the military retirement 
credits of postal employees and also money that was put into an escrow 
account to compensate for an overpayment into the civil service 
retirement system. These savings will be used to pay off debt to the 
U.S. Treasury, to fund health care liabilities, and to mitigate future 
rate increases.
  This compromise is not perfect and, indeed, earlier tonight, there 
were issues raised by the appropriators--legitimate issues--that 
threatened at one point to derail the bill again. It has been a 
delicate compromise to satisfy all of the competing concerns. Everyone 
has had to compromise, but I think we have come up with a good bill. 
This compromise will help ensure a strong financial future for the U.S. 
Postal Service and the many sectors of our economy that rely on its 
services, and it reaffirms our commitment to the principle of universal 
service that I believe is absolutely vital to this institution.
  Finally, there are so many people both within Congress, within the 
administration, and among the stakeholders who have worked very hard to 
bring this legislation to a successful conclusion. I cannot name them 
all, but I want to name some of them.
  Senator Carper and his staffer, John Kilvington, have been here every 
step of the way. Senator Carper was the original cosponsor of the bill 
and has worked very hard to bring the compromise about.
  Senators Lieberman, Coleman, Akaka, and Voinovich also have played 
very important roles.
  Our leaders, Senator Frist and Senator Reid, have been vitally 
interested and have helped us get this job done.
  In the House, Chairman Tom Davis and the ranking Democrat Henry 
Waxman of the Government Reform Committee, also worked hard to produce 
a bill and to work with us to bring about the compromise.
  A true hero of this effort, a person who worked on postal issues for 
a decade, is Congressman John McHugh.
  The administration has played an absolutely critical role in bringing 
us to where we are today. The administration often doesn't get credit 
for that, and they deserve credit. They have worked with us to come up 
with solutions on the financial issues in this bill, and without the 
strong support of the administration, we would not be here tonight.
  I want to particularly salute OMB Director Rob Portman; Michael Bopp, 
my former staff director, who is now working at OMB and brought his 
expertise to bear on this issue; Jess Sharp and Candi Wolff of the 
White House staff; and of course the staff of the Postal Service 
itself, which was always there with expertise, particularly Kim Weaver.
  But most of all, I thank Ann Fisher of my staff, who has worked for 
years on this bill. This has been an issue which has meant a great deal 
to her, and she has been working on postal issues for a long time. She 
is a recognized expert, and without her expertise, we would not be here 
tonight.
  I finally also want to thank the committee's new staff director, 
Brandon Milhorn, for bringing his judgment to bear on this issue.
  There are so many people who have worked so hard, but the collective 
effort of everyone has produced a bill of which we can be proud.
  It is not a perfect bill, but I am convinced it will put the U.S. 
Postal Service on a sound financial footing for years to come.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. CARPER. Mr. President, I concur with many of the remarks the 
Senator from Maine has made. She has listed a host of people who played 
critical roles in the adoption of the legislation, hammering out a 
difficult compromise over the last 4 years. I salute her for her 
leadership and thank her for her leadership.
  I especially say thank you to Ann Fisher, who has served for Senator 
Collins and really for us, for the great work she has done in the 
course of this effort.
  I have been blessed with my own staff and a young man named John 
Kilvington from New Castle, DE, who came here with me 6 years ago and 
became an expert of his own with respect to postal reform, and has 
worked long and hard, even into this night, to bridge our differences 
and to get us over one last hurdle.
  There is a reason why we only do postal reform once every 36 years, 
and

[[Page 23576]]

the reason is that it is tough to do. There are so many competing 
interests--mailers large and small in areas rural and urban, the labor 
unions involved trying to do their best to represent hundreds of 
thousands of postal employees; there are competitors, UPS and FedEx, 
that didn't exist a number of years ago.
  In fact, if you go back in time to 1970 when the current business 
model for the Postal Service was created by then junior Senator Ted 
Stevens, who today is our President pro tempore and one of the most 
senior Senators in the Senate, he provided the leadership in 1970 to 
create the U.S. Postal Service.
  At the time and for many years thereafter, it was the right business 
model for providing postal service to the people of this country. But a 
lot has changed since 1970. In 1970, I was a lieutenant JG on the other 
side of the world in Southeast Asia the year the Postal Service, as we 
know it, was born.
  One of the things different--I think of the current war that many of 
our soldiers, sailors, airmen, and marines are waging--in the Vietnam 
war, we didn't have any e-mails. We had mail call. It was one of the 
highlights of our day every day. We had no cell phones with which to 
communicate with our loved ones. We had no bank by phone. We had no 
electronic banking. Direct deposits were new. There was no such thing 
as a FedEx or UPS to provide the kind of competition the Postal Service 
faces today, and no threat of anthrax in the mail.
  The world has changed dramatically, and also the way that we exchange 
information, the way we communicate with one another has changed 
dramatically, too. The Postal Service needs to change as well. With the 
adoption of this legislation, it will.
  I extend my heartfelt thanks to our colleagues in the House of 
Representatives with whom we have served and worked on this challenge, 
particularly Congressman McHugh who led the fight for a decade or more, 
Congressman Davis who chairs the relevant committee in the House, and 
also Congressman Henry Waxman, with whom I served years ago in the 
House, entered the fray and helped, along with Congressman Davis and 
others, to get us to the finish line.
  I don't want to belabor what this bill does or does not do, but it 
acknowledges this is not 1970 anymore; this is 2006. We will still have 
universal delivery for the mail. We will still receive that mail 6 days 
a week. The Postal Service will still be expected, when somebody builds 
a new house or starts a new business, to deliver mail to those places.
  I am told during the course of the year at least a million new 
customers come online for the Postal Service, and the Postal Service 
will be there through rain, sleet, and snow to deliver the mail to all 
those customers.
  The Postal Service under the legislation we have is going to act more 
like a business. They will have an opportunity to price their products 
more competitively and overall can put together a whole slew of postal 
products. Overall, the price of those products cannot go up in a given 
year by more than the rate of inflation, but individual products can. 
Product A can go up more than product B and product C more than product 
D. Over the next 10 years, the overall increase in the cost of postal 
products can rise above the cost of living. That will provide a measure 
of stability to the huge industry that relies on the post office and a 
good postal service.
  For those who compete with the Postal Service--and there are very 
strong and good competitors; UPS and FedEx are among those--they will 
have the opportunity to continue to compete, but I think they will be 
on a playing field that is a bit more level where the first-class mail 
the Postal Service will continue to enjoy a monopoly on will not be 
able to underwrite the cost of their competitive products with 
companies such as UPS and FedEx.
  One of the things I am happiest about--and I give Senator Collins the 
credit on this for convincing the administration to agree on two 
points: One, folks who served in the military to come to work in the 
Postal Service and eventually earn a postal pension. The mailers, 
people who buy stamps, mailers large and small shouldn't have to pay 
for the military service that later accrues to those same individuals 
when they retire from the Postal Service. It is not fair to the 
mailers. It is not fair to the public. Those costs should be borne by 
the Treasury, and under this bill they will be.
  And secondly, for many years folks thought the Postal Service was 
underpaying its pension costs for its employees. A couple years ago the 
Office of Personnel Management did a study and found that rather than 
underpaying pension obligations, they are overpaying, and if they 
continue at the rate they are going, they will be making a big 
overpayment in the years to come.
  This legislation corrects that situation. It says that in the future, 
the Postal Service, 10 years out, will have access to a fair amount of 
money that would have gone into overpayments. In the meantime, a lot of 
money is going to be used to pay down the unamortized cost of health 
care. Tens of billions of costs will be paid off, and that will put the 
Postal Service in stronger financial shape going forward.
  Lastly, I want to mention the administration. I know Senator Collins 
has as well. In the negotiations that lasted for years on this 
legislation, the administration, particularly in the last weeks, 
especially played a constructive role. I single out among those Michael 
Bopp, who previously served on the staff for Senator Collins, and his 
help was critical, as was that of Rob Portman and a number of others in 
the administration.
  Our people said this is perfect legislation. I am not aware of any 
perfect legislation I have been associated with. This was a hard one to 
put together. My dad used to say that the hardest things to do are the 
things that are worth doing. If that is any indication, this is 
something worth doing. I am grateful to all who played a part.
  The hour is late, about 2:20 in the morning. I am ready to call it a 
day, and I know we will have other business to do.
  Again I thank my colleagues, those within the mailing public, the 
Postal Service, Jack Porter, our Postmaster General, and all who worked 
to get us to this point in time, and particularly to Patty Murray who 
worked with us tonight to get past a real tough spot.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. FRIST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FRIST. Mr. President, while the chairman of the Governmental 
Affairs Committee is on the floor, I want to say congratulations, 
through the Chair, to her for a tremendous success on the Postal 
Accountability and Enforcement Act which will be passed shortly. It was 
a tremendous accomplishment and one she and I have been in touch with a 
lot by e-mails in the middle of the night, as it came to my mind how 
important this particular bill is. I will say a few remarks about that.
  I did want to congratulate her for a tremendous success on a bill 
people said was impossible to pass, and 6 months ago people said it was 
impossible to pass, and a month ago people said it was going to be a 
challenge, and even 3 days ago saying it was a challenge. But in a 
bipartisan way coming together, bicameral--the House and Senate--it is 
a tremendous accomplishment.
  For more than 225 years, America's postal system has kept Americans 
connected. We depend on the Postal Service to keep in touch with family 
and friends, to send birthday greetings, ship care packages--and a 
little taste of home--to our students, pay the bills, and even to learn 
we might win a million dollars if we act right now.
  The U.S. Postal Service operates on a single, deep-rooted principle: 
Every person in the United States--no matter who, no matter where--has 
the right to

[[Page 23577]]

equal access to secure, efficient, and affordable mail service.
  Today, that translates into serving 7.5 million customers daily in 
over 37,000 post offices, providing stamps at more than 27,800 vending 
machines, nearly 25,500 commercial retail outlets, nearly 15,300 
banking and credit union ATMs, and 2,500 automated postal centers, and 
delivering 212 billion pieces of mail annually to over 144 million 
homes, businesses, and post office boxes in virtually every city and 
town in the country.
  But the Postal Service we know today is vastly different than our 
ancestors knew 225 years ago or even 75 years ago or 50 years ago. 
Before there were ZIP codes and mail carriers with home delivery 
routes--before Priority Mail and Express Mail, before air mail--the 
Postal Service was an informal network that kept settlers and colonists 
in touch with each other and their homelands.
  The U.S. Postal Service's history is a story of transformation from 
the steamboats and the pony express in the 19th century, to delivery 
confirmation and online package tracking of the 21st century.
  But in order for the Postal Service to take the next step, in order 
for the Postal Service to continue delivering on the promise of its 
fundamental operating principle, Congress must act, and tonight we will 
do just that.
  The Postal Accountability and Enhancement Act enables the Postal 
Service to maintain its competitive edge. It streamlines the rate-
setting process for market-dominant products, such as first-class mail, 
periodicals, and library mail.
  It removes the redtape and increases the efficiency of the rate-
setting process by granting new authorities to the Postal Regulatory 
Commission and the Postal Service Board of Governors.
  It introduces new safeguards against unfair competition by the Postal 
Service in competitive markets. It transforms the Postal Rate 
Commission into the Postal Regulatory Commission and grants the new 
body enhanced authorities to ensure appropriate oversight of postal 
management.
  It ensures increased financial transparency by requiring the Postal 
Service to file certain financial disclosure forms in detailed annual 
reports.
  It reaffirms USPS employees' right to collectively bargain by 
instituting changes already agreed upon by the Postal Service and the 
four major unions.
  It brings continuation of payrolls into lines already established by 
every State's workers compensation program, and it increases the 
fairness of USPS employees' pension benefits.
  This bill is comprehensive in the scope and depth of the reforms it 
institutes. But these changes are necessary and essential to helping 
the U.S. Postal Service continue its more than 225 years of reliable 
and efficient mail service. I once again congratulate Chairman Susan 
Collins, and I do thank my colleagues for joining me in supporting this 
very important measure.

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