[Congressional Record (Bound Edition), Volume 158 (2012), Part 3]
[Senate]
[Pages 3569-3570]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             POSTAL SERVICE

  Ms. COLLINS. Mr. President, the majority leader has indicated that 
the Senate may soon turn to legislation to reform a much needed, much 
beloved American institution--the U.S. Postal Service.
  The Postal Service is nearly as old as our Nation itself. Our 
Founding Fathers recognized the importance of having a Postal Service. 
Article I, section 8 of the Constitution gives Congress the power to 
establish post offices. This is the same section that allows Congress 
to declare war, to coin money, to borrow money on the credit of the 
United States, to collect taxes, et cetera. So, clearly, the Post 
Office was viewed from the very beginning of our Nation as being 
essential to our economic well-being and to bringing together our 
country.
  The Postal Service is also required by law to provide as nearly as 
practicable the entire population of the United States with adequate 
and efficient postal services at fair and reasonable rates. This is 
what is known as the universal mandate and it ensures that the Postal 
Service cannot leave behind our rural States or our small towns. Yet, 
the Postal Service, which has delivered mail to generation after 
generation of Americans, will not be able to meet its expenses sometime 
this fall, according to the Postmaster General.
  In the past 2 years alone, the Postal Service has lost an astonishing 
$13.6 billion. First-class mail volume has dropped 26 percent since 
2006, and the trends are not encouraging. Since no one wants the mail 
to stop being delivered later this year, that means we must pass a 
postal reform bill and we must do so soon.
  The economic impact of the Postal Service is enormous. It is the 
linchpin of a mailing industry that employs more than 8.5 million 
people and generates almost $1 trillion of economic activity every 
year.
  Virtually everyone--from big retailers to small businesses, to online 
shops--relies on the Postal Service to deliver packages, advertise 
services, and send out bills. The jobs of Americans in fields as 
diverse as direct mail, printing, catalog companies, and paper 
manufacturing are all linked to a viable Postal Service.
  Nearly 38,000 Mainers work in jobs related to the mailing industry, 
including thousands at our pulp and paper mills, such as the one in 
Bucksport, ME, which manufactures the paper that is used for Time 
magazine.
  My point is, many of us think in terms of the post office by way of 
the small post office that may be in our community or the friendly 
letter carrier who comes to our door. Certainly, that is an important 
part of the service provided by the Postal Service. But the economic 
impact of the Postal Service is enormous.
  The crisis facing the Postal Service is dire. They cannot lose 
billions of dollars year after year after year and hope to stay in 
business. The crisis is not, however, hopeless. With the right tools 
and action from Congress, the administration, and the Postal Service 
leadership, the Postal Service can reform, rightsize, modernize, and 
continue to serve our country for generations to come.
  My colleagues--Senator Lieberman, Senator Carper, Senator Brown--and 
I have worked extremely hard during the past several months to craft 
bipartisan legislation to update the Postal Service's business model 
and give it the tools it needs to survive and succeed.
  We have introduced a bill that will help the Postal Service reduce 
its operating costs, modernize its business model, and innovate to 
generate new revenue. However, the Postmaster General and I 
fundamentally disagree on how to save the U.S. Postal Service. I am 
concerned--indeed, deeply worried--that he continues to make decisions 
that will severely degrade the service and drive away customers, and 
that will undermine the opportunity for our bipartisan legislation to 
be successful.
  It is clear we have two very different visions on how best to help 
the Postal Service. While each of us wants to ensure that the Postal 
Service is set on a sustainable path, I fear the Postmaster General's 
approach would shrink the Postal Service to a level that will 
ultimately hasten its insolvency.
  I cannot think of another business that would respond to a loss of 
customers by further shrinking its service to its existing customers. 
Most businesses, whether they are large or small, would redouble their 
efforts to better serve their customers in hopes of retaining them and 
attracting new businesses.
  Yet the current plan by the Postal Service would slow the delivery of 
first-class mail, close facilities, and ignore Congress. It flies in 
the face of the good-faith that I and the other negotiators have 
extended to the Postal Service during the many months we have worked on 
the reform bill.
  We have worked hand in hand over a number of months with the 
Postmaster General to craft a bill that would save the Postal Service 
money in a way that prioritizes the lifeblood of the mail: the mailers 
and the service around which commercial mailers have built their 
business models and around which individual customers have developed 
their mailing habits.
  Despite these negotiations, the Postmaster General has pushed ahead 
with plans to abandon the current mail service standards in favor of 
reduced access, slower delivery times, and higher prices. That will 
simply force many customers to pursue delivery alternatives. If those 
adjustments involve shifting to nonpostal alternatives--even in a 
minority of cases, say, 10 or 20 percent--the Postal Service would face 
an irreversible catastrophe. For once customers turn to other 
communications options and leave the mail system, they will not be 
coming back. The result will be that the Postal Service will be sucked 
into a death spiral from which it will be unable to recover. We simply 
cannot allow that to happen.
  What do I mean when I say businesses will adjust their business 
model? Companies large and small that rely on the mail tell me if 
service continues to deteriorate--if the Postmaster General engages in 
these wide-ranging closures of essential processing plants--the Postal 
Service's customers will conduct more business online and encourage 
their customers to switch to online services for bill paying and other 
transactions.
  Other companies, such as small weekly newspapers or pharmaceutical 
suppliers, have told me they would seek nonpostal delivery options, 
such as for local delivery and transport services. Again, let's assume 
only a small fraction of businesses change their operations by shifting 
away from the Postal Service. It still could spell the end for the U.S. 
mail system. Listen to this statistic: For every 5 percent drop in 
first-class mail volume, the Postal Service loses $1.6 billion in 
revenue.
  That is why the downsizing of the labor force and excess capacity the 
Postmaster General states is so critical to saving the Postal Service 
must be carried out in a way that preserves service and does not 
inflict avoidable harm on dedicated postal workers.
  Too many in the Postal Service leadership have assumed this simply 
cannot be done, that it is impossible. But the fact is there are many 
options to cut costs and expand revenue while preserving service. Let 
me just mention some of them. Several of them are in the bipartisan 
bill.
  First, we could reduce the size of processing plants without closing 
them. I have suggested this for the processing plant in Hampden, ME, 
that is on the chopping block. It should not be because it means that 
mail from northern Maine would have to make a 622-mile round trip for 
some northern Maine communities in order to be processed. But if the 
processing plant is too big, reduce its footprint. Rent out part of the 
plant. That would even generate revenue and rightsize the processing 
plant without hurting delivery times.
  We could move tiny post offices into local grocery stores. We could 
and

[[Page 3570]]

should and must reform an expensive and unfair workers' compensation 
program that costs the Postal Service more than $1 billion a year.
  We could allow the Postal Service to ship wine and beer the way its 
competitors can.
  We could refund and should refund an overpayment into the Federal 
retirement system that amounts to between $10 billion and $11 billion.
  The Postmaster General says he can develop a new health care plan 
that would greatly decrease the need to prefund future retiree 
benefits.
  We could use buyouts authorized by our bill to encourage employees to 
retire. Many postal workers are eligible for retirement.
  But, sadly, the Postmaster General is, instead, proceeding with a 
disastrously flawed plan, as is evidenced by the recent announcement of 
Draconian processing plant closures. This coupled with the still-
pending closures of nearly 4,000 mostly rural post offices and the 
Postmaster General's push to eliminate overnight and Saturday delivery 
tell me the current postal leadership is gravely underestimating the 
consequences of lesser service on revenue from customers who depend on 
the service as it is provided today. That is not to say there is not 
excess capacity. That is not to say the workforce should not be 
reduced, but it can be done so in a smart way and a compassionate way.
  It also suggests the Postmaster General is prepared to have rural 
America bear the brunt of severe reductions in service that violates 
the universal service mandate.
  The Postal Regulatory Commission concluded just that in its analysis 
of the impact of the proposal to end Saturday delivery. It found the 
savings were far less than the Postmaster General had estimated.
  The Postal Service will not be saved by a bare-bones approach that 
will require massive adjustments by its customers. That will drive more 
of them out of the Postal Service. Perhaps that might have worked in a 
time when customers had no alternatives, such as would have been the 
case decades ago. But today the massive shift to online publications 
and commerce provides many businesses and individual consumers with 
alternatives to using the mail. A good portion of them may well explore 
and settle on those alternatives if the Postal Service makes it harder 
for them to serve their customers. For customers who simply cannot 
adjust their business model, they could be forced out of business, 
taking much needed jobs with them.
  The approach taken by our postal reform bill, the 21st Century Postal 
Service Act, would be to reduce excess capacity while still preserving 
service for the customers of the Postal Service. Our bill would not ban 
the closure of every single postal facility, but it would establish 
service standards and allow for meaningful public comment procedures 
that would ensure that delivery delays and the impact on customers are 
considered. The result would be that most facilities would remain open 
so as to preserve overnight delivery, Saturday delivery, and easy 
access to bulk processing for commercial mailers.
  Our bill would still allow the Postal Service to reduce the workforce 
using buyouts, and it would still allow processing capacity to be 
reduced to match the declining volume. For example, rather than closing 
a plant that has excess capacity, our plan would allow the plant to 
downsize its labor and volume capacity. This could mean running one 
shift instead of two or a half shift instead of a whole shift or using 
one sorting machine rather than two or using half the space and renting 
out the rest, and so forth. That way the plant could still process the 
mail in the region in a timely fashion while saving money and, indeed, 
in some cases, generating more revenue.
  Under the Postmaster General's plan, however, that plant would close, 
and its volume would be processed much further away, thus degrading 
service. The loss in revenue due to dramatically reduced service under 
the Postmaster General's plan would not take place under our plan, and 
the negative ripple effects on customers, jobs, and the broader economy 
would be avoided with our bill set to come to the floor very soon.
  The Postmaster General has nonetheless moved forward with 
preparations for sweeping closures and service reductions. That means 
even if our bill were to pass quickly, get through conference, be sent 
to the President's desk, and start to be implemented over a matter of 
just a few months, the Postal Service's ill-conceived actions would 
already have done damage to its customer base.
  After all, customers have to plan now for what they fear may be 
coming. Customers are already making contingency plans and exploring 
alternatives. In this way the Postal Service has already triggered the 
potential hemorrhaging of customers that our bill would prevent should 
it become law. But on top of the damage already incurred, what this 
reckless move demonstrates is an attitude that is dead set on letting 
the Service deteriorate and ignoring what customers want.
  That attitude seems to be so stubbornly entrenched among the senior 
leaders of the Postal Service that I worry that even if our bill were 
to become law next week, the current Postal Service leadership would 
not enact it properly. Without an attitude of service first, I am 
concerned that all the important processes and considerations we put in 
the bill could just become box-checking exercises for the Postal 
Service; that it is looking to just maintain the appearance of 
compliance rather than embarking on a new path.
  Mr. President, I ask unanimous consent for 2 additional minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. COLLINS. This approach by the Postal Service is all the more 
inexcusable given its unfortunate reputation for fuzzy math. By cutting 
service and raising prices and not fully calculating the resulting 
disastrous revenue losses, the Postal Service has put forth numbers 
that we simply cannot rely upon. Unfortunately, this is not new.
  The Postal Service's assumptions about the projected losses and 
savings from service cuts have proven unreliable in the past, as the 
Postal Regulatory Commission has found. Furthermore, we are relying on 
the Postal Service's data and projections without giving the Postal 
Regulatory Commission the opportunity to provide its advisory opinion, 
which is expected this summer.
  I hope my concerns can be addressed. But it raises real questions 
about whether proceeding with the postal reform bill is futile. If the 
Postmaster General is eroding the customer base and implementing 
service cuts before we can enact legislation, are we just wasting time 
trying to pass a bill? Can we still save the Postal Service?
  So I find myself in a quandary, one created by the Postmaster General 
himself as he shifts from plan to plan, from negotiation to 
negotiation. This makes it extraordinarily difficult for those of us 
who are so committed to saving the historic Postal Service so it can 
continue to be a vital American institution for generations to come.

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