Sen. Franken introduces legislation to reform, modernize Postal Service, preserve Saturday delivery

Washington, D.C. –  In an effort to address the financial problems faced by the U.S. Postal Service and ensure that Minnesotans continue to receive rapid, reliable, six-day postal delivery, U.S. Sen. Al Franken (D-Minn.) and seven of his Senate colleagues introduced legislation to modernize the postal service and repeal the law passed by Congress that’s largely responsible for the postal service’s financial problems.

“People all over Minnesota depend on the postal service to get their paychecks and pay their bills, so it’s important that we put this national institution on sound financial footing before it’s too late,” said Sen. Franken.

“It’s clear that we need to take action to modernize the postal service, but the elimination of Saturday delivery will only make things worse by forcing customers to take their business elsewhere. This legislation would address 80 percent of the postal service’s financial problems, preserve Saturday delivery, and modernize the postal service so it can compete in the 21st century economy.”

The measure would let the Postal Service look for innovative new ways to generate revenue by allowing post offices to notarize documents, issue hunting and fishing licenses, and allow shipments of wine and beer—all services currently prohibited at post offices. It also would clear the way for the Postal Service to help customers take advantage of email and Internet services. Moreover, the legislation would create a commission composed of successful business innovators and representatives from small business and labor to make recommendations on other ways the Postal Service could generate new revenue and thrive in the 21st century.

The legislation would also repeal an onerous 2006 law that forces the post office to pre-fund 75 years of future health care benefits for retirees over the course of 10 years – a burden placed on no other government agency, and almost no private businesses. The $5 billion annual payments have been piling up in a fund that experts say already has more than enough in reserve. Since 2007, the pre-funding mandate is responsible for $4 out of every $5 in Postal Service debts. The bill would also reinstate overnight delivery standards to speed mail delivery and prevent shutdowns of mail sorting centers. Safeguards also would be put in place to protect rural post offices.

The Senate bill was introduced by Sen. Bernie Sanders (I-Vt.), and is also cosponsored by Sens. Patrick Leahy (D-Vt.), Kirsten Gillibrand (D-N.Y.), Ron Wyden (D-Ore.), Jeff Merkley (D-Ore.) Tom Udall (D-N.M.) and Sherrod Brown (D-Ohio).

Video and audio of Sen. Franken discussing the future of the postal service is available here:

Sen. Franken also signed on to a letter urging the U.S. Postmaster General to delay the implementation of any service changes to give Congress time to pass a comprehensive postal reform bill. The full text of that letter is below.

Dear Postmaster General:

We write to express our concerns regarding the recent announcement that the Postal Service intends to end Saturday mail delivery service later this year.  We understand the Postal Service faces serious  financial challenges, and we remain committed to working with you to find a solution to the Postal Service’s long-term financial viability as we did last year to pass bipartisan postal reform legislation through the Senate. However, we  believe a piecemeal strategy that focuses on cutting services and forgoes a critical competitive advantage is not the solution.  Instead, we need a comprehensive postal reform bill that allows the Postal Service to modernize while protecting its crucial obligations and services.

First, we believe your proposal does not comply with the existing statutory requirement to continue six-day delivery and rural delivery mail services at no less than the 1983 levels.  As such it is in violation of P.L. 112-175, the Continuing Appropriations Resolution which extends the Consolidated Appropriations Act of 2012, P.L. 112-74. Section 101(a) of P.L. 112-175 specifically extends the funding levels of the FY12 appropriations law, “under the authority and conditions provided” in the previous funding resolution, except as otherwise stated in the CR.  The CR does not contain language abrogating the FY12 provision which requires the USPS to maintain six-day delivery.

It appears that as recently as last year, the Postal Service did not believe it had the authority to end six-day delivery without legislative action by Congress.  For example, in the USPS’s “Plan for Profitability,” released on February 6, 2012, savings for five-day delivery were categorized under the heading of “legislative initiatives.”  Furthermore, you personally delivered testimony before the Senate Homeland Security and Governmental Affairs Committee on September 6, 2011 where you noted that “Congress must act … [to] allow the Postal Service the authority to determine delivery frequency.”Accordingly, we request that you provide a detailed legal justification for this proposed change.

It is our understanding that this change is driven by an effort to reduce costs.  However, it is unclear that the shift to five-day service will benefit USPS in the long-term. In fact, a 2012 USPS-commissioned survey found that service cuts resulting in a 7.7 percent reduction in volume will lead to a $5.2 billion loss in revenue the first year alone. Similarly, an earlier 2011 GAO report found that moving to five-day service would put mail volumes and revenues at risk.  In other words, it could help push the USPS further down the spiral. Specifically, GAO noted that USPS may have overestimated savings by as much as $500 million and that USPS may have underestimated the reduction in volume likely under five-day service.  Businesses that currently utilize USPS services have raised concerns that reducing services will decrease the value of mail, especially periodicals who stated that they “will most likely accelerate shifting their hard copy mail to electronic communications or otherwise stop using USPS if it is unable to provide reliable service as a result of these changes.”

Importantly, moving to five-day service will result in the loss of approximately 70,000 jobs.  Of these, the National Rural Letter Carriers Association projects that a minimum of 20,000 would affect rural communities.   With the national unemployment rate at 7.8 percent, moving to five-day delivery will hurt middle class families.

The change to five-day service is not simply a move to deliver mail on the next day; it will require an overhaul of mail collection and processing times that may affect estimated savings and hurt USPS in the long-term.  The Postal Service has made several other unilateral decisions, such as terminating overnight mail delivery in the Midwest and Mountain West and accelerating consolidations, that run the risk of making the Service irrelevant in large portions of the country. With members of Congress making progress on a comprehensive bill, further changes would set the precedent for a piecemeal approach and potentially further delay much needed legislation.  We urge you to reconsider your decision and not take this action unless authorized by Congress.

 

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