before the Senate Committee on Governmental Affairs 11/5/03

Press Release

November 05, 2003	Contact: Andrea Hofelich (202) 224-4751

SEN. COLLINS TO INTRODUCE LEGISLATION TO REFORM THE POSTAL SERVICE Examines Impact on Postal Workers, Future of Agency During Hearing

WASHINGTON, D.C.—Senate Governmental Affairs Committee Chairman Susan Collins (R-ME) today urged the U.S. Postmaster General to continue taking strong steps to reform his agency, and pledged to introduce legislation to help the Postal Service meet its reform goals. During a Committee hearing today to examine postal service reform recommendations, Postmaster General John Potter testified that the Postal Service faces daunting challenges, such as paying down $7 billion in debt to the U.S. Treasury, covering its enormous long-term liabilities, and trying to cut costs from its nationwide infrastructure and transportation network. It is also hampered by a decrease in First-Class mail volume, which has reduced revenue counted on to pay for more than two-thirds of the Postal Service’s institutional costs. In July 2003, the President’s Commission on the U.S. Postal Service developed a report outlining recommendations to help the agency address those challenges. “In its own Transformation Plan, the Postal Service determined what changes could realistically be made to improve operations, performance and finances,” said Senator Collins. “This plan has been widely recognized as a good ‘first step,’ but that’s exactly what it is—a first step. Without legislation, many of the necessary reforms highlighted in the Commission’s report simply will not happen.” Senator Collins said she intends to introduce legislation to assist the Postal Service with its reform efforts, and that universal service would be an essential goal. “If the Postal Service were no longer to provide universal service and deliver mail to every customer, the affordable communication link upon which many Americans rely would be severed,” said Senator Collins. “Most commercial enterprises would find it uneconomical, if not impossible, to deliver mail and packages to rural Americans at rates that the Postal Service has been offering.” Senator Collins has long been a leader on postal reform, and this is the second hearing she has held this year to examine reform recommendations. Earlier this year, Senator Collins and Senator Carper (D-DE) introduced legislation, now law, to adequately and fairly adjust the U.S. Postal Service payments into the Civil Service Retirement System, thereby averting postal rate increases at least until 2006 and allowing the agency to more aggressively pay down its debt to the U.S. Treasury. Last year, Collins introduced the United States Postal Service Commission Act of 2002, which would establish a Presidential Commission to examine the challenges facing the Postal Service and to develop solutions to ensure its long-term viability and increased efficiency. A few months later, President Bush announced that he would create such a panel.

Press Release

September 17, 2003

Contact: Leslie Phillips
(202) 224-2627

“US POSTAL SERVICE: WHAT CAN BE DONE TO ENSURE ITS FUTURE VIABILITY?”
Senator Joe Lieberman's Statement

Thank you, Madam Chairman, for convening this hearing on the recommendations of the President’s Commission on the United States Postal Service. The Commission was established in December 2002 and was charged with identifying the severe financial and managerial challenges facing the Postal Service, examining potential solutions, and recommending legislative and administrative steps to ensure the long-term viability of the Postal Service.

On July 31, the Commission issued its report, which contains 35 recommendations to reform the Postal Service on a wide range of topics. I commend the Commissioners for their efforts to understand and analyze the many challenges the Postal Service faces, and I believe they have made a number of valuable recommendations. For example, I have long been an advocate for greater financial disclosure by the Postal Service, to provide the American people a full accounting of its fiscal health, and I am pleased that the Commission has also seen the need for such increased financial transparency.

But before I say more about this and other recommendations that I support, I must first express my profound disappointment about parts of the Commission’s report that seem based on the mistaken belief that the problems of Postal Service can be solved by capping and cutting the pay and benefits of its workers. It is hard to think of any institution with a greater impact on virtually every American than the Postal Service, and its effective functioning depends on the continued loyal service and hard work of its employees. I believe that Commission recommendations which would undermine collective bargaining, threaten employees’ economic security, and add to morale problems in the workplace, are misconceived and counterproductive. Such suggestions send the wrong message at the wrong time to postal workers: just when their good will and hard work are most needed to improve the Postal Service’s status, these proposals convey the message that postal workers are part of the problem instead of the solution.

For example, although wages at the Postal Service are now established by negotiation between management and employee representatives under a system of collective-bargaining, the Commission proposes to empower a new presidentially-appointed Postal Regulatory Board to determine what it believes are comparable compensation levels in the private sector and then to forbid collective bargaining agreements to exceed those caps. Collective bargaining, where management and labor are supposed to meet and bargain on a level field, would become a sham if a presidentially-appointed political board suppresses wages by capping or even lowering the compensation levels that can be agreed to.

Another troubling recommendation is the Commission’s proposal to empower managers at the Postal Service to bargain away the pension and post-retirement health-care benefits of workers. These benefits, which are now established in statute, are based on longstanding congressional initiatives and commitments, keeping Postal Service employees under the same health and retirement benefits as federal civil service employees. Breaking these commitments and subjecting pension and retiree health-care rights to negotiation is an unwarranted step that could well result in reduced benefits and hardship to postal workers.

I urge my colleagues on this Committee and in the full Senate to recognize the importance of maintaining our commitment to a professional and fairly compensated postal workforce, and to oppose these and other proposals that try to fix the Postal Service’s problems on the backs of a workforce that delivers for each and every one of us every day.

Despite my deep opposition to some of the Commission’s workforce recommendations, I believe other aspects of its report are worthy of commendation. For example, as I mentioned earlier, I have long supported efforts to improve the transparency of the Postal Service’s financial reporting. In the last Congress, I joined with other members of this Committee to successfully urge the Postal Service to provide more and better financial information on its website, but these improvements were only a beginning. Greater openness is an important first step toward fiscal health and accountability, and I support the Commission=s recommendation that the Postal Service=s financial reporting be enhanced. Whether this reporting should take the form of SEC-like requirements, as the Commission recommends, is a question that needs further study, but it is clear to me that the public and the mailing community, as well as the Postal Service itself, will benefit from this additional disclosure.

I also agree with the Commission that we need to set qualifications ensuring a breadth of experience and skills on the Postal Board of Governors, and that this Board should operate in many ways like successful corporate boards now do. However, I am not convinced that allowing the Board members to select their own successors, as proposed by the Commission, is the right choice for a governmental entity like the Postal Service that must still be answerable to Congress and the public.
Another worthwhile recommendation of the Commission urges the Postal Service to review its entire management structure to reduce unnecessary layers of management and to realign and modernize its organization. This review would help the Postal Service to optimize communications and efficiency throughout the organization and to effectively plan for the future.

Finally, the Commission wisely reaffirmed certain basic principles fundamental to the future of the Postal Service, such as the concept of universal service and preserving the postal monopoly on first class letter mail. However, I believe the suggested role of a new Postal Regulatory Board in “refining” these concepts requires additional review.

Madam Chairman, I know there are many difficult decisions and discussions ahead as we consider these recommendations. This hearing is a good first step. I hope future hearings will allow us to hear from those most affected by the Commission’s recommendations.

SENATOR SUSAN COLLINS TO PRESS FOR UNIVERSAL POSTAL SERVICE FOR RURAL AREAS

September 18, 2003

At a time when half of Maine's post offices have decreased operating hours, Sen. Susan M. Collins, R-Maine, vowed to keep up the pressure on the U.S. Postal Service to retain affordable rates, frequent delivery and convenient access to retail services.

""It is important to me that my constituents living in the north woods, or out on the islands, or in our many rural small towns, have the same access to postal services as the people of our cities," Collins said at a Senate Governmental Affairs Committee, which she chairs.

James A. Johnson, co-chair of the President's Commission on the U. S. Postal Service testified that while he supports Collins' outline of universal service, he said "some [post offices] should be closed."

The commission just completed a year-long study that focused on the half billion-dollar revenue shortfall in a single quarter of this year.

In April, legislation introduced by Sens. Collins and Thomas R. Carper, D-Del. that corrected an existing law that had the Postal Service over-funding the Civil Service Retirement System by approximately $71 billion dollars over 60 years, allowed the Postal Service to delay its next rate increase until 2006 and to more aggressively pay down billions of dollars in debt owed to the U.S. Treasury.

Johnson said one of the commission's major concerns is the long-term decline in First-Class mail volumes, which stems from cheaper alternatives, such as e-mail. Johnson warned that if the issue isn't addressed, the public might have to deal with increasing postal rates.

"We believe the committee needs to address many of these challenges," Johnson said. "And if we don't address the challenges now, there will be a time when we will have destructive rate increases."

President Bush created the President's Commission on the U.S. Postal Service in December 2002 to identify the operational, structural and financial challenges facing the postal service , which employs approximately 843,000 people.

In a letter to Postmaster General John E. Potter Sept. 10, Collins requested information on why almost 200 of Maine's 425 post offices have cut hours, and 99 more have posted notices describing pending cuts.

"I am well aware of the Postal Service's need to reduce operating costs," Collins wrote. "But cutting back on service to rural customers is not the solution."

Gerry McKiernan, a spokesman for the Postal Service said a response letter to Collins letters is in the works, but changes in hours at post offices often result from customer surveys.

"It's not effective to keep a post office open from 9 a.m. to 10 a.m. if no one's coming in during that time," McKiernan said. "We're working with both [Maine] senators so that we can make sure our customers get the service that they need, and at the same time, allowing us to affect efficiency."

Johnson recommended decreasing the postal service's workforce, which now accounts for 76 percent of the agency's expenses, mostly through retirement; creating a board of directors to serve as a governing body, as well as a regulatory board; and rejected the privatization of the postal service.

After the hearing, Collins said she was displeased with the reduction of operating hours at post offices that disproportionately affect working families in the state.

"The reduction of hours troubles me because the very hours they tend to close are the very times that working families would be most likely to use the postal facilities," Collins said. "They tend to reduce the hours by closing during noon hours. That's the very time that many working people make their trip to the post office. It's the only time they can take off of work to do so."

Collins said she was pleased with one of Johnson's recommendations to the committee that would end the post office's sale of stationary and other non-essential postal items, which has upset many gift shop owners and printers in the state.

"I've heard from a lot of small businesses in Maine who have been unhappy with what they viewed as subsidized competition from the postal service in their areas," Collins said.

In a statement, Sen. Olympia J. Snowe, R-Maine, said she would scrutinize any postal reform legislation with an eye toward its impact on Maine.

"There is no question that we need to find ways to help the Postal Service increase its cost efficiency, but we need to proceed with caution," Snowe wrote. "For many in rural communities in Maine and across the country - particularly in those that have lost rail service and bus service and lack high-speed Internet connection - the local post office is the last remaining tangible connection to the rest of the country."

Potter and a member of the General Accounting Office, Congress's investigative arm, will testify at the next scheduled hearing in early November on the commission's findings.

September 17, 2003 Contact: Andrea Hofelich
(202) 224-4751

CHAIRMAN COLLINS CONCERNED ABOUT IMPACT OF POSTAL SERVICE RECOMMENDATIONS ON RURAL COMMUNITIES
Holds Hearing to Examine Postal Service Commission Report

WASHINGTON, D.C.—Senate Governmental Affairs Committee Chairman Susan Collins (R-ME) today praised the Presidential Commission on the U.S. Postal Service for tackling a difficult challenge, but expressed concern over the potential impact proposed postal service reforms would have on rural communities.

During today’s hearing on the 181-page report prepared by the Commission, Collins said, “I greatly appreciate the Commission’s strong endorsement of the basic features of universal service—affordable rates, frequent delivery, and convenient community access to retail postal services. It is important to me that the people of Maine have adequate access to postal services wherever they choose to live.

“If the Postal Service were no longer to provide universal service and deliver mail to every customer, the affordable communication 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 rates that the Postal Service has been offering.

“The preservation of universal service, and many more issues, must be examined in depth if we are to save and strengthen this vital service upon which so many Americans rely for communication and their livelihoods,” Collins said.

The Postal Service is the 11th largest enterprise in the nation. It employs more than 700,000 career employees, and is also the linchpin of a $900 billion mailing industry that employees nine million Americans in diverse fields. However, the Postal Service is presently paying down $6.5 billion in debt to the U.S. Treasury, and its long-term liabilities are enormous—nearly $6 billion for Workers’ Compensation claims, $5 billion for retirement costs, and as much as $45 billion to cover retiree health care costs.

“It is so important for us to consider what can and should be done to ensure the Postal Service’s future viability,” said Collins. “The Postal Service has reached a critical juncture. It is time for a thorough evaluation of its operations and requirements. It is time for action.”

Last year, Collins introduced the United States Postal Service Commission Act of 2002, which would establish a Presidential Commission to examine the challenges facing the Postal Service and to develop solutions to ensure its long-term viability and increased efficiency. A few months later, President Bush announced that he would create such a panel.