Sen. Tom Carper introduced the Improving Postal Operations, Service and Transparency (iPOST) Act. Carper has said he’d like to see the committee complete its review of the bill and send it to the full Senate as soon as possible.
The United States Postal Service is broken, and Delaware Sen. Tom Carper is hoping to fix it.
In September, Carper introduced the Improving Postal Operations, Service and Transparency (iPOST) Act.
Delaware’s senior senator notes that Congress has the responsibility under the Constitution to establish and maintain post offices. At the same time, Congress is responsible for putting the two and a half centuries of mail service under tremendous financial pressure.
“Our goal is to figure out how to allow the post office to use a legacy distribution network that goes to every mailbox in the country five or six times a week,” Carper said during a Jan. 26 visit to Dover, “[and] to enable them to figure out how to provide universal coverage pretty much to everyone in the country, and still make money doing it and not end up running a loss.”
Since September Carper, as the ranking member of the Senate Homeland Security and Governmental Affairs Committee, has taken part in roundtable discussions and hearings where he has attempted to highlight postal problems and to garner support for the bill, which he feels will put the department back on the road to solvency.
Among its provisions, the 221-page bill would:
♦ Make the current postage rate permanent – it was to revert to December 2013 levels in April – and freeze it until after 2017. ♦ Bar postal facility closings for two years and post office closings for five years. ♦ Allow the USPS to sell nonpostal products and to ship alcoholic products. ♦ Create a new healthcare system for postal employees and require Medicare-eligible employees and retirees to enroll in Medicare. ♦ Among other reforms, do away with healthcare prefunding payments, cut by 20 percent funds set aside for other future obligations and allow the postal service to invest in a fund whose interest could be used to pay down its healthcare liabilities and debts. “Our economy depends on a healthy and robust postal service,” Carper said at a Jan. 21 hearing. “It’s our duty in Congress to pave a fiscally sustainable path for the agency that will enable this American institution to return to solvency, improve services and thrive in the digital age.”
Postmaster General Megan J. Brennan testified the postal service needs “a financially stable business model.” Her agency is in trouble primarily because a 2006 law requires it to provide service that, due to a drop in first-class mail volume, it no longer can pay for, Brennan said.
First-class mail generates most of its operating funds, she said, but the use of the Internet and email, combined with the reverses brought on by the recession, have caused the annual volume of first-class mail to drop from 95 billion pieces in 2007 to 62 billion in 2015.
In that same period, the postal service has lost $56.8 billion, $5.1 billion in 2015 alone.
Although it may have been feasible when the last postal reform act was written 10 years ago, the postal service no longer can afford to prefund healthcare costs for its retirees, Brennan said.
Although it managed to save more than $15 billion by cutting costs over the past decade, the postal service also failed to make the advance healthcare payments, she said.
Brennan called on Congress to consider legislation, like iPOST, to help solve this problem.
“Absent fundamental legislative reform, we face the prospect of having to continue to default on these prefunding payments in order to continue paying our employees and suppliers and to provide postal services to the American public,” she said.
The postal service had a net positive operating income in Fiscal Year 2014 and is expected to do the same once final figures for FY 2015 are in, but it continues to lose money because of the dwindling volume of first-class mail and the need to prefund future healthcare, Carper said.
In terms of the bottom line, instead of losing billions of dollars year the post office would be in a much better position to upgrade its services with new mail processing equipment and new delivery vehicles with better technology. It would be able build new facilities in areas that do not have post offices, he said.
At present, the iPOST bill remains in the Homeland Security and Governmental Affairs Committee. It has picked up four co-sponsors, Democratic Sen. Claire McCaskill of Missouri and Republicans Roy Blunt of Missouri, Jerry Moran of Kansas and Susan Collins of Maine.
Carper has said he’d like to see the committee complete its review of the bill and send it to the full Senate as soon as possible.