Postal reform bill introduced in U.S. Senate

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A postal reform bill was introduced in the U.S. Senate on Sept. 23, seeking to help the ailing U.S. Postal Service (USPS) with the establishment of two new control boards. One would oversee a kind of receivership for the USPS if it defaults on any of its government payments and the other is intended to prevent politics from influencing plans to reduce the USPS processing infrastructure.

Sen. John McCain (R-Ariz.), who introduced the bill, told Post & Parcel that the USPS is facing the prospect of a $238 billion loss in the next nine years if it continues along its current track.  

As previously reported by Direct Marketing News, the USPS said Sept. 15 that it is considering cutting its processing facilities network by more than half and adjusting service standards to save up to $3 billion a year, changes that would also result in longer processing and mail delivery times. The Postal Service said it is studying whether to close or consolidate up to 250 postal facilities and reduce mail processing equipment by as much as 50%. The changes would shrink the organization's workforce size by as many as 35,000 positions.

The USPS also said in a statement that the delivery service standard would be lengthened to two-to-three days, from the current one-to-three days.

The bill introduced today mirrors legislation introduced in the House in June by Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) and Subcommittee Chairman Dennis Ross (R-Fla.), which also has the same name as McCain's bill: the Postal Reform Act of 2011. However, unlike Issa's version of the bill, McCain's version would not permit the USPS to raise its federal borrowing authority by $10 billion. 

McCain said in a statement that one key provision of the legislation “alone would save the Postal Service billions of dollars annually” through the creation of a Postal Service Financial Responsibility and Management Assistance Authority, which “triggered by a Postal Service default on its federal obligations would replace the Postal Board of Governors with mandates to cut costs, and put the Postal Service back on a path to financial solvency.”

A second key provision, he said, would create a Commission on Postal Reorganization that would use a BRAC-like process to consolidate and close post offices and mail processing facilities. 

“Other provisions in the bill would require arbitrators to take into account the financial health of the Postal Service if labor contracts move to arbitration,” McCain said in his statement. “Additionally, there are certain types of mail upon which the Postal Service routinely loses money,” he said, including periodicals.

The bill would also allow the USPS to move to five-day delivery, for a savings of anywhere from $1.7 to $3.1 billion annually, according to McCain's statement.

The USPS previously asked Congress to allow it to cut about 220,000 positions by 2015, bringing its total workforce to 425,000. The move would decrease the USPS' employee costs by 30%, the Postal Service said.

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