US Rep. Darrell Issa (R-Calif.) introduced a sweeping postal reform bill June 23 that would create new oversight bodies to help the US Postal Service restore financial stability. The bill would also allow the USPS to move to five-day home delivery, close retail locations as it sees fit, and sell advertising on facilities and vehicles. Issa estimated that the changes included in the bill would save the USPS at least $6 billion a year.
Issa, the chairman of the House Committee on Oversight and Government Relations, introduced the bill one day after the Postal Service said it will suspend its contributions to the Federal Employee Retirement System.
The legislation would create the Postal Service Financial Responsibility and Management Assistance Authority, which would be mandated to restructure the USPS to bring it back to fiscal solvency. The authority would be disbanded once the Postal Service meets several financial benchmarks, according to the bill.
The legislation would also empower a separate body, the Commission on Postal Reorganization, to recommend closures and consolidations to Congress in an effort to save $2 billion a year. Congress would have to reject the CPR’s recommendations to prevent them from becoming law, according to Issa’s bill. The legislation would also allow the USPS to close unsustainable retail facilities.
The bill would also eliminate disparities between postal workers and other federal employees in terms of wages and benefits, but would provide for $10 billion in borrowing authority from the US Treasury.
“The Postal Service lost $8.5 billion last year. It is going to lose, at least, $8.3 billion this year. And it has projected to lost $8.5 billion the year after that,” said Issa, in a statement. “Congress can’t keep kicking the can down the road on out-of-control labor costs and excess infrastructure of USPS, and it needs to implement reforms that aren’t a multi-billion dollar taxpayer-funded bailout.”
The USPS lost $8.5 billion last year, and executives at the organization have warned that the Postal Service could run out of money by the September 30 end of its 2011 fiscal year. It said June 22 that it will save $800 million this fiscal year by suspending payments to FERS, noting that it has a FERS surplus of $6.9 billion.
The bill would also require all market-dominant products to cover costs, while maintaining the CPI price cap, and increase rates 5% on product classes below 90% cost coverage. It would also reduce rates on nonprofit mailings and allow advertising on the sides of postal trucks and buildings. The legislation also “authorizes the US Postal Service to provide services for state governments that enhance the USPS’ value to the public.”
The USPS said in a statement that “the bill appears to be based on the assumption that the Postal Service’s challenges result from too little regulation. The opposite is true.”
“Our financial instability is the result of dramatic loss in volumes, coupled with restrictions imposed by Congress that have prevented the Postal Service from adequately responding to those losses in a businesslike fashion,” the USPS said in a statement.
The organization also said it strongly opposes portions of the bill that would allow the USPS to borrow money from the US Treasury and those that would “create more government bureaucracy and slow our progress in streamlining our operations.”
The USPS also said it was “pleased the bill recognizes the need for a change in delivery frequency.”
