Sen. Tom Carper On Passing Postal Reform This Year

AL URBANSKI: Hello, everyone, and welcome to DC Direct, where we talk to movers and shakers in Washington about issues affecting direct marketers.  I’m Al Urbanski, Senior Editor of Direct Marketing News.

Today we are honored to have with us a very special guest, a noted patriot and public servant.  As a Navy flight officer, Tom Carper flew several missions in Vietnam.  After completing his service, the native Virginian studied for his MBA at the University of Delaware and remained in the First State, becoming its Treasurer and later its 71st governor.

Today, Senator Carper is familiar to all of you as the leader of the postal reform movement in Washington.  He is the Chairman of the Homeland Security and Governmental Affairs Committee and co-author, with Senator Tom Coburn, of the Postal Reform Act currently awaiting action in the Senate.  Senator Carper, it’s a pleasure to have you with us today.

SENATOR TOM CARPER:  Al, great to be with you.  Thanks for this opportunity.

URBANSKI:  And I have to apologize.  I’m happy with myself that I didn’t mix up Carper and Coburn.  I often do that in my copy, so I apologize for that, if you happened to ever read that.

CARPER:  His initials are T.C., mine are T.C., and those are the most common two initials in the U.S. Senate, and people refer to us as TC-Squared.

URBANSKI:  Excellent.  Well, both of you senators wasted no time following the summer recess in calling your Senate colleagues to action on the issue of postal reform.  Just last week, you and Senator Coburn published an op-ed in USA Today.  You were also, I believe, in Politico imploring Congress to help fix the post office with some legislation.  So do you think there’s still a realistic chance for passing a postal reform bill in this Congress?

CARPER:  Oh, absolutely.  I think the idea of allowing the Postal Service to continue to twist in the wind with an uncertain future–that’s just no way to run a business, and it undermines their ability to attract new business.

The appropriators in this Senate are being asked to consider just including in a funding bill that might–it’s a have-to-pass funding bill–a prohibition against closing any more mail processing centers across the country.  If that’s all we do, we’ve lost a huge opportunity.  We can actually fix the problem.  That’s what we need to do.

And the Postal Service has overpaid its obligation in the Federal Employee Retirement System.  They’re owed a refund, and we need to fix the funding formula so they don’t continue to overpay.  The Postal Service pays more money into Medicare than any employer in the country, and they don’t get fair value, their retirees don’t get fair value, and neither does the Postal Service.

The Postal Service would like to be able to do a few things that they can’t do already.  One of those is to deliver wine and beer and spirits, but there are others, as well, other opportunities.  They don’t want to be a life insurance policy.  They don’t want to be a bank or anything.  But there are some things that work in the digital world that are, I think, consistent with what the Postal Service does.

So there’s any number of opportunities that we can use–pass legislation, actually fix the problem, provide the Postal Service with the money they need to modernize their fleet, to modernize their mail processing centers and modernize the Post Office. We should fix the problem.

URBANSKI:  Yeah, absolutely.  Yeah, you’ve expressed admiration in the past for the efforts put in by Postmaster General Pat Donahoe and his senior management improving the prospects for the Postal Service.  Realistically speaking, how long do you think the Postal Service could survive without legislation?  Is the dissolution of the post office a real possibility without some governmental action?

CARPER:  I try not to be hair-on-fire on this.  The problem here is the lack of certainty.  Businesses need predictability and certainly.  They need it with their customers, they need it with their suppliers.  And what the Postal Service has is just a tough time going out to explore potential avenues of new business, new revenues.

When there are questions about the long-term viability of the Postal Service, we can address those. We can address those with legislation that I think has already drawn strong bipartisan support coming out of the Homeland Security and Governmental Affairs Committee, legislation that Dr. Coburn and I have worked on actually for years.

And I think the idea of the Postal Service continuing to like twist in the wind, not just for weeks or months but for several more years, that’s foolish.  We don’t need to do that.  We can actually, as I said earlier, fix the problem, but the Postal Service on a path to be viable and strong and not be a burden on taxpayers.

URBANSKI:  Yeah, let’s talk about the political challenge you face now, because obviously you have been pretty aggressive in bringing this issue to the fore, with the midterm elections taking attention away from day-to-day business in Washington.  The last two, I believe, postal bills passed in lame-duck sessions, if I’m not wrong.  So would this be a natural thing to try to — for postal legislation to get done in this lame-duck session?  And is there less of — If it doesn’t get done in the lame-duck session, what are the chances of its continuance in the 114th Congress?

CARPER:  Well, there are a lot of priorities to get done in the lame-duck session.  Among the ones for me, this is one of my top three.  The others deal with cybersecurity.  Another one deals with funding, fully funding a six-year transportation plan.  And then the Postal Service.

Each of those three have a lot of bearing on and effect on whether or not our economic expansion or economic recovery will continue.  And when I present this to my colleagues, I remind them that there are 7 or 8 million jobs in this country that depend directly or indirectly on the Postal Service. And one of the best ways to better ensure that this economic recovery continues unimpeded is to pass legislation that makes it possible for the Postal Service to be successful, enables them to serve 7 or 8 million jobs in this country and not be a burden on taxpayers.  So I think there’s a strong argument that we should get it done

We have to bring to the floor. Dr. Coburn and I need to bring a bill to the floor that can be debated in a day or two, each side could have a certain number of amendments, maybe a half-dozen or so amendments.  We’d debate those, vote on those up or down, and then move the legislation.  That’s the idea, not to suspend two weeks, as we’ve done in the past, on postal legislation, but maybe two days max.

URBANSKI:  Yeah.  It’s come to my attention, Senator, from some of my contacts that during this summer, kind of an amazing thing happened, and members of union interests and of business interests, our readers, the bulk mailers, got together and kind of worked up a little plan and came to a little compromise which would — One of the things would be a rollback of the exigent increase if mailers accepted CPI plus 1% for four years.  There would be no change in service standards.  There were several other things.

What about that?  Will some of those issues be brought to the floor, do you think, on the floor of the Senate, and will this unusual compromise between the unions and the mailers have a day in court?

TOM CARPER:  We shouldn’t be surprised that this alliance–some would call it an unholy alliance.  I would never do that–but this alliance has emerged.  The mailers want to pay, if they can, less money, not a little bit more money, for having their items sent through the mail.

Our friends in organized labor, they want to have a guaranteed six-day-a-week delivery for a long, long time, maybe forever.  And the Postal Service would like to have at some point in time–if the mail volume continues to drop–to get at some point in time that they could have the option of going to five-day-a-week delivery.

Our bill basically says six-day-a-week delivery will continue unless the volume of mail moved by the Postal Service drops below a certain level–it’s 140 billion pieces.  Last year I think it was 158 billion pieces — our legislation pretty much ensures it’ll continue to be six-day-a-week delivery for the next three, four, five years.

But on the on =the exigent rate case that the Postal Regulatory Commission put in place about a year ago.  Our bill says basically that’s the new baseline.  So about a 4% increase in rates, and we would make that the new baseline.  Our friends in the mailing community would like to see that to go away.  But part of the problem is making sure the Postal Service has the revenues they need.

They’ve already almost reduced by half their head count over the last 10 years.  They have cut in half their mail processing centers.  They’ve eliminated as full-time post offices about a third of the post offices in the country.  They’ve done a lot to right-size their enterprise and rein in costs.  We need to do some things to enable them to raise revenues and to be successful in that.

URBANSKI:  You know, our readers, as you know, are pretty stalwart on this issue, and they feel that should some of those other very important issues happen, if the retirement health benefit, that annual $5 billion payment into that fund be changed, that there wouldn’t be this need for the exigent rate increase.  And their feeling — and, you know, it’s something I hear from them all the time, is that they are already the ones paying to subsidize all the other classes of mail.

So is there any give?  Do you think there will be any give on this issue of the exigent rate increase in discussions in the Senate?

CARPER:  I think we’re willing to talk.  We’ve continued to talk, and we’ll continue to do that.  But just to put it in context, what this roughly 4% increase has meant for nonprofits that are sending a letter in the mail, increase–that cost went from 10, roughly 10 cents to 11 cents a letter.  For folks that are sending magazines, I think it went up by a penny, maybe 26 to 27 cents.  For folks mailing catalogs, I think it went up by 2 cents to maybe 46 cents, 48 cents.  These are not huge, huge increases.  And we think that needs to be part of the solution.

One of the things we have in our bill, we have a provision that says by 2017 the Postal Service, in conjunction with the Postal Regulatory Commission and with input from all kinds of stakeholders– mailers and others– would have an opportunity to negotiate a new rate structure.

So we’re talking about something that would be in place for a couple of years before that negotiation occurs.  I don’t think that’s an unreasonable thing.  At the end of the day, there has to be some revenues.  There has to be some further addition to make it possible for the Postal Service to save money.

But the Postal Service, the most important thing, I think, in our bill, Al, is it allows the Postal Service to replace a fleet of 190,000 vehicles that are average age of 22.  They’re energy-inefficient, they break down, they’re not right-sized for the kind of business the Postal Service is doing more of–packages and parcels–and they need to be able to replace their fleet.  That’ll help them save money in the long run.  They need to be able to put all kinds of mail handling equipment in their mail processing centers that reflect all the packages and parcels that they’re handling today.

And frankly, there’s all kinds of technology that could go into vehicles, that can go into mail processing centers, that can go into post offices that will enable the Postal Service to provide better service and enhance customer satisfaction.  We should help them do that.  Our bill provides that money.

URBANSKI:  Got it.  And I know, Senator, it’s easier to handicap horses than to predict what’s going to happen in the Senate or the House of Representatives, but what do you think are the chances for postal reform happening?  Because there are a lot of pessimistic views that I hear on my end, that there’s no way it could happen in the next year.  And should it go into next year and the Republicans take over the Senate, do you see any difference on your committee with new leadership — perhaps Senator Ron Johnson — in pushing for this reform to still become reality?

CARPER:  I’m not going to speculate on election outcomes right now.  We could end up the day after the election and have runoffs in two states.  We wouldn’t know who’s going to be the Senator from Louisiana for another month.  We wouldn’t know who’s going to be the Senator from Georgia for two months.

So right now, let’s just set aside speculating on who’s in the majority, who’s going to be on our committee or any other committee?

All I know is this:  We can fix the problem.  We can actually fix this problem with the Postal Service and give them a bright future, and they will be able to provide better service.  There’s a good road map that’s come out of our committee.  We know that there are going to have to be some changes to that.  We’re willing to continue to negotiate those with our colleagues and with stakeholders.

But we should not — we don’t have to say, we’re going to just put in place legislative language that says, “Postal Service, you can’t close 80 more mail processing centers for the next year.”  If that’s all we do, we’ve just wasted — wasted — a huge opportunity to not just save the Postal Service, but to make it strong and vibrant and a real asset in growing the economy.  That’s what we should do.

URBANSKI:  Great.  And just finally, in wrapping up, Senator, I’ve watched you in several committee hearings on postal issues over the past year or so, and it’s clear to me that you have a special passion for rescuing the Postal Service.  Can you tell me what’s special to you about this issue?

CARPER:  Well, here’s what’s special.  I was governor for eight years of Delaware, for eight years, from ’93 to 2001.  We focused 24/7 on how do we create a nurturing environment for job creation and job preservation in the state of Delaware?  My passion is economic development, job creation.  I think the best thing we can do in my job–or if you’re mayor or governor or president or whatever, the best thing you can do is try to make sure that people who want a job and need a job have a job, have an opportunity to be self-sufficient.  I am passionate about that.

When you have a Postal Service, it’s part of the nurturing environment that touches 7 or 8 million jobs, can help grow the economy, strengthen the economy, or not. For me the passion here is job creation and job preservation.  The Postal Service plays a major role in that.  They can play an even more important role going forward.  I want to make sure they have the opportunity to do that.

My wife said to me the other day, Al–we were driving by a cemetery, and she’s always bugging me about what I–we need to update our will.  We need to do–you know, make sure we have a will so that’s all taken care of if something should happen to us.  I say, “Martha, I feel fine.  I’m perfectly healthy.  So are you.”

And we went by a cemetery the other day, and she said, “What would you like to have as an inscription on your tombstone?”  And I said, “Martha, I don’t even think about that.  What, are you kidding?”  And she said, “No, no, really, what would you want to put?”  And I said in response I thought, What can I say?  Oh, yeah, how about this?  “Return to sender.”  Maybe it could say that.  Then people would say, “He really was passionate about the Postal Service.”  But it’s really job creation.

URBANSKI: Well, that’s a great line to end on with this session, Senator.  Senator Tom Carper, thank you very much for joining us today.  This is Al Urbanski singing off for DC Direct.  

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