News & information

House takes up postal reform

On July 17, Rep. Darrell Issa (R-CA), chairman of the House Oversight and Government Reform Committee, held a full committee hearing to discuss his discussion draft of a possible postal reform bill. This was the second House hearing on postal reform held this year.

Invited to testify were American Postal Workers Union President Cliff Guffey, Postmaster General Patrick Donahue and Quadgraphics President and CEO Joel Quadracci. Rep. Adrian Smith (R-NE) also was called to be on the panel as a representative of rural postal customers. NALC President Fredric Rolando testified at the first hearing in March.

Issa announced a number of modest improvements to his proposed bill—including his intention to incorporate into it Rep. Stephen Lynch’s (D-MA) H.R. 961 (more on that below)—but the chairman’s proposed legislation would cripple the Postal Service by eliminating door-to-door service and Saturday mail delivery, while leaving in place the onerous mandate to pre-fund the health benefits of future retirees. In fact, the cost of pre-funding would rise, not fall.

“The Issa bill still falls far short of what the Postal Service desperately needs—and in fact, this bill could be destructive,” Rolando said. “That’s because it proceeds from a false premise—that the Postal Service is irreversibly failing.”

To refute that notion somewhat, Donahoe testified that although the Postal Service had projected an operating loss of $2 billion loss for fiscal year 2013 (a total loss of $7.6 billion with the scheduled $5.6 billion pre-funding payment factored in), “We’re going to finish our finances approximately about a billion dollars better than we said at the beginning of year, because we’ve had revenue increases—especially in the package business.

“We’ve also been able to work and take advantage of negotiated contracts with our union leaders,” he added, “so that’s helped.”

There is little else in the Issa draft that distinguishes it from the bill he proposed in 2011. That measure, H.R. 2309, also called for massive cuts that, if implemented, would drastically diminish the quality and value of the mail by eliminating Saturday mail delivery service and phasing out door-to-door delivery to nearly 40 million American households. The bill managed to gain only one other co-sponsors besides Issa, and it never advanced beyond his committee to a House of Representatives vote.

One positive note was sounded when the California Republican also announced at the hearing that he plans to include in his bill the proposals found in Rep. Lynch’s H.R. 961. That measure calls for using postal-specific assumptions when evaluating USPS’ FERS-account surpluses. The USPS Office of the Inspector General estimated that an approach like this would result in a $12.5 billion postal surplus.

“Those surpluses should be measured properly,” NALC President Fredric Rolando said in his written response to the discussion draft, “and the released funds should be used to pay down the liability for future retiree health benefits and to allow the Postal Service to invest in new ways to help it build on its growing success in package delivery.”

In the last Congress, a similar bill introduced by Lynch, H.R. 1351, attracted 230 co-sponsors from both parties.

Downsizing USPS

Following the hearing, Issa formally introduced his draft as H.R. 2748, The Postal Reform Act of 2013. The bill targets the elimination of more than 100,000 postal jobs and would dramatically cut service.

“Cuts such as the ones the chairman has proposed would drive more mail out of the postal system and could send the Postal Service into a death spiral,” Rolando said, “and they would diminish USPS’ ability to take advantage of the obviously booming e-commerce market.”

The president stressed that more than 80 percent of the Postal Service’s losses in recent years have nothing to do with mail delivery. They result from the 2006 congressional mandate to massively pre-fund future retiree health benefits. Though Issa’s bill alters the pre-funding formula, it does not alter the burden of a mandate shared by no other private company or public agency in America. In fact, were proposals in Issa’s draft to be implemented, the USPS could wind up on the hook for an extra $5.8 billion over the next 11 years, under a revised pre-funding schedule.

Issa held a mark-up for H.R. 2748 on July 24. Click here to view the mark-up session's web page.

Click here to read the NALC response to Issa’s bill.

Click here to read why we asked all committee members to vote no.

Meanwhile, Rep. Elijah Cummings (D-MD), the ranking member of the House Oversight and Government Reform Committee, has introduced a postal reform measure of his own: H.R. 2690, The Innovate to Deliver Act of 2013.

“Cummings’ draft does address many of our legislative priorities,” Rolando said, “but it ultimately falls short of what is needed as well.”

The Maryland Democrat’s measure doesn’t go far enough to solve the pre-funding problem, the president said. “Instead, it too accepts the idea that downsizing somehow provides a path toward prosperity.” Click here for our full response.