Mr. President, I rise to urge all of our colleagues to support the pending cloture motion filed by the leaders so we can begin a debate that will help decide whether the U.S. Postal Service--this iconic American institution created more…
Mr. President, I rise to urge all of our colleagues to support the pending cloture motion filed by the leaders so we can begin a debate that will help decide whether the U.S. Postal Service--this iconic American institution created more than two centuries ago, embedded in the Constitution, created in the age of inkwells and quill pens--will survive in the age of e-mail and the Internet.
To me, this cloture vote should be an easy one because if we vote against cloture, we are essentially saying two things: One is we don't want to do anything. If we don't do anything, the Postal Service is going to run out of money and hit its borrowing limit later this year, forcing us to miss payments and unnecessarily begin to shut back or close down operations, which is the last thing the country needs at this point.
Frankly, the other thing we will do if we think we should do nothing is to leave the Postmaster General, the Postal Service, with an unlimited right to take steps that I believe a majority of Members of this body don't want to be taken precipitously without considering the alternative. That alternative is closing thousands of post offices around the country, including small towns in rural areas, and dramatically and quickly cutting back on the number of mail processing facilities, and therefore the standards by which mail is delivered and the speed with which it is delivered in this country. So I hope our colleagues consider this an easy vote, which is simply not to turn away from the crisis the Postal Service is in.
Senator Collins and I are joined by Senator Carper and Senator Scott Brown. We have a substitute that is a bipartisan proposal that I think will help save the post office but also force it to begin to make tough cost-efficient steps to keep itself in fiscal balance.
Let me give a sense of the scope of this matter. The Postal Service today, if it were a private corporation, would be the 35th largest company in the United States based on revenue, putting it just ahead of Apple. It would be the country's second largest employer just behind Walmart. The 32,000 post offices in America represent more domestic retail outlets than Walmart, Starbucks, and McDonald's combined.
These are big numbers, and the post office has a storied history. But today it is a troubled business and, frankly, on the verge of insolvency if we don't act--in part because of the recent economic recession but mostly because of the transformational impact of the Internet. The Postal Service has had a 21-percent drop in mail volume in the past 5 years, and, of course, a corresponding cut in revenue. As more businesses and communication move online, mail volume is inevitably going to continue to decrease.
In fiscal year 2011 the Postal Service took in $65.7 billion but had expenses of $70.6 billion. This $5 billion loss would have actually been twice that if Congress had not delayed the due date for a statutorily required payment to the retiree health plan due at the end of the fiscal year. That followed record losses of $8.5 billion in 2010. This simply cannot continue. As I said earlier, if nothing is done, the Postal Service will not have enough money to pay its bill.
Please vote for cloture. We have a good, solid substitute that is a major reform with some due process that will make the post office leaner and more efficient. It will dramatically reduce the number of employees and the number of facilities the post office maintains, but it will do so in a way that I think is evolutionary and not Draconian either to the Postal Service or the impact it would have on the millions of people who depend on the post office and will continue to every day.
There are a lot of different ideas about how to fix the post office. Some people don't want us to make any changes, and that is the road to bankruptcy. Some people want us to make Draconian changes right away, and I don't think that is appropriate. So I ask for a vote for cloture.
I yield the floor.
I would do the same.
Mr. President, I thank the Chair, and I thank our colleagues for a very strong vote which says to me that Members of the Senate, across party lines, understand that the Postal Service is a historic and also important part of America's future. It needs to change. It is in the midst of a real and dangerous fiscal crisis. We may differ about how to react to that crisis, but this strong cloture vote says to me that three-quarters of the Members of the Senate at least are ready and eager to debate and to pass something that will save the Postal Service from bankruptcy and the implications that would have for our economy overall. The billions of dollars or hundreds of billions of dollars of our economy that depend on the mail would be compromised, and our economy and jobs would be further hurt.
I hope that as the day goes on--obviously, with the strong vote for cloture, we now proceed to a 30-hour period of debate on the matter, but I certainly hope that as the day goes on and the members of both caucuses and the leaders talk we can find a mutually agreeable path not to spend the 30 hours on the debate on this motion to proceed but that we go right to the bill.
At that point, Senator Collins and I, along with Senator Carper and Senator Scott Brown, will file a bipartisan substitute amendment which we have worked on which we hope will be the pending matter and then have an opportunity for people who have a different point of view about how to deal with this fiscal crisis of the post office--not to avoid dealing with it--people will have an opportunity to present amendments, and the body will work its will, which is the most important thing.
There are too many great national problems the Congress is not dealing with because of partisanship, because of ideological rigidity, because of an unwillingness to do what has to be done in our system of government, which is to compromise--not to compromise your principles but to understand that in a representative body such as the Senate, representing a country as big and as diverse as ours, you rarely can expect to get 100 percent of what you want. The aim should be to make progress, to get at least 50 percent of what you want and to let the other side get some of what they want as well.
So I would like to deliver now an opening statement and then hope that the ranking member, Senator Collins, will do the same on the bill, the substitute, which is S. 1789.
I am convinced that the substitute will help make the Postal Service leaner, nimbler, and more cost efficient, while still maintaining the service we Americans need to live our daily lives and to keep our economy going. But I want to be clear: This bill alone is not going to save the U.S. Postal Service. The changes occurring around it and within it are too deep. It will represent a very significant step forward. It will save the Postal Service, as we will indicate as this debate goes on, save billions and billions of dollars annually, and put the Postal Service back on the road to fiscal balance.
I view this bill as a bipartisan compromise, as the middle way between two different approaches to the fiscal crisis at the Postal Service, one that to a certain extent wants to wish it away, to say that really nothing has to change and we just have to find more ways--a different business model--we
have to find more ways for the Postal Service to make money, and we can just keep on doing business as we are doing. The end result of that is that either the Postal Service will collapse of its own weight or the Federal Government--the taxpayers--will be expected to bail it out, and I don't think that is what the American people want us to do. So one way is to do nothing.
The other way is to impose what I would call kind of an immediate overreaction--close thousands of post offices that people depend on across the country, close hundreds of mail processing facilities, which will mean that people will not be able to get their mail and businesses will not be able to realize the expectation of timely delivery of the mail. And it will have a negative impact on this economy of ours which is still struggling to come out of a recession.
We are offering a middle way here that will provide real and substantial savings from the current operating picture of the post office, which is in severe debt and lost more than $13 billion over the last 2 years, but will do it with due process, will do it in a way that requires the post office to look at every alternative before closing post offices that are so important to people in most every area of our country.
This bill, in other words, is an important beginning, and it will allow the Postal Service more time to continue working with its customers, its employees, Congress, and others to develop a balanced approach to what we need it to do in an age when almost every piece of communications that can be digitized is being digitized and sent over the Internet.
But if I may, I would like to step back and offer just a little bit of history because we are dealing with a current problem, but there is a rich history when you talk about the U.S. Postal Service.
It is kind of an accidental irony, a coincidental irony of the Senate bill numbers that this bill turns out to be S. 1789 because 1789 was the year the first Congress under the Constitution was seated. Among the duties of that founding body was the charge under article I, section 8, and I quote, ``to establish Post Offices and Post Roads.'' In fact, in the list of congressional powers detailed under section 8, creating the postal system comes before the creation of an army, a navy, or Federal courts. That is how important the Founders felt this public function would be to our new government, particularly in a democracy, how important communication was, and, in a country that had ambitious economic and commercial dreams right from the beginning, that the ability to communicate through a post office would be critically important to commerce and job creation.
In the Revolutionary era, it was the post office, under the direction of our first Postmaster General, Benjamin Franklin, that sped communications among the members of the Continental Congress and the American Revolutionary military as well as delivered letters and newspapers from across our fledgling Republic that helped keep the citizens of our new country abreast of events in faraway cities and towns.
If you read some of the histories of the Revolutionary War, some of the great biographies done of the founding generation of Americans, that extraordinary and gifted group, you see the role the post office and postal communications played in their ability to keep in touch with each other. And some of the most important communications occurred, for instance, between the government and the military.
Ever since that early period of American history, the post office has had a tradition of aiding progress and innovation. Maps from the early days of our Republic show that many of the roads we still depend on today--if I may be parochial, I will cite I 95 in Connecticut and a lot of other places along that path--still follow and in some cases are built on top of old post roads.
The job of maintaining Samuel Morse's first telegraph line between Washington and Baltimore was entrusted to the post office. And it was a former Postmaster General who helped Morse expand his transformational network of telegraphs and communications to other cities in our country. But that network grew slowly, so to keep our Nation connected with its frontiers way out in places such as Montana, I might say to the occupant of the chair, the post office helped sponsor the Pony Express. That was a great early example of what we talk about a lot but do not do as much as we should--public-private partnerships. The Pony Express filled a necessary gap in communications until the telegraph finally spanned our Nation coast to coast.
The post office's subsidies for airmail in the early days of aviation helped jump-start the fledgling airlines and air freight industries, which, of course, we all depend on so much today.
I will not repeat what I said in my statement about the scope of the Postal Service today when I spoke earlier in support of the vote for cloture, but I will just repeat and say that if the post office were a private corporation, it would be the 35th largest company in the United States just ahead of Apple; that is, by revenue. It would be the country's second largest employer just behind Walmart. Its 32,000 post offices across America represent more domestic retail outlets than Walmart, Starbucks, and McDonald's combined.
But perhaps because of some of that, certainly notwithstanding it, the post office is today a troubled business. I want to speak honestly and directly. It is on the verge of insolvency if we do not act. Part of the problem more recently, obviously, is the impact of the economic recession we are in, but the big problem is one that is not going to get better; that is, business loss to the Internet has led to a 21- percent drop in mail volume in the past 5 years and a slump in revenue as a result. You have to be unrealistic to say anything other than that this trend is going to continue and that mail volume will continue-- first-class mail volume will continue to decrease. As I mentioned, there has been $13 billion in deficit in the last 2 years--running a deficit in the last 2 years at the post office. It would have been $5 billion more if Congress had not come along and delayed the due date for a statutorily required retiree health care prefunding payment that was due at the end of the last fiscal year.
This simply cannot continue. This is one of those bills that come along not because you are excited about doing it but because you have to do it. If we do not act, I repeat, two things are going to happen: Either the Postal Service will become insolvent and have to cut back its operations or the Postmaster will use authorities he has under the current law to close a lot of post offices and mail-processing facilities and cut back service. And I know Members across party lines do not want that to happen precipitously.
Let me now describe some of the major parts of the substitute bipartisan bill that has come out of our committee.
The bill includes the two measures that will relieve some of the immediate financial pressure on the Postal Service. The first is based on an Office of Personnel Management determination that the Postal Service has overpaid its contributions to the Federal retirement system by roughly $11 billion. Call it a misunderstanding, call it a clerical error--it is fortuitous for the Postal Service and the trouble it is in. Our bill directs OPM to refund this money to the Postal Service and then directs the Postal Service to use this money to provide retirement incentives to employees and to pay off some of its debt.
Let me explain what I mean about those incentives. S. 1789, the substitute, would direct the Postal Service to use part of these refunds in the Federal Employee Retirement System to reduce its labor costs, which make up about 80 percent of its budget. There is no way the Postal Service is going to get back in balance without continuing to do what it has been doing, by tens of thousands, reducing the number of employees it has. But the aim here is to do that as a result of a voluntary buyout program.
The fact is that approximately half of the Postal Service's current workforce is eligible for either full or early retirement, and if 100,000 workers took advantage of the program--which is below the full amount eligible--the Postal Service would save $8 billion a year. That is the single most significant saving item in the package that we bring before you today. We set a goal here, which is that the Postal
Service should aim to reduce its workforce with this incentivized retirement program by approximately 100,000 workers or 18 percent of its current workforce.
Our bill also reduces the amount the Postal Service must pay into its retiree health benefits account over the next 40 years. The current formula of scheduled payment was part of postal reform passed some years ago. We conclude that the payments required are larger than necessary to sustain the viability of the retiree health benefits plan, so we mandate an updated amortization schedule to fund postal retirees' health care in the future. It is not just an arbitrary number. We think that means the Postal Service is likely to see a significant cut in its annual $5 billion bill to prefund retiree health care, which, of course, would take further stress off the Postal Service's annual operating budget. We expect, as the debate goes on, to have as close as possible an exact projection of how much that change would save for the Postal Service itself.
Now let me talk about some of the proposals that the Postal Service and Postmaster have made that have been most controversial.
First, Saturday deliveries and canceling most Saturday deliveries. The Postal Service has said it can save $3.1 billion a year by cancelling Saturday deliveries to individual homes and businesses. It is not something you want to do, but if you are looking to get this institution back into balance and keep it alive, it is one of the things we are probably going to have to do. The Postal Rate Commission agrees that ending most Saturday deliveries will save a lot of money, but says their savings estimate is $1.7 billion a year versus the $3.1 billion figure from the Postal Service.
Either way, we are talking about a substantial reduction in costs, and one we may have to face. Our bill recognizes that ultimately it may well be necessary to switch to 5-day delivery. I say it is going to be necessary to switch to 5-day delivery. But we require the Postal Service to follow a certain path over the next few years before that significant step--6 to 5 days--is carried out.
They first have to determine, according to the bill, if the other cost-saving measures in the bill have made canceling Saturday service unnecessary. We can hope that would happen, but I am skeptical that it will.
If a 5-day schedule is deemed necessary, the Postal Service must then submit a plan to Congress, the GAO, and the Postal Rate Commission on how it plans to cushion the negative effect on the businesses and communities it serves.
GAO and the PRC will then submit their own studies to Congress on this matter. If the PRC and the Comptroller General conclude that the change is necessary to allow the Postal Service to achieve long-term financial solvency, then 2 years from adoption the Postal Service will implement a 5-day delivery schedule.
What about the closing of post offices, which has created a lot of concern all across America in response particularly to the Postmaster announcing a list of 3,700 post offices that are possible candidates for closure? One of the things we found in response to this is exactly what I have found over the years in Connecticut. The local post office is not just a place where mail and packages pass through; it becomes a local institution of community significance. It is hard to convince people they should be closed. People are attached to their local post office, not just in small towns and rural areas--especially there--but in a lot of other places, including cities and neighborhoods in a State such as my own State of Connecticut.
The reality is we cannot afford to continue to have as many post offices as we do, operating in the way they do. So our bill would improve the present law covering post office closures. It doesn't prohibit them, but it requires more public participation and due process, and it requires the Postal Service to issue comprehensive retail service standards to ensure that communities throughout the country have access to retail postal services if their current post office needs to be closed--in other words, to look for ways to consolidate retail postal services. Perhaps they can put the retail postal service in a State or local government office building or perhaps put it in a retail establishment or a Wal-Mart or whatever to make sure that the services are maintained in a more cost-effective way, even if the local post office is not.
The bill also requires that the Postal Service take steps before closing a post office that it does not now have to take, including offering a community these other options I have talked about, such as keeping the post office open with more limited hours or permitting private contractors or rural carriers to provide the services the local post office is now providing.
Another one of the controversial proposals the Postmaster made is to close 232 of its current 461 mail processing facilities--not the post offices, but the places the mail goes to be processed so it can get from where it is sent to where it needs to be delivered. The truth is there is excess capacity in this system now, and the Postal Service has to eliminate some of that excess capacity.
However, the bipartisan substitute proposal basically requires that care be taken so this is done in a way that does not compromise the service standards necessary to maintain the current customer base. In other words, we have to reduce expenditures, but if we do it precipitously, as some of our colleagues will propose amendments to do, the net effect is that less people will use the post office, because they will not get the needed service and, as a result, revenues will drop, and probably even greater.
The substitute amendment, therefore, permits the Postal Service to eliminate excess capacity in the mail processing system but again requires the Postal Service to maintain a modified overnight delivery standard--a bit reduced from what it is now, but still there, particularly for the local delivery areas.
The maximum standard delivery time--and most people probably don't know this--the Postal Service accepts a maximum delivery time of 3 days to deliver a letter mailed anywhere in the continental U.S.; it has to be delivered anywhere else in the continental U.S. within 3 days. That will remain unchanged. The Postal Service would be required to maintain a sufficient number of processing facilities to meet these delivery standards but could otherwise close unneeded facilities.
So far, I have talked about the cost side of the ledger. S. 1789, the substitute, also gives the Postal Service tools to bring in fresh revenues by offering new products and services, specifically authorizing contracting with State and local governments to issue State licenses, authorizing for the first time the Postal Service to do what some of the private shippers do--shipping beer, wine, and distilled spirits, and provide notary services or provide specialized Internet services.
Our bill would also create an advisory commission of prominent citizens and charge them, within a set period of time, to reconsider the Postal Service's current business model and provide it with a strategic blueprint for the future that will enable it to both continue to exist and provide the services people want, but to do so in a way that balances its budget.
Finally, it creates a chief innovation officer at the Postal Service whose job is to continue to find ways to innovate and build on not only the constitutional responsibility to maintain the Postal Service and post offices but to do so in a way that is innovative and builds on the irreplaceable assets the Postal Service has, particularly the capacity to deliver to the last mile anywhere in this country.
These reforms are necessary. They will make the post office smaller and more cost efficient. As a result of this bill, there will be fewer employees at the post office and fewer facilities. You have no choice but to bring that about.
But this bill will keep the Postal Service alive. I think it will keep it well and it will put it on a path to surviving forever but in a different way, because the environment in which it is operating, because of the Internet, simply has changed. Despite its shrinking stream of posts and parcels, here is the reality we are dealing with and what would be affected if the Postal Service is to begin cutting back its operation.
The Postal Service still delivers 563 million pieces of mail every day. Only the Postal Service, for the price of a
stamp, will go literally that last mile to ensure delivery to every business and residence in America, using burros in the Grand Canyon and snowshoes in Alaska, doing whatever is necessary to make that happen.
What Federal agency, if I can go to another service the Postal Service gives, could process--think of the unthinkable--6.7 million passport applications a year if the Postal Service weren't there.
These are some examples and suggestions of the fact of what is possible but also proving that the Postal Service is not just a relic of the 18th century; it is a pivotal part of the 21st century.
The computer age poses unique challenges to the Postal Service, and the day may come when we will send and receive mail, get most of our magazines and books, and pay our bills on electronic devices that are reliable and secure. But honestly the day will never come when we can send physical things across the Internet between homes and businesses-- such as medicine, clothing, household and business supplies, and even spare parts for those computers we use so much.
The Postal Service is unique, and its network of support facilities and dedicated employees stands ready to deliver to every home, store, business, and factory in America. That is why we have to act to make sure it continues to be able to do that.
Let me go back to the first Postmaster General, Benjamin Franklin, who always had a lot of good things to say that even seem relevant centuries after. Franklin said, ``By failing to prepare, you are preparing to fail.'' This bill offers preparations to succeed, to make sure the Postal Service never fails.
I thank the Chair and I yield the floor.