Sen. Carper Statement on Postal Regulatory Commission’s Decision to Deny Latest Postal Rate Increase

Senator Carper

September 30, 2010

WASHINGTON – Today, Sen. Tom Carper (D-Del.), Chairman of the Senate subcommittee with jurisdiction over the U.S. Postal Service, released the following statement in response to the Postal Regulatory Commission’s (PRC) decision to reject the latest postal rate hike:

 “I’d like to thank the members of the Postal Regulatory Commission and their staff for their work. I know this was a hard-fought and complicated case so I appreciate the thought and the long hours that went into producing this important decision.

“The Postal Service is clearly in a financial crisis. It lost $4 billion last year and will likely lose as much as $7 billion this year once it closes its books for the fiscal year later today. Postmaster General Potter announced this past spring that, if nothing were done, the Postal Service could accumulate as much as $230 billion or more in losses by 2020. This is clearly an unsustainable path. In fact – if these trends continue and no major changes occur – I understand that the Postal Service will actually run out of cash by the end of fiscal year 2011, just a year from today.

“The rate increase that was denied today would not have fixed the Postal Service’s problems. A number of observers argued that it could actually have made them worse. Regardless, I hope that today’s events will focus the Postal Service, its employees, its customers, and my colleagues in Congress on the need to take dramatic action to arrest the slide the Postal Service is on. Even when our economy has fully recovered from this recession, the Postal Service will still need to deal with the fact that more and more people are turning to electronic communication to keep in touch with friends and family and to conduct their daily business. Postal management has done a tremendous job in recent years cutting costs, becoming more efficient, and reducing its workforce. But despite these efforts, more needs to be done to reduce costs and increase revenue, especially during the labor negotiations currently underway. Perhaps more importantly, Congress needs to clear the way for further progress by passing legislation to free the Postal Service to execute its reform plans.

“If we do nothing, we face a future without the valuable services the Postal Service provides. However, if we act quickly, we can turn things around by passing my recently introduced bill, the Postal Operations Sustainment and Transformation (POST) Act of 2010. This necessary legislation would give the Postal Service the room it needs to manage itself and avoid becoming the latest victim of Congressional gridlock. More specifically, my bill addresses the current budget issues plaguing the Postal Service by proposing a series of provisions including: easing postal employee pension and retiree health costs; addressing postal employee wages and benefits; allowing partnerships with state and local governments; and giving the Postal Service leeway to close post offices, market certain non-postal items, and eliminate Saturday delivery.

“The Postal Service has put forth a plan that shows a commitment to further cost cutting and efforts to make their business relevant during these changing times. Achieving these goals will require a shared sacrifice on the parts of the Postal Service, postal employees, and major postal customers.”

Background: The proposal was a 5.6 percent increase that would have gone into effect in January. The price of a first-class stamp would have increased by two cents from 44 to 46. The Postal Service was anticipating that it would generate $2.3 billion in revenue. It was filed under a process laid out in the 2006 Postal Accountability and Enhancement Act allowing the Postal Service to increase prices above the CPI rate cap during “extraordinary or exceptional” circumstances. The PRC is denying the request.

A summary of the bill follows:

The POST Act (S. 3831)

There are seven provisions in the bill. All of them are based on the legislative proposals the Postal Service made this past spring.

1. Financial Relief – The heart of the bill attempts to permanently address the pension and retiree health issues that have been a drain on postal finances over the years. The Postal Service currently pays into the old Civil Service Retirement System using a formula that the Postal Service Inspector General, the Postal Regulatory Commission, and at least two outside consulting firms have found unfairly allocates costs related to the former Post Office Department to the Postal Service. If true, this has resulted in the Postal Service overpaying its CSRS obligations over the few decades by between $50 billion and $75 billion. In addition, the Postal Service since FY2007 has been required to pay between $5.5 billion and $5.9 billion a year in an effort to prefund its future retiree health obligations. The bill would give the Postal Service more than $5 billion in breathing room each year by making two changes to current law:

– First, it requires OPM to recalculate the Postal Service’s CSRS obligation in a way that makes the Treasury responsible for pension costs related to pay increases Post Office Department employees working for the Postal Service would have gotten had they stayed on the federal payroll. This was the approach recommended by the IG, the PRC, and the consultants who looked at this issue. The recalculation will result in a finding that the Postal Service has paid about $50 billion more into CSRS that it owed.

– Second, it allows the Postal Service to use its $50 billion in overpayments to make the remaining seven retiree health prefunding payments it owes between now and 2016.

2. Saturday Delivery – The bill would remove the Appropriations rider that currently prevents the Postal Service from moving forward with its proposal to eliminate Saturday delivery. Under the 2006 postal reform legislation, the Postal Service was given the authority to reduce delivery frequency when it felt like it was necessary after taking the proposal to the PRC and receiving an advisory opinion. The Appropriators, however, put language in their bill every year negating this authority. Eliminating that rider would allow the Postal Service to achieve the $3 billion or more a year in savings that the Postal Service believes it could achieve if they eliminated Saturday delivery.

3. Post Office Closings – The bill would eliminate several provisions in law that the Postal Service believes forces it to maintain post offices that are no longer necessary. If the Postal Service is able to close some of these facilities, postal management believes they could began the process of rolling out cheaper, more convenient retail options such as automated kiosks or postal stations located in grocery stores or other places where people go every day.

4. Arbitration – Under current law, the Postal Service is required to pay its employees wages and benefits that are comparable to those paid in the private sector. Arbitrators in labor disputes have made it clear in the past that they think this is a legally binding requirement that should be taken into consideration when they render a decision. At times, arbitrators have awarded postal employees what they believe are comparable pay and benefits without taking the Postal Service’s financial condition into account. Recognizing that this situation cannot continue in a world where the Postal Service operates under a rate cap and faces stiffer competition from electronic communication, Senator Coburn proposed language in the past that would require arbitrators to take the Postal Service’s financial condition into account. The contains a similar provision requiring arbitrators to take the Postal Service’s financial condition into account along with other factors such as the comparability requirement and the details of the rate system.

5. Non-Postal Products – Under current law, the Postal Service is prohibited with a few exceptions from offering “non-postal” products and services, meaning products or services not related to the mail. The bill would revise this prohibition so that the Postal Service can begin offering non-postal products that are in the public interest and make use of the existing postal network.

6. State and Local Governments – Under current law, the Postal Service may partner with federal agencies to offer government services in postal facilities. The bill would allow them to enter into similar partnerships with state and local governments.

7. Wine and Beer – Under current law, the Postal Service is prohibited from mailing alcoholic beverages. UPS and FedEx can, however. The bill includes language putting the Postal Service on equal footing with UPS and FedEx with respect to shipping beer and wine.

3 Responses to "Sen. Carper Statement on Postal Regulatory Commission’s Decision to Deny Latest Postal Rate Increase"

  1. The obviously manufactured “postal regulations” quoted above are nonsense. –And I suspect the person posting those “regulations” is in need of help which the United States Postal Service, it’s Agents, Licensees, Vendors and Employees are unable to provide. Here’s a regulation which is easily verified in any of the states and US territories in which the United States Postal Service transports and delivers mail: IT IS A VIOLATION OF FEDERAL LAW TO PHOTOGRAPH ANY FEDERAL EMPLOYEE IN THE PERFORMANCE OF THEIR DUTIES OR OTHERWISE, with the exception of law enforcement or USPS investigatory agents such as the Office of Inspector General.

    Good luck with your illness. When you recover, perhaps you will hav the opportunity to walk in the shoes of that Letter Carrier or some other yemployees at USPS. When you are afforded that opportunity, you may actually know what you’re talking about. Until then, get some help. Your story should emanate from a counseling couch, not the PEN website. Good luck to you.

  2. Instead of rate increases to gain more revenue, US Postal Service can retain millions of dollars CURRENTLY SQUANDERED by lost worker time CUSTOMER DISSATISFACTION, AND RUINED PUBLIC GOODWILL when mail carriers take cigarette breaks and other time off at apartment complexes, where they use their influence to obtain keys to gated and locked private facilities, such as recreation rooms and swimming pools.
    Here is a complaint recently submitted to USPS online:
    “On June 11, 2010 hold mail was requested by me to end June 16, 2010,and I arranged to be at home all day on June 16, 2010 to receive the volume of mail expected to exceed the capacity of my mailbox. The day before, when I returned home from travel, staff in the apartment complex office knew I had been gone because the mail carrier had told them of the hold mail.
    On June 16, 2010 at about 1:45 p.m. as I left my apartment I saw the regular mail carrier for my address driving away from the mail box cluster where my mailbox is located but when I opened it there was no mail at all. The mail carrier was at the next cluster and when I walked to that one and asked him where my hold mail was he reached to his left without needing to look, picked up a folded 8 ½ X 11 printed sheet, removed 4 pieces of mail from the fold, and handed it to me. He kept the sheet of paper and didn’t mention my hold mail but when I did he said “You got a lot of mail!”
    His tone of voice, facial expression, and body language conveyed annoyance and resentment.
    I replied that I stayed home to receive all that mail and asked him why he didn’t bring it but he refused to answer.
    About 15 minutes later I was at the recreation center of the apartment complex when I saw the same mail carrier with a large quantity of mail under his arm open the locked swimming pool gate with a key attached to a chain with all of his other keys, then unlock the recreation room door with that key and enter. There was no one in the room and it is not the address for any postal customer. He emerged several minutes later and left the way he came in, again with his own key unlocking the pool gate to exit. The key is not needed to access any mailbox on the property or to access the path to any mailbox, including the apartment manager office.
    This complaint, for which there photographic evidence of the mail carrier at the recreation center with a large quantity of mail, seeks an end to willful misconduct by this USPS employee who:
    Violated postal rules by knowingly and deliberately failing to deliver hold mail after the hold ended. He knew all about the volume of mail which had accumulated and there were no events or conditions preventing delivery of the mail.
    Violated postal rules by knowingly and deliberately confiscating mail in his possession in the USPS vehicle instead of delivering it to my mailbox, handing it over to me in person only after I asked for it. Again, there were no events or conditions preventing delivery of the mail.
    Violated postal rules by carrying mail into a building which is not the home or business address of a postal customer.
    Violated postal rules by telling an unauthorized third party when my mail was on hold, a violation of the federal Privacy Act.”
    The week after the events described above, in which the mail carrier saw me photographing him engaged in misconduct, the same mail carrier entered the gated and locked areas again and used his camera to photograph me seated next to the pool, accompanied by his verbal taunts.
    Clearly, one reason FedEx and United Parcel Service are beating USPS is that they don’t coddle employees who engage in such pathological frolics.
    The water meter reader doesn’t roam about the gated and locked swimming pool and recreation room. Neither do United Parcel Service or FedEx drivers. Millions of workers all over the planet do their jobs every day without disturbing their customers at their homes in order to perform their bodily functions.
    The legal and peaceful actions I have taken in response to these problems have resulted in an ominous but lame letter from US Postal Inspector Alan A. Anderson alluding to “intimidation” of a letter carrier.

    THE POSTAL REGULATORY COMMISSION MUST IMMEDIATELY DRAFT, APPROVE AND ENFORCE RULES AND REGULATIONS FOR THE US POSTAL SERVICE TO PROHIBIT MAIL CARRIERS FROM OBTAINING KEYS TO ACCESS ANY PRIVATE PROPERTY ALONG THEIR ROUTE WHICH IS NOT THE LOCATION OF A MAILBOX, OR THE PATH NECESSARY TO TAKE TO REACH A MAILBOX; PROHIBIT MAIL CARRIERS FROM TAKING MAIL INTO ANY BUILDING WHICH IS NOT THE LOCATION OF A MAILBOX; AND REQUIRE MAIL CARRIERS TO MAKE ARRANGEMENTS ON THEIR OWN USING THEIR OWN MEANS TO TAKE THEIR BREAKS AND LUNCH AT LOCATIONS WHICH ARE USUAL AND CUSTOMARY FOR WORKERS OF ANY OTHER COMPANY OR AGENCY TO USE FOR THAT PURPOSE, INSTEAD OF DISTURBING THE PEACE AND PRIVACY OF RESIDENTS AT LOCKED AND GATED AREAS OF MULTIFAMILY HOUSING.

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