Senate panel presses ahead with postal reform bill

A bipartisan bill to overhaul the U.S. Postal Service was met with pockets of skepticism on Wednesday, with a pair of Republican senators doubtful that the legislation was enough of a long-term fix for the struggling agency.

Sens. John McCain (R-Ariz.) and Tom Coburn (R-Okla.) said Wednesday that the bipartisan legislation did not make the fundamental changes USPS needed — much like, they said, a 2006 bipartisan postal reform measure.

“The predictions at the time — and I’ll be glad to get you the Congressional Record — were that we would never have to address this issue again,” McCain said. “Well, here we are.”

Still, the Senate Homeland Security and Governmental Affairs Committee approved the reform legislation, which comes from top lawmakers on the panel from both parties, by a 9-1 vote. (According to a committee aide, the overall tally, which did not break down on party lines, was 11-6 when counting proxy votes.)

The bill — from Sens. Joe Lieberman (I-Conn.), Susan Collins (R-Maine), Tom Carper (D-Del.) and Scott Brown (R-Mass.) — would, among other things, change how the Postal Service prefunds healthcare benefits for retirees and block the agency from scrapping Saturday delivery for at least two years.

McCain and Coburn pressed especially hard — and unsuccessfully — to allow USPS to start moving toward five-day delivery immediately. The lawmakers on the Homeland Security panel also went back and forth over workers’ compensation benefits for postal employees and the Postal Service’s desire to close thousands of local offices.

But even though the panel was moving forward with the bill, the pushback from Coburn and McCain underscores that policymakers still need to bridge broad disagreements over how to best put USPS on firmer financial footing.

For instance, the House GOP reform plan, from Reps. Darrell Issa (R-Calif.) and Dennis Ross (R-Fla.), differs from its Senate counterpart over how to deal with the Postal Service’s labor costs and how many days USPS should deliver the mail.

McCain has introduced a version of the Issa bill in the Senate, which has so far attracted only Coburn as a co-sponsor.

The Senate mark-up comes as virtually everyone agrees that the Postal Service faces stark financial challenges, after losing as much as $10 billion in fiscal 2011 and with possible annual losses of $20 billion or so by 2020.

The agency has also yet to pay a significant part of their 2011 deficit, a $5.5 billion obligation to prefund retiree healthcare costs. And it has seen mail volume fall by more than 20 percent since 2006, which officials chalk up to improvements in digital communication and the recession.

On Wednesday, McCain and Coburn charged that the Senate bill would not give postal officials the freedom they need to make difficult choices — such as eliminating Saturday delivery, a change the two senators said would save USPS some $3 billion a year.

“You’ve got to let them do what they know they need to do. And what they have to do is they have to go to five-day delivery quickly,” said Coburn, noting that the Obama administration and the postmaster general were both on board with that idea.

But Collins — who, like other lawmakers from more rural states, has long been skeptical of moving away from six-day delivery — said she doubted the move would save that much. Postal unions are also fiercely opposed to getting rid of Saturday delivery.

Collins, the ranking member of the full Homeland Security panel, said that the Postal Regulatory Commission had found that canceling Saturday delivery would have a “disproportionate impact on rural Americans who do not have access to broadband services.”

In the end, the panel rejected the proposal, 12 to 5.

For his part, Lieberman, the committee’s chairman, said he fully expected USPS to make the switch to five-day delivery after two years.

Under the Senate proposal, the Postal Service could only eliminate Saturday mail after two years if it located and helped customers disproportionately hurt by the move and took advantage of all the cost-saving measures included in the legislation.

“To me, this is easing into something,” Lieberman said.

The House proposal, as currently amended, would not let USPS completely get rid of Saturday delivery, at least at first. It would let USPS choose an extra 12 days a year on which it wouldn’t have to deliver, and allow the agency to ask to move to five-day delivery six months after the reform bill is enacted.

The Homeland Security panel also turned away a proposal to strip the postal legislation of reforms to workers’ compensation standards, a particular interest of Collins.

The bill would, among other things, change the compensation benchmarks for current retirees that are permanently disabled. Collins noted earlier this year that around 1,000 postal staffers that were 80 years old or older were still receiving compensation benefits. 

Groups like the National Active and Retired Federal Employees Association and the National Treasury Employees Union have opposed the postal measure's workers compensation provisions.

The panel also accepted an amendment from Sen. Jerry Moran (R-Kan.) that would bar USPS from closing local offices until new minimum standards for postal service are finalized, and another from Sen. Daniel Akaka (D-Hawaii) that stripped a provision that would have forced the Postal Service to funnel Medicare-eligible retirees into the entitlement program. 

Patrick Donahoe, the postmaster general, said in September that incentivizing Medicare for employees could save the agency roughly $550 million a year.

The Senate bill would allow the Postal Service to dip into an almost $7 billion surplus in a federal retirement fund to help transition 100,000 or more employees into retirement.

It would also spread the retiree healthcare prepayment, now scheduled to last 10 years, over four decades and allow the payments to be reduced if USPS and postal unions reach a pact to lower healthcare costs.

By contrast, Issa and other Republicans say the billions of dollars the Senate would give USPS access to is only a projected surplus. The House GOP bill would also give a new oversight board authority to recommend post office closures and other cost reductions.

The 2006 postal reform bill changed USPS’s rate-setting process and expanded the reach of the Postal Regulatory Commission, among other things.

This post was updated at 6:28 p.m.

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