Senator Carper Introduces Bill to Stabilize, Modernize U.S. Postal Service

WASHINGTON – Today, Senator Tom Carper (D-Del.), ranking member of the Homeland Security and Governmental Affairs Committee, introduced the Improving Postal Operations, Service, and Transparency Act of 2015 (iPOST).

The financial condition of the Postal Service has been deteriorating for years, but the 2008 economic downturn and the continuing transition to digital communications and commerce have hastened its downward spiral. The Postal Service currently owes $15 billion and faces tens of billions of dollars more in unfunded pension and health care obligations in the years to come. It ended fiscal year 2014 with a net loss of $5.5 billion, bringing its cumulative deficit since fiscal year 2007 to $51.7 billion, according to the Postal Regulatory Commission. For an institution that operates at the center of a $1 trillion industry that employs more than 7 million people, a financial outlook this bleak is alarming — and shouldn’t be ignored.

The Improving Postal Operations, Service and Transparency Act of 2015 (iPOST) includes a comprehensive package of reforms that would place the Postal Service on firm financial footing, stabilize and improve service performance, allow for the  development of new products and services, and enhance transparency. 

“More than 200 years after its founding, the Postal Service remains an important part of our lives and economy,” said Sen. Carper. “But it continues to struggle with financial challenges that threaten its future. For years, the Postal Service has worked hard to compete in the digital age – keeping prices as low as possible, reducing costs, and innovating where it can. Despite these efforts, the Postal Service’s longstanding financial and legislative burdens coupled with the ongoing decline in the volume of First Class mail make this American institution’s current business model unsustainable and its future uncertain.

“My legislation offers a comprehensive solution to the problems facing the Postal Service.  It would put the agency on solid financial footing, improve service, and allow it to better adapt to a digital age. This legislation reflects the views of a broad range of stakeholders and I believe it can help pave the way to a thoughtful compromise on a set of difficult issues that Congress and the Postal Service have struggled with for years, giving the Postal Service, its employees, and its customers some badly-needed stability and certainty.  I will continue to work with the Postal Service, my colleagues on both sides of the aisle, including Chairman Ron Johnson, stakeholders from rural, urban, and suburban communities, businesses of all sizes, postal customers, and postal employees to make it better.

“Put simply, our economy still depends on a healthy and robust Postal Service.  It’s our duty in Congress to pave a fiscally sustainable path that will enable this American institution to thrive. But it is going to take collaboration, communication, and compromise for us to be successful.”

Congressional leaders have long called for legislation that addresses the systemic causes of the Postal Service’s difficulties, and this compromise builds on years of bipartisan, bicameral work. Without serious, long-term reform, this iconic American institution – enshrined in our Constitution – will take on more and more debt.

Since the beginning of the 114^th Congress, Senator Carper has held numerous briefings, roundtables, and meetings with members on both sides of the aisle and postal stakeholders to assess the hurdles facing the Postal Service, identify the tools the Postal Service needs to innovate and thrive in the 21st century, and find a way forward on postal reform.

April 17, 2015: Senator Carper Convenes Bipartisan Briefing on Postal Service Finances

May 12, 2015: Senator Carper Hosts Second Bipartisan Briefing on U.S. Postal Service Challenges and Opportunities in the Digital Age

May 19, 2015: HSGAC Senators Host Roundtable on Rural Postal Issues

Specifically, iPOST:

Increases Sustainability

• iPOST eliminates the existing statutory payment schedule, cancels any outstanding payments, reduces the pre-funding goal to 80 percent of projected obligations, and amortizes payments over 40 years.  iPOST also allows the Postal Service the option to invest its amortization payments for up to 10 years in a more lucrative TSP-like account rather than low interest treasury bonds.  At the end of 10 years, the investment income would first be used to pay any remaining retiree health liability, then debt.  If those costs are resolved then the funding can be used for other postal costs such as investment in infrastructure. 

• iPOST would create a new Postal Service Health Benefits Program (PSHBP) within FEHBP, implemented and administered by OPM, for all postal employees and annuitants and require all Medicare-eligible postal annuitants and employees enrolled in the PSHBP to also enroll in Medicare, including parts A, B and D. This is essential for protecting the American taxpayer from a future bailout and for protecting the employees’ benefits in retirement. 

Improves and Stabilizes Postal Service and Operations

• The price of postage is currently scheduled to decrease this coming spring pursuant to orders put forward by the Postal Regulatory Commission and the federal courts.  iPOST makes the current temporary rate increase put into place in 2014 permanent while freezing any further rate increases until a new rate system can be established by the Postal Regulatory Commission by January 1, 2018. The bill also proposes a pause in the Postal Service’s facility closing and consolidation efforts for two years for mail processing plants and five years for post offices.  This pause would ensure a stabilization of service for postal customers who have expressed concerns about an erosion of service quality in recent years.  iPOST also implements stronger performance enhancement provisions to make sure that all American’s are receiving accurate and expeditious postal services. 

Innovates and Modernizes Existing Postal Business Model and Increases Transparency

• The bill also allows the Postal Service to introduce new non-postal products and services, ship beer, wine and distilled spirits, and partner with state and local governments in offering government services.

• iPOST increases transparency of Postal Service delivery results and would require that all delivery and retail performance results are posted in a transparent and user-friendly way.

For more information, including a section-by-section summary of the bill and bill text, please visit: www.carper.senate.gov/postalreform