Senator John McCain (R-AZ) has introduced legislation to restore the financial health of the Postal Service. Dubbed the “Postal Reform Act of 2011”, the bill would make a number of changes to the Postal Service to bring it out of its dire financial condition and is being introduced as companion legislation to Rep. Darrell Issa’s (R-CA) bill introduced in the House in June.
The Postal Service is expected to end this fiscal year with a $10 billion loss, and by its own estimates faces a shortfall of up to $238 billion by 2020. At the end of this month, the Postal Service will not be able to make a required $5.5 billion payment to fund future retirees’ health benefits.
Some of the changes the bill would make include:
- Creating a Postal Service Financial Responsibility and Management Assistance Authority, which is modeled after the District of Columbia control board Congress created to address the fiscal crises the city was facing in the mid-1990s. This Authority, triggered by a Postal Service default on its federal obligations, would replace the Postal Board of Governors with mandates to cut costs, and put the Postal Service back on a path to financial solvency.
- Creating a Commission on Postal Reorganization that would use a BRAC-like process to consolidate and close post offices and mail processing facilities; the current network of offices has a capacity of 250 billion pieces of mail whereas mail volume is currently at around 160 billion pieces.
- Requiring arbitrators to take into account the financial health of the Postal Service if labor contracts move to arbitration. It would also exempt the Postal Service from the Davis-Bacon Act, the Service Contract Act, and other wage rules that increase contracting costs.
- Requiring that the vendors responsible for certain types of money losing mail be responsible for covering their costs
- Mandating that Postal Service employees pay the same health and life insurance premium percentage as other federal workers
- Moving to a 5-day delivery
Speaking about the legislation, McCain said, “We can no longer support temporary fixes to the Postal Service. If we continue to act in this irresponsible way, the American taxpayer will be the one that ultimately suffers in the form of higher postage prices and taxpayer bailouts. We must make hard choices now so future generations of Americans will have a viable Postal Service.”