NATIONAL

ASSOCIATION OF POSTAL SUPERVISORS

NAPS Assessment of HR 2309, Postal Reform Act of 2011 Introduced by Rep. Darrell Issa (R-CA) and Rep. Dennis Ross (R-FL)
SUMMARY: We oppose HR 2309. We believe the bill will destroy the Postal Services most important assets: six-day delivery, Universal Service, a provider of good-paying middle class jobs, employment for returning veterans, and a government presence in every community in the country. HR 2309 creates unnecessary and additional costs, adds bureaucracy and undermines the security and integrity of the mail system. By providing the pathway for privatization of the profitable parts of the current postal system, the measure will make service to rural areas far more costly, thereby causing service reductions and adding greater costs to assure continued service to rural areas, whether by USPS or private means. In our role representing over 30,000 current and retired postal supervisors, managers and postmasters, we understand the problems that the Postal Service faces, as well as the need for improvement in the internal operations of the Postal Service. Our members manage and direct the processing and delivery of over 170 billion pieces of mail per year. Improvement to the Postal Services finances requires the realignment of its payments and revenues. We believe there are better alternatives to achieve this than HR 2309. HR 2309 will kill the Postal Service by imposing a prescription that is bad medicine, in effect worsening the current illness of the Postal Service. We believe the Postal Service legislatively needs: A temporary suspension of its retiree health pre-funding obligation and the realignment of its retiree health funding payment schedule under more reasonable terms; A recalculation of its pension payments into the Treasury over the past 40 years, with repayment to the Postal Service made over a reasonable period of time to reduce deficit-scoring consequences as much as possible;

Expanded commercial freedom to gain new revenue through development of new products and services in the communications and service sectors. This would be accomplished through public-private and inter-governmental partnerships.

Pursuit of these three strategic changes will provide short-term and long-term stability for the Postal Service and not require the extreme measures proposed by HR 2309. Here are our thoughts on the major provisions of HR 2309: Commission on Postal Reorganization The bill establishes a commission similar to a military BRAC to eliminate excess capacity and facilities, with prompt up-or-down approval of its recommendations by the Congress. NAPS Position: This new commission is unnecessary and costly. It displaces the constitutional authority of Congress to establish (and dis-establish) post offices and facilities. Although Congress may delegate that responsibility, doing that here is unnecessary. The Postal Service already has sufficient authority to close post offices and facilities to eliminate excess capacity. Elimination of at Least One of Six Delivery Days Authorizes the USPS to establish Five-Day delivery of mail, eliminating Saturday delivery. NAPS Position: The elimination of Saturday delivery will reduce service to the American public and ultimately trigger the continued reduction of other postal services. Without Saturday delivery, competitors are likely to seek the relaxation of the Private Express Statute that gives the Postal Service exclusive access to customers mailboxes, especially in more profitable urban areas. The costs of universal service to the Postal Service, costs that private competitors do not face, will continue to create an uneven playing field that works to the detriment and long-term future of the Postal Service.
2

Solvency Authority to Oversee Operations in the Event of Default The bill creates a second oversight commission to provide direction to the Postal Service and to make decisions after the Postal Service has triggered a default of any obligation. NAPS Position The establishment of this governmental authority would be redundant and costly. The current Board of Governors of the Postal Service, along with the Postmaster General, has the authority to cut costs, effectively manage the Postal Service workforce, and operate the nations mail system in an efficient manner. There is no need for a solvency authority that would wield even greater power, including the power to terminate collective bargaining agreements, along with wage and benefit-setting. Elimination of Current Subsidies for Certain Mail Types The bill would require all market dominant products to cover their costs, while maintaining the CPI price cap. For classes below the 90% price coverage, the bill would increase prices 5% annually above the price cap and reduce the non-profit discount by 30% over six years to the most closely corresponding commercial rate. It also would end rate preferences for national and state political committees. NAPS Position These provisions would hurt many mailers upon whom the postal system relies, likely eroding mail volume and reducing overall revenue for the Postal Service. Commercial advertising and outreach by those mailers will gravitate even faster to non-mail channels, including the internet. This will cause further job contraction in postal-related jobs and increase unemployment. USPS Authority to Provide State Government Services The bill authorizes USPS to provide services for state governments in ways that enhance the Postal Services value. The bill requires that all services maintain 150% cost coverage and may not interfere or detract from the value of postal services.
3

NAPS Position NAPS supports the expansion of USPS service-delivery to governments at the state and local levels, leveraging USPS access and visibility in every community. However, the bills requirement that all services maintain 150% cost coverage is prohibitive and will stall the entry of the Postal Service in profitable areas, especially in the early years of business development. Policies for Contracting Out Current Postal Work The bill creates USPS and PRC Competition Advocates to promote the contracting-out of postal work to the private sector. NAPS Position Universal Service provides a consistent price for mail services to every household and business in America, regardless of their address. Contracting-out the processing and delivery of mail to the private sector will jeopardize universal service, especially in rural areas. Furthermore, the safety and integrity of current mail services rests on the unified supervision and deployment of services by the Postal Service, not through private contractors. The Postal Service as an Employer Providing Middle-Class Jobs The bill significantly undermines the mission of the Postal Service to provide universal service at fair, uniform prices to all American households and businesses. In addition, it will destroy the capacity of the Postal Service as a job-creator and builder of the Middle Class. In the past fifty years, the Postal Service, as an employer, has brought more families into the middle class than any other business in America. The Postal Service is one of the largest employers of veterans and disabled veterans in the country. NAPS Conclusions on HR 2309: The passage of the bill will destroy the Postal Services most important assets: six-day delivery, Universal Service, a provider of good-paying middle class jobs, employment
4

for returning veterans, and a government presence in every community in the country. HR 2309 creates unnecessary and additional costs, adds bureaucracy and undermines the security and integrity of the mail system. By privatizing profitable parts of the current postal system, it will make service to rural areas far more costly, thereby causing service reductions and adding greater costs to assure continued service to rural areas, whether by USPS or private means. For questions or additional information contact: Jay Killackey Executive Vice President National Association of Postal Supervisors naps.jk@naps.org 703-836-9660 Bruce Moyer NAPS Legislative Counsel brumoyer@verizon.net 301-452-1111

January 10, 2012