Going Postal – An Overhaul for USPS

During this holiday season, we relied on the Postal Service for mailing and receiving packages and holiday cards to friends and loved ones, yet many of us take for granted what a pillar this institution is to the American economy.

The U.S. Postal Service is the lynchpin of a $900 billion mailing industry, providing nine million jobs nationwide.  These jobs are in diverse fields ranging from direct mailing, printing, and catalog companies such as L.L. Bean – in my home state of Maine – to paper manufacturing, and financial services.

In addition to the huge number of jobs that depend on a financially strong Postal Service, individuals and families living in rural communities throughout the nation rely on its universal service.  Families living in our small, rural communities should have the same access to the postal services as those living in our cities. If the Postal Service were no longer able to provide service to every customer, the affordable communications link upon which many Americans rely would be jeopardized. And most commercial businesses would find it uneconomical, if not impossible, to deliver mail and packages at affordable rates to every address.

But under its current business model, which has not been updated in three decades, the financial future of the Postal Service was not viable. There are many reasons why modernizing the Postal Service is so critical to the health of this institution.  The Government Accountability Office has described the current financial situation of the Postal Service as a “death spiral.

Excessive and unpredictable rate increases lead to further reductions in mail volume, which, in turn, lead to even high rates.  We are also living in an electronic age where people are communicating more and more via email, cell phones, and means other than traditional mail, creating an additional challenge for the Postal Service. In addition, the Postal Service has been saddled with more than $90 billion in unfunded liabilities and obligations, further threatening its financial future.

I am very pleased that the President has signed into law legislation addressing these critical issues.  The result of three years of hard work, this new law modernizes the Postal Service, puts it back on track to a more stable financial footing, and ensures the continuation of universal service.

My work on postal reform legislation began back in 2002 when a group of Mainers met with me and taught me the importance of the Postal Service to the viability of their businesses and to the individuals they employed. The coalition of groups included a Maine catalog company, a paper manufacturer, a printer, a local financial services company, and a publisher.

Shortly after this meeting, I introduced a bill to establish a Presidential Commission, tasked with examining the problems facing the Postal Service and with developing specific recommendations to strengthen the institution.

As a result of my initial bill, the President appointed members to this commission, which worked very hard in crafting an excellent report, which provided, in many ways, the basis for my landmark postal reform legislation that is now law. In the years to follow, the Homeland Security and Governmental Affairs Committee, which I chair, held a series of eight hearings, during which we closely reviewed the recommendations of the President’s commission. We heard from a wide range of experts and stakeholders including representatives of postal employees, the Postal Service itself, Administration officials, commercial mailers, and non-profit organizations.  In the end, we were successful in writing legislation that enjoyed a broad coalition of support.

This postal reform bill is another example of what can be accomplished through hard work and bipartisan efforts.

Our new law will ensure the continuation of universal postal service at affordable rates; it replaces the current lengthy and litigious rate-setting process with a rate cap-based structure for products such as First-Class Mail, periodicals, and library mail, thus ensuring more rate stability and predictability; and it provides the Postal Service Board of Governors with greater authority and flexibility in setting rates, enabling the Postal Service to compete in the modern marketplace; and it relieves the Postal Service of some financial obligations that would have put its financial future in peril.

I recently participated in the White House signing ceremony of this landmark legislation. As I stood behind the President and side-by-side with a bipartisan group of my colleagues who also worked tirelessly with me on postal reform, I thought that it was somewhat symbolic that the bill was signed into law during the holiday season and on what many believe was the busiest day of the year for the postal service – a clear reminder of how important this 225-year-old institution is to our nation and its economy.

This new law will help the Postal Service meet the challenges of the 21st Century.