NOTES FROM THE SENATE COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
MARKUP OF S. 1789

The following is an extemporaneous summary (non-verbatim) of comments offered at the markup.

Lieberman:

• The Postal Service is going into a death spiral, unless we do something about it. The world has changed. It has affected mail volume and revenue. The status quo is not going to work.
• The proposal we are putting forward will provide some of the changes that are necessary to keep the Postal Service on a solid footing.
• We have rejected the idea that we should put in place an exigent increase of postal prices. It will only worsen the Postal Service's position. This bill should allow the USPS to save billions of dollars.
• There are parts of our proposal are controversial. Some think it's too tough; some not tough enough.

• We've spent countless hours working on this bi-partisan bill.
• This gives the USPS the authority it needs to restructure, modernize, and survive.
• The USPS will not survive without fundamental reforms. If nothing changes, the USPS will end the year with a $10 billion deficit. It won't be able to make payroll.
• Real jobs are at stake, not only for the USPS but for many companies whose businesses are tied to the postal system. We're telling the Postal Service make real changes; not just to raise prices and cut services.
• None of us is happy with every provision in this bill. It's a compromise, but it tackles the very tough issues in a responsible way. 80% of postal costs are employee-related.
• There are too many employees for the work that needs to be done. This bill would create incentives for retirement-eligible employees to retire.
• The bill would refund the $7 billion overpayment to FERS. Provisions regarding CSRS have been dropped.
• There are now 2000 employees aged 70 and over still receiving workers compensation. The bill delays for two years the Postal Service's ability to reduce mail delivery to less than six days.

• We need to provide businesses with some sense of predictability.
• Just as the auto industry has had to right-size. The same has to happen with the Postal Service.
• We want to incentivize people to retire, not lay people off or abrogate labor agreements.
• We're making it possible for the USPS to move to curbside delivery.
• We're looking to keep, if possible, Saturday delivery.
• The Postal Service has got to find ways to grow its business. When they do such things, we can't get in the way.
• We can't just kick the can down the road. We need to give the USPS the tools it needs to survive.

Amendment: On the transparency of contracts between the USPS and contractors. I was told I can't look at the contracts the USPS has with UPS and Fedex. The only person who can see the contracts is the House subcommittee chairman with postal oversight responsibility. This is offensive to the Senate. This amendment very simply that UPS cannot enter into a contract with the USPS without Senate oversight.

• We were here five years ago. We thought the USPS would be fixed. We're making the same mistake again by not allowing the Postal Service to run as a business. We're going to be back again, because this bill won't fix it. You have got to let the USPS do what it needs to do, such as go to five-day delivery. We're putting the USPS on a path to a slow death.
• To not allow the Postal Service to close the facilities they think they need to close ensures the USPS will not succeed.
• If we want them to compete, then give them to tools they need.

• The major challenge the USPS' faces is the transformation that has occurred in new communication technology. The Postal Service has to adjust to this transformation. To somehow place into law prohibitions to make the necessary changes inhibits the USPS ability to keep up with the 21st century. Mail volume is declining because of the shift to e-commerce.
• I go to many town hall meetings, and I can't ever recall being at the top of the list is the retention of six-day delivery.

• We don't need a BRAC-like process to close or consolidate facilities. We need to come up with roughly $20 billion in savings for the USPS.
• All this bill does is provide a two-year respite before allowing the USPS to move to five-day delivery.

• I oppose Sen. McCain's proposal to move immediately to five-day delivery. This bill simply eases the way into five-day.

• The PRC has projected that USPS delivery day savings are less than what the Postal Service has stated.
• The PRC warned that shifting to five-day would have an adverse impact on mail volume.

• If we insist on micromanaging, the USPS won't be able to do what needs to be done.

• Less and less real mail is being delivered, and more and more junk mail is being delivered.
• I don't believe the taxpayer should be stuck on the hook because we want to insist on six days of delivery.

Akaka: Motion to strike provisions regarding FECA (workers compensation)

 - - -The Akaka amendment to strike provisions regarding FECA (workers compensation) was not adopted.

Johnson: Motion to strike additional service credits.

• This amendment would remove the one-year (CSRS) and two-year (FERS) retirement incentive credits. We're spending a retirement surplus that would be a good buffer. This is an unprecedented pay-out.
• The limit ought to be capped at $25,000 whether you take a pay-out or credit.

• The PMG says these credits will help reduce the size of its workforce by another 100,000 employees. The savings should be much greater than the costs. We should continue to work on this as we go to the floor.

Begich: Motion to clarify the meaing of comparability in the law for arbitration. (Motion withdrawn by the sponsor for later possible consideration.)

Begich: Motion to state that in Title 39 there should be no limits on the factors to be considered in arbitration. (Motion withdrawn by the sponsor for later possible consideration.)

Paul: Motion to end the mailbox monopoly and allow customers to choose who can deposit mail. The mail box is private property and the owner decides how is should be used.

Lieberman:

• One result of this amendment would be to hurt the Postal Service and would permit competitors to "cherry-pick" the business it wants. It also could lead to an increase in postal rates.

• I share the chairman's concerns.

Pryor: Motion to require the Postal Service to explain its rationale for not adhering to a PRC advisory opinion.

+++The Pryor amendment to require the Postal Service to explain its rationale for not adhering to a PRC advisory opinion was adopted.

Moran: Motion to suspend the closing of post offices until the establishment of retail service standards is established.

+++The Moran-Tester-Collins-Pryor-Begich-McCaskill amendment to suspend the closing of post offices until the establishment of retail service standards is adopted (i.e., including consideration of alternative service provisions).

Akaka: Motion to strike section 103 (relating to Medicare coverage for Postal Service Medicare eligible annuitants).

• This provision will further burden the Medicare program, which is already under stress.

• This provision will save the Postal Service considerable money, but it maintains a level of health care coverage which is comparable to others within the public and private sector. If the projected savings are not realized, the program would end.

Tester: Motion to limit the compensation of the PMG and other postal officers and employees to be no more than the rate of pay provided to a Member of Congress ($174,000). (Motion held in abeyance for consideration on the Senate floor.)

Collins:

• The USPS is a very large enterprise, but I'm troubled that bonuses are being provided when the institution is losing so much money.

• I'm not averse to tying compensation to results.

• The bonus issue is a bother to me too.

Collins:

• The Postal Service is spending more than a billion of dollars a year on workers compensation expenses. For current enrollees there is no change at all for anyone considered 100% disabled. For those who are not permanently disabled, the benefit level would go  to 66.67% of the salary they would receive at retirement.

McCaskill: Motion to allow the national directory of new hires be accessible to GAO for all its audit work.

+++The McCaskill motion to allow the national directory of new hires be accessible to GAO for all its audit work was adopted.

+++The Committee approved the substitute to S. 1789 as amended and will be referred to the Senate floor..+++