Oversight Committee Approves Issa-Ross Postal Reform Bill

Published: Oct 13, 2011

WASHINGTON D.C. – The House Committee on Oversight and Government Reform today approved H.R. 2309, the Oversight Committee Postal Reform Act of 2011 which will return the United States Postal Service (USPS) to sustainability and profitability without a taxpayer bailout.  The Issa-Ross bill is the only postal reform proposal that has been successfully acted on this Congress.

“The United States Postal Service cannot become a taxpayer subsidized make-work program. To save the Postal Service, we must enact meaningful and immediate reform so we can maintain service to the American people and return it to financial solvency,” said Rep. Darrell Issa (R-CA),  Chairman of the House Committee on Oversight and Government Reform.  “The postal service is on the brink of collapse.  Today, we have acted to pass a bill and provide an immediate and viable path forward to make the postal service more efficient, protect its workforce and ultimately return it to being a profitable enterprise.  The reality is that failure to act now on the Issa-Ross bill will result in an automatic taxpayer-funded bailout.”

“We can no longer afford to postpone the Postal Service’s day of reckoning by putting our collective heads in the sand and wishing the problem away,” said Rep. Dennis A. Ross (R-FL), Chairman of the Oversight subcommittee on postal reform. “Members here today are faced with a stark choice: Are we willing to make the hard decisions necessary to save the Postal Service or will we let it crumble on our watch and potentially put this venerable institution at risk – along with the jobs of the 8 million Americans who work in the mailing industry?”

You can watch Chairman Issa’s opening remarks here. You can watch Subcommittee Chairman Ross’ comments here.

The Oversight Committee Postal Reform Act of 2011 was approved on a 22-18 vote. Senator John McCain (R-AZ) has introduced a companion bill in the Senate. For more information visit http://SavingThePostalService.com.

Below, you’ll find a summary of the provisions in the bill as amended.

Summary of the H.R. 2309, the Postal Reform Act, as Amended

Prevents Taxpayer Bailouts: plan delivers an efficient, effective Postal Service without the thinly-veiled taxpayer bailout proposed by other bills and thoroughly denounced by the Government Accountability Office.

Modernizes Delivery Standards: the Postal Reform Act saves an estimated $3 billion a year by giving the Postal Service the option of eliminating Saturday delivery six months after the enactment of the legislation. According to polling by Quinnipiac University, 79% of the American people favor moving to 5 day delivery in order to restore the Postal Service to solvency.

Normalizes Rates: phases out many special rates for certain customers that force the Postal Service to actually charge certain customers less than the true cost of delivery, while preserving the ability for non-profits to fundraise and communicate with a mass audience in an economical manner.

Ends Special Treatment for Political Parties: the legislation eliminates the ability of the national and state political committees to use the non-profit mail rate.

Shares Sacrifice in Post Office Consolidations- Empanels a BRAC-style two-year task force, directed to recommend a plan to consolidate redundant post offices – saving at least $1 billion a year, excess mail processing faciliites – saving at least $2 billion per year – and the 30% of management facilities. The legislation ensures that small post offices that do not cost much to operate but serve isolated areas are maintained in order to preserve universal service. Under current closure rules, rural post offices are unfairly targeted by strict formulas on foot traffic that fail to account for community impact. The legislation also preserves appeal rights for citizens affected by post office consolidation.

Normalizes Pay & Benefits: mandates that postal workers pay at least the same health and life insurance premiums federal workers do, and clarifies that compensation parity with the private sector is maintained.

Establishes a Restructuring Authority to Turnaround Postal Defaults:when the Postal Service fails to pay its bills for more than 30 days, a receivership-style authority takes over for USPS management with an explicit mandate to cut costs while maintaining universal service. Management is replaced if they cannot successfully restructure Postal Service finances. Restructuring will be financed with an up to $10 billion line of credit that must be fully collateralized by postal facilities. The restrucutring authority will have the ability to make policy changes to cut costs as well- for instance- by moving from expensive door delivery to curb or clusterboxes in neighborhoods, the Postal Service will save $3.5 billion annually, while maintaining to the greatest extent possible door service in poor, densely populated, and historic neighborhoods. The solvency authority will also have the ability to remove postal workers from the expensive federal workers compensation system to be placed in their own.

Enables Postal Service to Pursue New Revenue: even though the Postal Service is supposed to act like a private business, it can’t make money from selling advertisements. The Issa-Ross Postal Reform Act allows USPS to sell advertising space on vehicles and facilities, as long as the ads respect the Postal Service’s integrity.

Offers an Affordable Payment Plan for Retiree Health Care Benefits-Allows the Postal Service to make the retiree health care funding payment they can make this year, roughly $1 billion, and pay the balance in equal installments in Fiscal Year 2015 and Fiscal Year 2016.

Surpluses in Pension Accounts to Facilitate Workforce Rightsizing-Provides for consideration of using a net surplus in all Postal Service pension accounts to fund the cost of reducing the size of the postal workforce. This provision protects taxpayers by ensuring that surplus funds are only accessible if there is an actual net surplus in all accounts.

No-More No-Layoff Clauses- No-layoff clauses are prospectively barred in Postal Service collective bargaining agreements. For employees who might lose their job, they will receive a hiring preference at Postal Service contractors. Postal employees would be subject to the same Reduction-in-Force authority as the rest of the federal workforce.