Flashback: Congress Says 2006 Postal Reform Bill Will Make USPS Viable for 21st Century
Are we in the 22nd Century yet? On December 20, 2006, the “Postal Accountability and Enhancement Act of 2006″ was passed in both House and Senate (Darrell Issa was there at the time). This legislation was supposed to “modernize the United States Postal Service and make it viable for the 21st century. The legislation, the first major overhaul of the USPS since 1970, will help stabilize mail volume and stamp prices.”
Now, almost FIVE YEARS LATER Postal Reform has taken center stage once again with the same so-called problems as Congress said it fixed in 2006.If the Postal Accountability and Enhancement Act of 2006 was flawed Congressman Darrell Issa did not say a word until he became Chairman of the House Oversight and Government Reform Committee. In short, Issa has been quieter than the night before Christmas on issues facing the Postal Service until it became politically expedient to do so.
Highlights of the “Postal Accountability and Enhancement Act of 2006″ include:
• Reaffirms USPS employees’ right to collectively bargain. This bill only makes changes to the bargaining process that have been agreed to by both the Postal Service and the four major unions. It replaces the rarely used fact-finding process with mediation, and shortens statutory deadlines for certain phases of the bargaining process. (Now Issa/Ross wants to override the will of his colleagues)
• Repeals a provision of Public Law 108-18 that required money owed to the Postal Service due to an overpayment into the Civil Service Retirement System Fund to be held in an escrow account, which would essentially “free up” $78 billion over a period of 60 years. These savings would be used not only to pay off debt to the U.S. Treasury but also to fund health care liabilities, and mitigate rate increases.
• Returns to the Department of Treasury the responsibility for funding CSRS pension benefits relating to the military service of postal retirees. No other agency is required to make this payment.
Here is what some players responsible for the passage of the Postal Reform of 2006 had to say:
“As part of the reform, the legislation updates the Postal Service’s antiquated, costly regulatory system, toughens oversight, and allows the Postal Service to both act and compete as a modern business,” said Rep. John McHugh, R-N.Y., one of the key legislators pushing the bill.
“The U.S. Postal Service is the lynchpin of a $900 billion mailing industry, providing nine million jobs nationwide in fields as diverse as direct mailing, printing, catalog companies, paper manufacturing, and financial services. But under its current business model, which has not been updated in decades, the financial future of the Postal Service is not viable,” said Senator Collins. “The only way to avoid what the Government
Accountability Office refers to as a ‘death spiral’ – of excessive and unpredictable rate increases which lead to further reductions in mail volume – is through the comprehensive reform that we accomplished here today.”
“This legislation will help us avoid disastrous future postal rate hikes and put the Postal Service on firm financial footing for the 21st century,” said Senator Carper. “The bill would give the Postal Service the tools it needs to survive at a time when more and more people communicate and do business through faxes, email and electronic bill-pay rather than hard-copy mail. My thanks to Senator Collins and Congressmen Davis and Waxman for coming together to craft this compromise. The legislation will go a long way toward making sure the Postal Service has the flexibility it needs to compete in the new economy.”
“This is the culmination of more than a decade of hard work and study, not to mention a great deal of bipartisan negotiation and cooperation,” Government Reform Committee Chairman Tom Davis (R-VA) said. “The landmark legislation solves the structural, legal, and financial constraints that have brought the Postal Service to the brink of utter breakdown. This compromise will reverse the ‘death spiral’ at the Postal Service and bring it into the 21st century. It’s a huge win for everyone who uses stamps.”
“My colleagues and I have been working for nearly a decade to reach a bipartisan, bicameral compromise on postal reform legislation,” said Rep. Waxman. “This is a historic accomplishment and will help one of the most revered institutions in America survive and prosper in the electronic age.” The Postal Service is in a period of transition. When it was created in 1971, nobody had access to fax machines, cell phones, pagers and email. After nearly three decades of success, these new communications technologies have caught up with the agency. In recent years, the volume of First Class mail has steadily decreased. At the same time, more than 1 million new addresses are added to delivery routes each year. The result: Delivery costs have increased at the same time that revenues are being threatened.
The legislation would force the Postal Service to concentrate on what it does best – processing and delivering mail to all Americans. The bill, entitled the Postal Accountability and Enhancement Act, would dramatically rethink the way the Postal Service prices its products by giving it the same ability any other business has to change prices whenever it needs to do so. But to protect businesses and mailers from sudden and dramatic price hikes, the legislation would ensure that price increases be kept below an inflation- based ceiling.
In addition, the bill would give the Postal Service the freedom to introduce new, innovative products or tailor existing products to meet customers’ needs, which should help attract new business and increase revenues. The bill would also shore up the Postal Service’s finances by repealing a provision in current law that makes the Postal Service the only agency in the federal government responsible for its employees’ military pension benefits, returning this obligation to the U.S. Treasury. Another provision will permanently correct the Postal Service’s flawed pension formula, a formula that was leading to significant overpayments and contributing to higher rates. These provisions will free up billions of dollars, giving the Postal Service the ability to begin paying down its debts.
What has happened in FIVE YEARS to fully place USPS into the Postal Museum? NOTHING, except pushy politicians trying to carry out goals of giving private companies part of the Postal Service’s billions. Sure mail volume has dropped but a decrease in mail volume alone has not caused the postal service into a $10 billion deficit at the end of FY 2011.