Rep. Chaffetz Introduces Bill Designating 12 Postal Holidays To Reduce USPS Operating Costs
Congressman Jason Chaffetz (R-Utah) issued the following press release:
Washington, DC—Today Congressman Chaffetz introduced HR 5919. This bill would grant USPS Postmaster General the authority to implement up to twelve “postal holidays” per year in order to reduce USPS operating costs. The Postmaster General would select days in which delivered mail volume is historically lower than normal. By reducing the number of delivery days, USPS will be able to achieve savings by reducing work hours.
“USPS is experiencing severe financial pressures due to competition from the Internet, reduced demand due to the recession, and large unfunded liabilities for retiree healthcare,” said Chaffetz. “While my bill will help to reform its dire financial situation, there is no silver bullet that will solve the Postal Service’s financial problems. Postal holidays are one of many steps needed to reform the Postal System. I am also supporting efforts to consolidate postal facilities by replicating the successful BRAC process that was used to close surplus military facilities.”
• In past three years, USPS has lost $12 billion and is expected to lose about $7 billion this year.
• At the end of FY 2009, USPS was $10 billion in debt and is expected to reach its maximum debt limit of $15 billion in 2011.
• USPS Postmaster General John Potter has stated that USPS could lose $238 billion over the next ten years unless significant reforms are implemented.
• The USPS retiree health benefit plan was $52 billion underfunded at the end of fiscal year 2009.
Congressman Stephen Lynch Introduces Legislation To Correct USPS CSRS Retirement Overpayments
Congressman Stephen Lynch introduced legislation yesterday to correct methodology which overcharges USPS for its CSRS retirement obligations. The legislation amends the provisions of title 5, United States Code, relating to the methodology for calculating the amount of any Postal surplus or supplemental liability under the Civil Service Retirement System.
This is a bill in the U.S. Congress originating in the House of Representatives . A bill must be passed by both the House and Senate and then be signed by the President before it becomes law.
SPEECH OF HON. STEPHEN F. LYNCH
OF MASSACHUSETTS
IN THE HOUSE OF REPRESENTATIVES
THURSDAY, JULY 15, 2010
Mr. LYNCH. Madam Speaker, the United States Postal Service’s CSRS Obligation Modification Act of 2010, is intended to remedy a unfair and inequitable methodology for allocating the Postal Service’s share of Civil Service Retirement System, CSRS, retirement benefit liabilities for employees that provided service to this country under both the Post Office Department and the independent United States Postal Service.
According to a January 2010 report by the United States Postal Service’s Office of Inspector General, USPS-OIG, the Postal Service paid more into the Civil Service Retirement and Disability Trust Fund that it would have paid if a more equitable methodology were used to allocate CSRS retirement benefit liabilities between the Federal government and the United States Postal Service.
As a result of the USPS-OIG report’s findings, the Postmaster General of the United States Postal Service submitted a request, in accordance with section 802(c) of the Postal Accountability and Enhancement Act, to the Postal Regulatory Commission, PRC, calling for an independent and objective review of the methods used to allocate benefit liabilities between the Postal Service and the Federal government under generally accepted actuarial practices and principles.
The independent actuarial firm hired by the PRC, The Segal Company, determined that the current methodology used by the Office of Personnel Management, OPM, for allocating such retirement benefits between the United States Postal Service and the Federal government follows an antiquated methodology that fails to incorporate current actuarial best practices and accounting standards as recognized and codified by the Financial Accounting Standard Board.
Accordingly, to remedy this unjust treatment, this legislation I am introducing today directs OPM to update and modernize the actuarial methodology to be used in allocating CSRS retirement benefit liabilities between the United States Postal Service and the Federal government in accordance with The Segal Company’s recommendation. Under this approach, the Federal government’s portion of an individual’s CSRS annuity will be based on the CSRS benefit accrual formula and the conventional individual’s “high-3” average salary. By utilizing this methodology, this legislation will ensure that OPM is using modern actuarial practices and accounting standards to apportion the benefit liabilities that are codified by the independent Financial Accounting Standard Board under FASB ASC 715.
USPS Asks To Eliminate Saturday Delivery – Congress Still Has Questions
Excerpts from a report issued by INSTITUTE FOR RESEARCH ON THE ECONOMICS OF TAXATION (IRET)
Since 1983, Congress has annually included a rider in appropriations bills requiring the Postal Service to deliver mail six days a week. This paper examines the main developments since early 2009, when the Postal Service requested authority to eliminate the sixth delivery day.
• The Service has fleshed out the details of its five-day-a-week delivery plan.
• It has updated its estimate of the expected net savings: $3.1 billion yearly based on 2009 data and $40 billion over the next 10 years.
• The Service recently asked its regulator, the Postal Regulatory Commission (PRC), for an advisory opinion on five-day delivery, and the PRC expects to issue its findings in the Fall.
• Plunging mail volume and huge losses in 2009 and 2010 intensify the sense of urgency.
• Studies commissioned by the Service predict that a continuing mail volume decline and a shift away from highly profitable first class mail will produce monumental deficits over the next 10 years unless the Service implements major changes. A Government Accountability Office (GAO) study concurs that the Postal Service’s current business model is not financially sustainable.
• The Service has developed a 10-year business plan (the “Action Plan”) in which five-day delivery is a key element, expected to close about one-third of the residual 10-year deficit.
The Postal Service has sensibly cast five-day street delivery in terms of trade-offs. Do the benefits of six-day delivery justify the costs? Would dropping Saturday delivery be less harmful than other policy alternatives? The Postal Service claims that five-day delivery would be among the least painful options for postal customers.
Alternatives to five-day delivery are hiking postal rates or in other ways boosting revenue, cutting costs beyond the savings contemplated in the 10-year plan, deferring costs (a temporary measure), borrowing (another temporary measure), or obtaining money from Congress (ultimately taxpayers).
The most attractive alternative, which would save more than enough to allow six-day delivery to continue, would be bringing postal wages and benefits more into line with those in the private sector and quickly rationalizing the Service’s nationwide network of processing facilities.
Congress did not allow the Service to eliminate Saturday delivery last year and will probably not permit it this year. However, unless mail volume rebounds strongly (a longshot but not impossible), five-day delivery may be a matter of when, not if.
Updated: Postal Service’s History of Seeking Five-Day Delivery to Cure Financial Woes
Documents submitted by PostalReporter reader shows the Postal Service’s History of requesting 5-day delivery to relieve its financial woes.
The 94th and 95th Congresses
Representative Tom Corcoran stated at a congressional hearing that the Postal Service took its first formal step toward eliminating one delivery day per week in 1976 when it conducted a study to examine the possible effects of such delivery reduction.That study, according to Corcoran, was completed, but a formal proposal stemming from the study was not drafted. Instead, in 1977, the congressionally created Commission on Postal Service (created in 1975) submitted to Congress and the President a report that discussed the possibility of transitioning to five-day delivery. The members of the congressional commission were divided on whether to recommend eliminating a day of Postal Service delivery. The commission’s final report said that five of the seven commissioners reluctantly recommended the reduction in delivery, but did not say which day of the week would be the optimal day off.
A series of congressional hearings were held on six-day delivery from November 1977 through March 1978. According to Representative Patricia Schroeder, who opened the hearings, the Postal Service prompted the hearings by proposing a cut back in delivery service.36 Although the Postal Service had made no formal indication that it supported the elimination of one service day, one Member of Congress said that “statements made by postal officials indicate[d] they [were] leaning toward making such a recommendation.”In all, Congress held 12 hearings in as many cities with more than 500 testimonies offered between November and March. Those who testified included Members of Congress, union representatives, editors and publishers, the general public, and representatives of the aging. Most of those who testified did not support a reduction in Postal Service deliveries, finding such cuts a “disservice”38 that could result in “possible delay in the receipt of welfare, social security, pension checks, and so forth—the kind of mail that people receive … on weekends and through Saturday mail.”
In addition to concerns about mail delivery in general, much of the testimony framed the debate over six-day delivery as a tension innately embedded in the mission of the Postal Service: is it a profit-driven organization, or a public service? Representative Timothy E. Wirth stated at one hearing that the six-day service was a “social value,” and that cutting a day of service at a time when people were “losing some of their faith in what government can do for them” would exacerbate their disillusionment.
1977 House Report on Saturday Mail Delivery
Early this year, the Commission on Postal Service, a special study commission created by Public Law 94-421 to study the public service aspects of the Postal Service and other subjects, issued a report recommending that Saturday mal delivery be discontinuance of Saturday delivery service would reduce postal costs by $412 million annually. Through attrition, approximately 18,000 full-time positions would be eliminated. The Commission attempted to support its recommendation in part on the basis of a small survey of public opinion which showed that 79 percent of the individuals surveyed would be willing to give up Saturday mail delivery if such a reduction in service helped hold down postal costs.
Immediately following the Commission’s report on April, the Postmaster General summoned the leaders of major postal union to discuss the discontinuance of Saturday mail delivery.
The 96th and 97th Congresses
In 1980, the House Committee on the Budget was expected to propose an $836 million reduction in Postal Service appropriations for FY1981.42 According to Representative James M. Hanley, the chairman of the House Committee on Post Office and Civil Service, the reduction in appropriations would have eliminated “all of the public service appropriations” and other subsidies for the Postal Service.43 At a March 26, 1980, hearing before the House Committee on Post Office and Civil Service, then-Postmaster General William F. Bolger stated that eliminating Saturday delivery was one option the Postal Service was considering to ensure its economic stability in the face of the budget cuts. Bolger estimated the service reduction could result in the elimination of 15,000 to 20,000 Postal Service jobs, but would save the Service about $588 million.
The 1980 Task Force
On March 25, 1980, Postmaster General William F. Bolger established a task force to analyze the possible effects of moving from a six- to a five-day delivery schedule. The task force conducted a study, which consisted of telephone interviews of 320 major mailers and 13 selected industries and government agencies. It found that moving to five-day delivery could save $588 million in the first full year of implementation.85 The savings were estimated to “exceed $1 billion annually in future years.”With the cost savings, however, were predicted increases in other stresses for the Postal Service, like loss of patrons to private mailing services or adverse effects on “the levels of service provided to mail on the remaining delivery days.”87 In spite of the projected cost and fuel savings, the task force stopped short of endorsing a reduction in delivery service, saying “[t]he potential cost reduction is extremely attractive; but it is clear that the risks to service and future postal revenues are high.”
The task force recommended a 12- to 18-month planning period if any action to move to five-day delivery was to be made. No such planning period occurred. In addition, the task force suggested that if five-day delivery were to occur, Saturday should be the eliminated day because it “will not greatly affect the majority of … business mailers.”89
April-May 1980 Senate Hearing
There are, of course, a number of factors which have contributed to the operating deficit; however, inflation has undoubtedly been the great factor. The sharp rise could not have been foreseen when the 1970 law was enacted, and it has has a major impact not only on labor costs, which comprise 86 percent of the USPS budget, but on construction, materials and equipment, and operations in general. Also unforeseen was the relentless rise in the cost of energy. The USPS estimates that for every 1-cent increase in the cost of a gallon of gasoline, the transportation costs increase by $3 million.
Mr. Chairman, these hearings are taking place in concert with the Senate’s consideration of the fiscal year 1981 budget. There has been a great deal of discussion about reducing mail delivery delivery from 6 to 5 days in order to meet the anticipated cut in the postal budget. I am concerned that such a decision could exacerbate the current trend of mailers seeking alternate delivery systems and thus decrease further the revenues of the Postal Service.
The President’s Commission on the Postal Service
In 2003, the President’s Commission on the United States Postal Service, created by President George W. Bush, anticipated an “unstable financial outlook” for USPS.90 The commission, however, adamantly rejected any action that would reduce delivery days to five. The Commission firmly recommends continuing the Postal Service’s current Monday
through Saturday delivery regimen. While the Postal Service could save as much as $1.9 billion (less than 3% of its annual budget) by reducing its delivery schedule by one day a
week, its value to the nation’s economy would suffer. Beyond the universal reach of the nation’s postal network, the regularity of pick-up and delivery is an essential element of its
worth in the current climate. Elimination of Saturday delivery, for example, could make the mail less attractive to business mailers and advertisers who depend upon reaching their target audience on that day. In addition, given the volume of mail the nation sends each day, scaling back to a five-day delivery regimen could create difficult logistics, mail flow, and
storage problems.
While the report advised continuing six-day service, the commission noted that increasing use of electronic mail was leading to “a reduction in the demand for mail services” that could lead to a “relaxation of the six-day delivery requirement” in the future.
Documents
May1976HouseHearingsMailCutback
1977HouseReportSatMailDelivery
Nov1977-Mar1978House6DayHearings
Apr-May1980SenateHearings (PDF)
My Five-Day Experience, by Postal Pete
On the day I was born June 12, 1957:
“Postmaster General Summerfield today outlined for Congress a series of cuts in postal service which he plans to put into effect July 1 if his department is not given more money … The list, submitted at a closed meeting, was reported to include: Elimination of Saturday mail deliveries … (and) closing of 2,000 small fourth-class post offices.”
When I was almost five years old :
Feb 19 1962
The Kennedy administration has studied the discontinuance of Saturday mail delivery but fears any publicity might adversely affect its proposals for raising mail raise, Postmaster General J. Edward Day has told Congress …
(Day) said the (post office) department estimated it could save $100 million a year by ending Saturday mail delivery.
When I was eighteen:
Nov 24 1975
With the United States Postal Service losing more that $250,000 an hour, Postmaster General Benjamin F. Bailar is considering further economic moves such as discontinuing Saturday mail deliveries …. The Postal Service … ran up a $1.5 billion debt as of last July.
The year I took the postal exam:
March 29 1977
“The Commission on Postal Service … voted 5 to 2 to recommend elimination of Saturday delivery, a step that would save $400 million a year … Elimination of Saturday delivery is likely to be unpopular on Capitol Hill. Numerous legislators denounced the idea when the service said it was being considered a year ago.”
and so it continued throughout my postal career:
Feb 7 1981
Saturday mail deliveries, Amtrak train service and urban programs, survivors of last year’s spending cuts, face a new threat from President Reagan’s budget ax, according to internal administration documents obtained Friday … (The documents say), “The possible reduction of service to five-day delivery is a symbol of the seriousness of the fiscal austerity being imposed by reductions throughout the federal government.
December 15, 1987:
The Postal Service lost $223 million in the fiscal year that ended Sept. 30 … Possible major effects … include … Seeking congressional permission to eliminate delivery on Saturdays … closing 10,000 to 12,000 small post offices, primarily in rural areas.
October 16, 1992:
Postmaster General Marvin Runyon said Thursday that he backs continuing Saturday deliveries but wonders whether home delivery could be cut from six to four days a week…
His suggestion was to eliminate Tuesday and Thursday mail for home deliveries, keeping deliveries on Monday, Wednesday, Friday and Saturday. Business deliveries would remain six days a week.
April 9, 2001:
The U.S. Postal Service is thinking about ending Saturday deliveries — and shutting down post offices in rural and remote areas, and raising the price of stamps even more … because it finds itself in almost exactly the position the railroads were in after commercial jet travel became commonplace…
Something quicker came along: regularly scheduled jets. We said we loved the railroads — but we headed to the airports. We gave the railroads our hearts, but not our money… This country will feel different — diminished — without Saturday mail.
But the country already feels different. Fax machines, privately owned overnight delivery services, and — most significantly — the huge growth in e-mail have transformed the way that we write to each other.
December 31 , 2008:
After thirty years of service I take the early out and talk of five day delivery resurfaces.
Postal Pete
Pete Countryman
Sectional Center Facility
Elizabethtown, Kentucky 42701
30 yrs USPS / APWU
USPS: New Mailing Rules for Tobacco Products Set for Summer
Changes to law restrict mailing of tobacco products
WASHINGTON — To comply with legislation passed by Congress and signed into law by the President, cigarettes and smokeless tobacco products will be subject to new mailing regulations effective June 29, 2010. The law, Prevent All Cigarette Trafficking Act, Public Law No. 111-154, was signed into law March 31.
With only a few limited exceptions, the Postal Service will no longer be allowed to accept or transport packages containing cigarettes or smokeless tobacco products. The general mailability ban will extend to cigarettes, roll-your-own tobacco and smokeless tobacco. The prohibition does not include cigars.
Shipments entirely within Alaska and Hawaii will continue, subject to certain labeling and acceptance requirements.
The law does permit infrequent lightweight shipments by age-verified adults to recipients who are at least the age of majority for purchase of tobacco. Shipments between businesses in the tobacco industry will also be permitted, as well as cigarettes sent to consumers age 21 and above for testing or public health purposes.
Most shipments will require photo identification and age verification consistent with the minimum age requirements in the locality of destination.
With the exception of shipments entirely within Alaska and Hawaii, shipments are permitted only via Express Mail and, with the exception of shipments from the United States to APO/FPO/DPO destinations, will be delivered using “hold for pickup” service at the destination Post Office.
source: USPS
Maryland Senators, Congressman Call Report On Closure of Easton Mail Facility “Unacceptable”
Filed under: Congress, consolidations, postal, press releases, usps
Senators, Congressman target failure of report to include impact on mail delivery service or to consult Eastern Shore residents, workers
U.S. Senators Barbara A. Mikulski and Benjamin L. Cardin and Congressman Frank M. Kratovil (all D-Md.) today again expressed their concerns about the potential closure of the Easton Mail Processing and Distribution Facility in a letter to Postmaster General John E. Potter. They once again demanded additional opportunities for public comment on the closure and an explanation of how service to Eastern Shore residents will be affected.
In a letter to the Postmaster General dated May 19, Senators Mikulski and Cardin and Congressman Kratovil requested additional public information sessions be scheduled in Ocean City, Salisbury and Chestertown. In its May 28 response, the Post Office refused to grant the delegation’s request and failed to address residents’ concerns about how the facility closure will affect mail delivery.
“Our requests…are simple: first, schedule three additional public meetings, one each in Ocean City, Salisbury and Chestertown, in addition to the public meeting scheduled in Easton. Second, provide residents and business owners with detailed information about how the potential closure will affect their mail service. Finally, listen to the residents of the Eastern Shore, giving serious consideration to their needs. Then, and only then, should a decision be made about the fate of the Easton Mail Processing Facility.”
View the Maryland Delegation’s May 19 letter here:
http://mikulski.senate.gov/_pdfs/Press/May19EastonProcessingandDistributionFacilityLetter.pdf
View the Postmaster General’s May 28 response here:
http://mikulski.senate.gov/_pdfs/Press/May28EastonPostalFacility.pdf
The text of the today’s letter follows:
June 2, 2010
Mr. John E. Potter
Postmaster General
United States Postal Service
475 L’Enfant Plaza SW
Washington, D.C. 20260Dear Postmaster Potter:
On May 19, we wrote directly to you requesting that the U.S. Postal Service schedule additional public information meetings at different locations on the Eastern Shore so that residents throughout the Shore would have an opportunity to express their concerns regarding the proposed closure of the Easton Area Mail Processing Facility.
On May 28, we received a response from your staff member, Marie Theresa Dominquez, VP of Government Relations and Public Policy, and the message was clear: the Postal Service is taking a one-size-fits-all approach to the mail service needs of Maryland’s unique Eastern Shore and hiding behind “process.” No additional public meetings will be held prior to completing the Area Mail Processing Study that could lead to the facility’s closure. Ms. Dominguez maintains that only one meeting is warranted, despite the Eastern Shore’s unique geography, its citizen’s dependence on mail service, and the outcry of local residents and their elected representatives. We are deeply disappointed by this response.
The Eastern Shore of Maryland is a region where people still rely heavily on the mail service. If the Easton facility closes, a letter mailed from Ocean City to Chestertown would have to be routed through Baltimore, which would add to the letter’s travel time. Coupled with the summer traffic and wind restrictions along the Chesapeake Bay Bridge, mail service would be delayed even further. The Area Mail Processing Study makes no mention of these considerations. It fails to address how the Easton facility’s closure will affect the delivery of mail on the Eastern Shore. It refers only to how much money it will save. For these reasons, we consider the preliminary study unacceptable.
We also find it unacceptable that, despite assurances that a final decision had not been made and that public input is desired through June 30, the U.S. Postal Service has informed the workers at the Easton facility of its closure. This is a violation of the public trust.
Our requests, as we wrote to you on May 19, are simple: first, schedule three additional public meetings, one each in Ocean City, Salisbury and Chestertown, in addition to the public meeting scheduled in Easton. Second, provide residents and business owners with detailed information about how the potential closure will affect their mail service. Finally, listen to the residents of the Eastern Shore, giving serious consideration to their needs. Then, and only then, should a decision be made about the fate of the Easton Mail Processing Facility.
We strongly urge you to reconsider your response to our request and right the wrongs we’ve outlined here. We look forward to hearing back from you within the week.
Sincerely,
Barbara A. Mikulski
United States Senator
Benjamin L. Cardin
United States SenatorFrank M. Kratovil, Jr.
Member of Congress
Congressman To USPS OIG: New Documents Show Wage Theft In New Hampshire Post Offices Continues
Washington, D.C. – Today, Paul Hodes and Congresswoman Carol Shea-Porter are demanding an investigation into a new round of allegations that letter carriers at even more post offices have been shortchanged on their paychecks. In documents obtained by Hodes, post offices in Dover and Salem, New Hampshire are shown to have manipulated letter carriers’ time sheets to remove overtime pay and earned wages.
“Cheating workers out of their pay is a very serious offense and threatens the livelihood of these hardworking New Hampshire families,” said Hodes. “These troubling allegations must be investigated thoroughly, and any stolen pay should be immediately reimbursed to these workers.”
“The Office of Inspector General (OIG) has already found time sheet tampering of letter carriers throughout the State and these actions cannot continue,” said Congresswoman Carol Shea-Porter. “After taking a close look at these new documents, I believe it is appropriate for the OIG to investigate these new incidents.”
Never before seen evidence of manipulated timesheets has been sent to the chief investigator for fraud at the US Postal Service. Hodes and Shea-Porter have demanded an investigation into these documents and the alleged wage theft against New Hampshire workers.
Last year, Hodes spurred similar investigations at several New Hampshire post offices which led to thousand of dollars in repaid wages for workers. The investigations concluded that managers at five New Hampshire postal stations were found to be cheating workers out of rightfully earned wages. In total, previous investigations have uncovered 103 employees who were shortchanged, and the Hodes investigation has already led to $37,600 in wages being returned.
The full text of the investigation request is below:
Dear Inspector General Williams:
We have received reports of time adjustment tampering at two additional United States Post Offices in New Hampshire—Dover and Salem. We urge an Office of Inspector General investigation into the alleged theft of letter carriers’ hours in these post offices.
These new reports of time tampering are troubling, since it has already been determined that New Hampshire letter carriers were cheated out of their wages in an investigation that the Office of Inspector General completed in October, 2009. Your office found improper and inappropriate time adjustments in four post offices in New Hampshire: Milford, Manchester South Station, Somersworth and Salem.
We enclosed for your consideration copies of adjusted time schedules in Dover and Salem that we received from the New Hampshire branch of the National Association of Letter Carriers. The documents include allegations of improper moving of codes, deleted times from carriers, and deleting “no lunch.” In Salem, we urge an expansion of your previous investigation to examine the enclosed data that may include inappropriate reductions in carriers’ overtime.
We encourage a swift review of and report on the allegations of wage theft. If the allegations prove true, we must stop the pattern of unethical and inappropriate underpayments of hard working letter carriers in New Hampshire’s post offices.
Congresswomen Introduce Bill To Honor Two Postal Employees Who Died In Anthrax Attack
The following is a press release from the office of Congresswoman Eleanor Holmes Norton:
April 28, 2010
WASHINGTON, DC- Congresswoman Eleanor Holmes Norton (D-DC) today introduced a resolution, along with Congresswoman Donna Edwards (D-MD-04) as an original co-sponsor, to honor the lives of Joseph Curseen, Jr. and Thomas Morris, Jr. with a commemorative stamp issued by the United States Postal Service. Both men died in the anthrax attack at the Brentwood Post Office in the District, now named in their honor. “These two men, born and raised in the District, dedicated their combined 52 years of service to their country and to the United States Postal Service as committed employees,” Norton said. “A commemorative stamp, not only will honor the memory of their service and sacrifice, but will also remind Americans of the work and diligence of all of those who protect the American people and the homeland.” The two men, who resided in Congresswoman Donna Edwards’ congressional district, are eligible for stamp commemoration, because the five-year time period since their deaths has passed.”
Norton’s statement on the resolution is attached.
REMARKS OF
CONGRESSWOMAN ELEANOR HOLMES NORTON
ON THE INTRODUCTION OF THE
Anthrax Attack Commemorative Stamp Resolution
April 28, 2010
Ms. NORTON. Madam Speaker, today I introduce a resolution directing the Citizens’ Stamp Advisory Committee to recommend to the Postmaster General that a commemorative stamp be issued to honor the lives of Joseph Curseen, Jr. and Thomas Morris, Jr., the two United States Postal Service (USPS) workers, and District of Columbia natives, who died as a result of their exposure to anthrax while working at the USPS facility located at 900 Brentwood Road, NE, Washington, D.C., during the 2001 anthrax attack. This commemorative stamp meets the Citizens’ Stamp Advisory Committee’s requirement that no postal item may be issued sooner than five years after an individual’s death.
Joseph Curseen, Jr. and Thomas Morris, Jr. served the USPS honorably and diligently for a combined period of 52 years until their deaths on October 22, 2001, and October 21, 2001, respectively. Curseen, remembered as a quiet man with a fuzzy mustache, loved to tell stories and loved his church. He was so dedicated to his work, that during the 15 years that he worked for the USPS, he never called in sick. His co-workers described him as someone who was kind and courteous, who stayed at the Post Office seven days a week, giving up breaks to get the mail out, and who regularly led a postal worker Bible study group. In his neighborhood of Cambridge Estates, Maryland, Curseen was the president of the homeowners association, an avid jogger, and a member of St. John the Evangelist Church. To his neighbors, Curseen was someone who everyone knew, who was friendly, and who worked quietly, but “really got things done.” He helped build a playground and park in the Cambridge Estates area, even though he and his wife had no children. Although Curseen lived in Clinton, Maryland, he grew up in Southeast D.C., where Our Lady of Perpetual Help Roman Catholic Church was his childhood parish and school. Curseen’s wife, Celestine Willingham Curseen, to whom he was married for 16 years, described her late husband as a generous, kind, hard-working man who will be greatly missed.
Thomas Morris, Jr. also grew up in the District of Columbia, although he and his family moved to Suitland, Maryland. Before joining the USPS, Morris served in the United States Air Force. Morris joined the USPC in 1973 and worked as a distribution clerk. He was a hard worker who had no aversion to working overtime, a proud husband and father of one son and two stepchildren, as well as the president of a bowling league team. To his neighbors, Morris was a quiet, thoughtful, deeply religious and humble man, who dispensed helpful, and often paternal, advice to his younger neighbors. His wife, Mary, described him as true to others and to himself, as someone who was respectful and law-abiding.
Please join me in honoring the lives of these two men, who died serving their country, and in requesting a commemorative stamp in their memory.
I urge my colleagues to support this resolution.
PCMA: Altering Mail Delivery Schedule Could Negatively Impact Consumers Relying on Home Delivery of Prescription Drugs
WASHINGTON -A United States Postal Service (USPS) proposal that would reduce delivery of mail to five days could negatively impact the millions of Americans with chronic conditions who rely on the convenience and value provided by mail-service pharmacies, the Pharmaceutical Care Management Association (PCMA) said in letters sent to U.S. House Committee on Oversight and Government Reform Chairman Edolphus Towns (D-NY) and U.S. Senate Committee on Homeland Security and Government Affairs Chairman Joseph Lieberman (I-CT)
“About 1-in-6 prescriptions that are home delivered arrive on Saturday. Consumers count on getting their prescriptions at the right time and often can’t wait an additional two days, or even three days in the case of federal holidays that fall on a Monday,” said PCMA President and CEO Mark Merritt.
Government and independent studies have examined the increased savings, safety, and adherence provided by mail-service pharmacies. That research includes:
- Federal Trade Commission (FTC). The FTC found that mail-order pharmacies provide more savings than retail pharmacies.
- Pharmacotherapy: Official Journal of the American College of Clinical Pharmacy. Peer reviewed data found that highly automated mail-service pharmacies dispensed prescriptions with 23-times greater accuracy than retail pharmacies. The mail-service error rate was zero in several of the most critical areas, including dispensing the correct drug, dosage, and dosage form.
- Harvard University. Independent, peer-reviewed research conducted by Harvard University and published in 2004 by Health Affairs, analyzed some 670 million prescription drug claims and concluded that generic drug substitution rates at PBM mail-service pharmacies were slightly higher than at retail pharmacies.
- American Journal of Managed Care. Consumers receiving their prescription medications for chronic conditions through a mail-service pharmacy “were more likely to take them as prescribed by their doctors than did patients who obtained them from a local pharmacy,” according to the study. The study also found that 84.7 percent of patients who received their medications by mail at least two-thirds of the time stuck to their physician-prescribed regimen versus 76.9 percent who picked up their medications at “brick and mortar” Kaiser Permanente pharmacies.
PCMA represents the nation’s pharmacy benefit managers (PBMs), which improve affordability and quality of care through the use of electronic prescribing (e-prescribing), generic alternatives, mail-service pharmacies, and other innovative tools for 210-plus million Americans.
Testimony of PRC Chairman Ruth Y. Goldway
Testimony of Chairman Ruth Y. Goldway, Postal Regulatory Commission
Before the U.S. House of Representatives Committee on Oversight and Government Reform and the Subcommittee on Federal Workforce, Postal Service and the District of Columbia
April 15, 2010
Chairman Towns, Chairman Lynch, Ranking Members Issa and Chaffetz and members of the Committee and Subcommittee, thank you for the opportunity to testify to this joint hearing.
Before addressing the questions you put to the Commission, I must reiterate to the public that no decision has yet been made to reduce service to five days. I am afraid the public has been confused by the Postal Service’s recent announcements. We need to reassure them that this important matter requires the consideration of both the Commission and the Congress.
POSTAL SERVICE PLAN FOR THE FUTURE
On March 2 of this year, the Postal Service presented to the Nation its vision for the future of our mail system that I find very troubling. In a litany of problems and worst case scenarios, it estimates that there will be cumulative financial losses of $238 billion by the year 2020 if no changes are made.
What is the Postal Service’s response to these potential losses? In two words, it is: reduce service. Its plan promises fewer employees to serve the public, fewer processing plants and postal operated retail facilities, and reduced mail collections and fewer collection boxes – more than 24 thousand collection boxes were removed from American neighborhoods just in the past year. In addition, the Postal Service plan eliminates Saturday mail delivery service, which heretofore has been considered a competitive advantage for the Postal Service.
The basic outcome of all these ideas is that there may well be less mail and less Postal Service and that those who rely exclusively on the mail, the elderly, the poor, rural America and those who cannot or will not connect to the internet may suffer the most.
Even more troubling, its plan stops at the year 2020. There is nothing in the plan to indicate how forecasted mail declines will be arrested in the following decade. On the contrary, the plan’s proposals seem likely to spur further declines, a downward trajectory that suggests further shrinkage of the system, with mail and this fundamental communication infrastructure disappearing in tandem.
POWER OF THE MAIL
I do not believe that this vision is the inevitable future of the Postal Service. I believe in the Constitution of the United States and Title 39’s mandate to provide a postal system that binds the Nation together. Even in the Internet Age, mail has a unique power to touch readers and deliver results for senders. It can drive sales, touch emotions, deliver votes, and shape important personal decisions that affect life and country.
I also believe that able managers and visionary leaders can navigate the current troubled waters to create growth and find new revenue while also controlling costs. I believe that America’s mail system can be reinvented, reengineered and reenergized for a new century of customers. In the Postal Service plan regrettably, there is no growth, no rejuvenation and little innovation.
If the last few years have taught us anything, they have shown how unpredictable the future can be. In my 12 years on the Commission, I can recall times when the Postal Service predicted billion dollar losses and ended the year with billion dollar gains.
Even this year, it looks like the Postal Service might significantly exceed its own expectations. The latest financial report received by the Commission reveals that through the end of February it is nearly $1.2 billion dollars ahead of its forecast. Although mail volume is down by 8 percent, Standard Mail volume grew slightly for the month and Shipping Services are up 1.3 percent for the year. Both of these products are sensitive to changes in economic conditions. It may be that the economy is starting to have a tonic effect on the mail.
Seeing this kind of variability in only six months, suggests that it may be prudent to view projections that lie six years or more down the road with some caution.
A BETTER APPROACH TO THE FUTURE
The Commission commends the Postal Service for its sustained effort over many years to increase productivity, improve processes and lower its costs. We appreciate that this effort must continue and evolve for the future. Today’s discussions, however, must not simply focus on costs and deficits. The Postal Service should reposition its goals to meet the needs of an evolving society.
Rather than beginning with the premise that the Postal Service needs to be cut in size and scope to solve the deficit projections, these fundamental questions must first be addressed. What does the Constitution and the law require? What is best for the Nation? How can the Postal Service maintain and improve its universal service obligation and deliver that to citizens and the business community who rely on the mail? These are questions that the Postal Accountability and Enhancement Act requires the Commission to ask.
Both GAO and the Postal Service offer recommendations without this context. An axiom in the business community is that a company cannot cut its way to success. It has to have a real plan. The consensus among the mailers I have spoken with is that there is very little that is new in these two reports.
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The consultants hired by the Postal Service, and GAO analysts, should have begun by looking at what it will take to keep open as many post offices, and station and branches as possible; what new products the public needs that the Postal Service is uniquely positioned to provide; how to keep delivery at 6 days, the level required by Congress; and how to determine the service levels that are the most advantageous to its future success.
The consultants and analysts should have reviewed the Postal Service’s recent attempts at innovation. In this decade, the Postal Service embarked on two projects that it described as transformative: the Intelligent Mail Barcode (IMb) and the Flat Sequencing System (FSS).
The Postal Service promised that the IMb would revolutionize the transparency and efficiency of letter mail for the Postal Service and its customers, creating new value in the mail and opportunities for growth. The Commission believed the Postal Service and agreed to use the IMb as the basis for a measurement system to track service quality. Yet, we and the mailing community continue to wait for that promise to be realized.
Similarly, FSS promised to transform the processing of flats and catalogs so that they could be sorted automatically into walk sequence, at lower costs and with higher quality. Both the IMb and the FSS are well‐behind scheduled implementation. Does the Postal Service think these projects are not as promising as originally envisioned? What can be done to speed up their introduction and acceptance system‐wide? Perhaps, the regulator has been too lax. Answers to these questions would better inform future plans.
Why hasn’t a detailed, innovative new retail strategy been explored that will, at a minimum, improve the revenues of post offices to the point that their continuance is economically as well as socially justified. I agree that Postal Service efforts to build its website and expand customer access through internet use and sales of stamps at supermarkets are commendable. But ask the small towns of America if they think government business should be conducted in Walmarts. Why would any rational person compare the functions of a Post Office to Walmart as the Postal Service consultants did? Envisioning the future calls for a transformative process not a capitulation to big box retailing.
IDEAS FOR POSITIVE CHANGE
If I had been tasked with developing the 10‐year plan, here are some of the ideas I would have proposed for the Postal Service to accomplish by 2020:
1.Develop mail products based on value to the customer not necessarily on volume. This is the fundamental tenet needed to fix the Postal Service’s broken business model.
2.Convert the bulk of its vehicle fleet to run on electricity reducing annual fuel and maintenance expenses by more than $400 million per year and increasing America’s independence from foreign oil.
3.Have a range of products that are fully trackable and traceable and comparable with those of private package companies.
4.Provide a one‐stop shop for government services. Not just passports but national park passes, regional EZ passes, identity cards, etc.
5.Participate as a full partner in the nation’s 2020 census, thereby saving the country hundreds of millions.
6.Building on the money order services now offered, introduce and implement a system to provide assistance to the unbanked, replacing usurious “pay day” operations with reliable fair service.
7.Commit to having a network of post offices in key locations that are open more hours than in 2010 and even on Sundays and guarantee at least one 24‐7 post office in every big city.
8.Implement a comprehensive Vote‐by‐Mail system that suits the needs of all the states in the union for federal, state and local elections held at any and all times of the year.
9.Reinvent the letter carrier: Empower him/her to measure real‐time service: to be accessible to the community by email; to be the eyes and ears of the community; and to be the sales and service point for small businesses.
10.Reorganize the workforce ‐ not to make them part time employees ‐ but to enhance their skills thereby adding flexibility in the processing centers, new energy conservation technology to logistics and motivated outgoing sales people at retail counters.
11.Commit to having ten other ideas in place and operating within the decade.
Commission staff is also up for the challenge. They are exploring ideas such as auctioning potential discounts for postage rates to get a real measure of market demand; adjusting pricing in First‐Class and Standard Mail to improve Postal Service margins and encourage mailer efficiencies; and offering postal vehicles as platforms for sensors that generate revenue from other government agencies or businesses to automatically measure pollution, collect weather data, identify chemical spills, identify cell phone/wireless dead spots, spot natural gas leaks and map potholes.
Just as limiting access and declines in service create a self‐fulfilling prophecy, improvements which may seem small can create the incremental reinvigoration that begets real growth.
CURRENT CRISIS
Nevertheless, I am not a Pollyanna. What seems beyond dispute at the moment is that the Postal Service is facing serious financial difficulties this year and next year.
The Postal Service ends its fiscal year on September 30. At that time, they must pay $5.5 billion into a fund for future retiree health benefits. Shortly after that, it will need to make sizeable payments for workers compensation obligations and to meet payroll. These large obligations, falling so close together, could cause the Postal Service to run out of cash. This is similar to the situation it faced last year when Congress provided $4 billion in relief.
My colleagues and I believe that the scheduled payments to fund future retiree health benefits should be readjusted, which would provide the Postal Service with further time to recover from the recession. However I think that the relief should be part of a larger strategy that is both financially and operationally transformative.
RETIREE HEALTH BENEFIT FUNDING
Last May, Chairman Lynch asked the Commission to look at OPM’s computation of the Retiree Health Benefits Fund (RHBF) liability. Based on changes in how to calculate long‐term medical inflation rates and the declining postal workforce, we found that a recalculation could greatly reduce the Postal Service’s liability and lower the required annual payments while meeting the original funding goals of the law.
The current payment schedule has proven to be too ambitious and should be adjusted in some fashion.
Over the past three years, the Postal Service has paid $15.4 billion to Treasury to prefund future retiree health benefits. During that same time, the Postal Service borrowed more than $8 billion from Treasury so that it could make those payments. This arrangement does not protect the Federal government in the event of a Postal Service default. And it burdens the Postal Service with increasing debt service costs, which could exceed $150 million this year. Borrowing by the Postal Service to make the payments does not make sense. On the other hand, borrowing for investment in operational innovations is absolutely necessary.
The RHBF payment schedule must to be revised so the Postal Service can make smaller payments over a longer period of time and/or so that yearly payments are tied to the Postal Service’s ability to pay in a given year.
PENSION LIABILITY
Currently, the Civil Service Retirement System pensions are considered fully funded, but a review by the Postal Service Inspector General determined that the Postal Service has been overcharged by $75 billion, related to the service of Post Office Department employees who continued to be employed by the Postal Service after Postal Reorganization in 1971.
Under provisions of the Postal Accountability and Enhancement Act, the Commission is in the process of hiring an actuary, at the Postal Service’s request, to review OPM’s calculation of the Postal Service pension liability. If any pension surplus is identified through this process, it could be used to lower Postal Service liability and payments for future retiree health benefits. We expect to issue our report this summer.
FIVE‐DAY DELIVERY DECISION
Until these overriding retiree funding issues are resolved by Congress, the advisability of enacting major reductions in mail service is questionable. The PAEA requires the Commission to monitor service levels to prevent deterioration in service and assure that the Postal Service meets its Universal Service Obligation (USO). Five‐day service may meet the USO. It does in other nations. However, is six‐day service a strategic marketing advantage for the Postal Service even if it is not part of the USO? Perhaps a pilot project in a limited geographic area or for one month of the year would be instructive. The implications of reducing service are unknown and must be carefully considered.
Last month, the Commission began a proceeding to evaluate the Postal Service plan for eliminating Saturday mail delivery service. In addition to on‐the‐record hearings at the Commission, we will hold a half‐dozen regional hearings across the Nation and we are soliciting the input of the American people in other ways as well. Already we have received more than 1,500 comments via our web site and through the mail. This is a vital issue for all who depend on the universal mail system.
We will build a comprehensive record on the proposal that fully and accurately reflects the viewpoints of all stakeholders and citizens and carefully evaluates potential cost savings, volume declines and alternatives. We hope to issue our Advisory Opinion in six to nine months.
The Commission’s findings and the public record we develop will be readily available to members and your staffs as you consider whether to alter current legislation requiring six day delivery.
TIMING CHANGES
I understand the pressures that the Postal Service is under. And I appreciate the hard work and dedication both management and employees have shown in making changes that reduce costs without too much sacrifice in service ‐ so far. However, I am disappointed that the 10‐year plan and the newly issued GAO report are not effective plans for the future. Rather, by concentrating on cuts at the expense of service and innovation, they offer the path to obsolescence.
Now is not the time for sweeping changes to the Postal Service. Before the Congress agrees to major cuts in service, it should resolve the pension and retiree health benefit issues to determine manageable payment schedules for the Postal Service, and the Commission should be allowed to complete its analysis of the five‐day delivery proposal and present it to you.
Time will also provide breathing room for hard‐pressed Postal customers and the economy. If history is a guide, as the economy rises it will carry the mail with it. I believe it is possible to create a positive plan that really does envision the future, a future with a vibrant communications network providing universal service and meeting changing citizen and customer needs and demands.
Thank you, that concludes my testimony.