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February 4, 2004

Senator Collins Holds Hearing on Postal Reform

Senator Takes Comprehensive Look at the Issue Before Introducing Legislation

WASHINGTON, DC – Senate Governmental Affairs Committee Chairman Susan Collins today held the third in a series of hearings on U.S. Postal Service reform as part of her effort to take a comprehensive look at the issues prior to introducing bipartisan reform legislation.

“So much depends upon the Postal Service’s continued viability,” said Senator Collins in her opening statement. “The Postal Service itself has more than 730,000 career employees. Less well known is the fact that it is also the linchpin of a $900 billion mailing industry that employs nine million Americans in fields as diverse as direct mailing, printing, catalog production, and paper manufacturing. The health of the Postal Service is essential to thousands of companies and the millions that they employ.

“One of the greatest challenges for the Postal Service is the decrease in mail volume as business communications, bills and payments move more and more to the Internet. The Postal Service has faced declining volumes of First Class mail for the past four years. This is highly significant, given that First Class mail accounts for 48 percent of total mail volume, and the revenue it generates pays for more than two thirds of the Postal Service’s institutional costs,” said Senator Collins.

Since last year, the Committee has been reviewing the Postal Service reform recommendations developed by the Presidential Commission on the Postal Service. Today’s hearing focused on the various recommendations affecting the Postal Service’s workforce, composed of more than 700,000 dedicated letter carriers, clerks, mail handlers, postmasters, and others. The hearing provided the Senator and the Committee with an opportunity to more fully explore the workforce-related recommendations of the Commission, which include some of its more controversial proposals. Among them are recommendations to reform the collective bargaining process; to give management and employee unions the authority to negotiate not only wages but also all benefits; to establish a performance-based pay system for all employees; and to authorize the new Postal Regulatory Board to develop a mechanism for ensuring that total compensation for postal employees is comparable to the private sector.

“The Postal Service faces the difficult task of trying to right-size the workforce to meet the decline in mail volume, technological competition, and other operational challenges,” said Senator Collins. “With some 47 percent of current career employees eligible for retirement by 2010, right-sizing does not, however, have to mean widespread lay-offs. And it shouldn’t. With careful management, much can be done to minimize any negative impact on employees and to create a more positive working environment.”

Senator Collins will work with Senator Tom Carper (D-DE) to introduce legislation to assist the Postal Service with its reform efforts, and noted that universal service would be an essential goal. In 2003, Senator Collins and Carper introduced legislation, now law, to adequately and fairly adjust the U.S. Postal Service payments into the Civil Service Retirement System, thereby averting postal rate increases at least until 2006 and allowing the agency to more aggressively pay down its debt to the U.S. Treasury.