The Postal Service has lost more than $13 billion during the past two years, and with daily losses of $25 million, USPS will have maxed out its credit limit of $15 billion by the end of the year. Despite the fact that Congress has forgiven or reduced the Postal Service's payments for future retiree health benefits multiple times, USPS has still reported billions of dollars in deficits, clearly indicating that its fiscal woes would exist even without this requirement.
Nearly 80 percent of the Postal Service's costs are workforce-related, and so as painful as it may be, finding a compassionate way to reduce these costs is simply unavoidable. In doing so, however, it will be critical to try and preserve the service on which many mailers depend. The last thing the Postal Service needs is to drive more customers out of the mail, causing revenues to decline further, and only ensuring that the financial free fall continues.
The main reason for the Postal Service's crisis is simply a changing world, where more and more communication is online rather than via traditional mail. First-class mail volume has fallen by 26 percent over the past six years and continues to decline. Reflecting that sharp drop in volume, the Postal Service's revenue has also plummeted from $72.8 billion in 2006 to $65.7 billion in 2011.
Quite simply, we need to help put the Postal Service back on solid financial footing, not only to help protect the nearly 38,000 Mainers who work in jobs related to mailing industry, but also so that taxpayers are not left holding the bag.
More than three months ago, the U.S. Senate passed a bipartisan bill that I co-authored along with Senators Joe Lieberman (I/D-CT), Tom Carper (D-DE) and Scott Brown (R-MA). Our bill would restructure the Postal Service's retiree health payments in a responsible way that eases the immediate burden, but not the Postal Service's obligation to fund those benefits. This would ensure that the USPS's promise to its current and future retirees is kept. The Senate-passed bill would give the Postmaster General tools to compassionately downsize the postal workforce by about 18 percent in the form of buyouts and early retirement incentives, bringing workforce costs more in line with USPS competitors like FedEx and UPS. This would save an estimated $8 billion every year.
Our bill encourages the Postal Service to operate more like a business: by cutting internal costs first instead of driving away customers with deep service cuts or steep price hikes. It would prevent the Postal Service from immediately eliminating Saturday delivery as it has requested. Instead, it would embark on a two-year period of aggressive cost-cutting first, and then only allow this reduction in service if the Government Accountability Office and postal regulators both certify that elimination of Saturday delivery is necessary to achieve solvency.
The bill would also rationalize what has been an erratic and draconian closure plan for thousands of rural post offices. While some post offices can and should be closed, curbing access for customers could well jeopardize revenue. Therefore, our bill would set up a new process that would involve the consideration of alternatives to closure, such as reducing hours, co-locating a post office at a nearby pharmacy, or renting out excess space to other government agencies. Perhaps most important, the process includes the requirement for the views of the affected community to be heard and responded to prior to any final decision.
I wrote a key provision that would result in the continued operation of the Eastern Maine Processing and Distribution Facility in Hampden, and several other important facilities, by preserving overnight delivery standards in certain areas. In Maine, reliable overnight delivery service would be impossible without both the Eastern Maine facility in Hampden and the Southern Maine plant in Scarborough. The Hampden plant could not be closed, as the Postal Service has recommended, as long as these standards are followed voluntarily by the USPS or become law.
Our bill is garnering praise from many in the mailing and mail-related industry who depend on reliable mail service. The National Newspaper Association says the bill "represents a new commitment by our nation's leaders to maintaining universal service while undertaking much needed repairs on our nation's postal system." The National Association of Postmasters of the U.S. says our bill would "help relieve some of the challenges confronting the Postal Service, while still maintaining universal access." The Coalition for a 21st Century Postal Service says "this bill is a vital first step in pulling the Postal Service back from the edge of a fiscal abyss."
The Senate has passed a bipartisan postal reform bill to preserve the Postal Service and the critical economic activity it supports. Now, the House must act. Then, the House and Senate must come together and work out our differences. No doubt more compromises will be required along the way, but it is critical that we get a bill to the President for his signature as soon as possible. Americans count on reliable, affordable, and universal mail service. A healthy Postal Service is not just important to postal customers, but also to our national economy.