NAPS Leg/Reg Update – March 24, 2012

It’s Show Time in the Senate for Postal Reform

Postal reform is coming to the Senate floor this week, beginning Monday.

The Senate is trying to complete action on a comprehensive postal bill before May 15, when a moratorium on closing postal facilities is set to expire. Although both houses of Congress are not expected to reach agreement on a final postal bill before May 15, Senate passage may be enough to prompt the Postmaster General to extend the moratorium.

When postal legislation reaches the Senate floor this week, a modified version of S. 1789 will serve as the basic bill, with a number of postal and non-postal amendments likely to be offered by Republicans and Democrats. S. 1789, the 21st Century Postal Service Act, is bipartisan legislation authored by the chairs and ranking minority members of the postal oversight panel and subpanel: Sen. Joe Lieberman (I-CT), Sen. Tom Carper (D-DE), Sen. Susan Collins (R-ME) and Sen. Scott Brown (R-MA). The legislation reduces the Postal Service’s retiree health prefunding payments, returns surplus FERS contributions to USPS, provides retirement incentives to eligible workers, and requires the Postal Service to consider options to downsize mail processing facilities without closing them.

Senate staff indicated late Friday that the bill has been strengthened in several ways to respond to concerns raised by Sen. Bernie Sanders (D-VT) and two dozen Democratic Senators about the original version of the bill and Post Office cost-reduction plans. Those concerns involve the retention of overnight delivery standards for first-class mail, preserving rural post offices, and the creation of new revenue for the Postal Service.

Here’s what to expect this week: Senate Majority Leader Reid is expected to call a cloture vote late Monday afternoon to initiate floor action on postal business. Cloture is a parliamentary move to end debate and quash holds by individual Senators aimed at preventing the bill from being brought to the floor. Sixty votes are required to secure cloture, and Reid is expected to meet that test. Once cloture is achieved, Senate floor debate on postal reform will begin, likely on Tuesday morning. Debate and votes on amendments to the postal bill are expected to last during much of the week. Senate leaders will push to complete action on the postal bill before the start of the two-week Senate and House recess.

House Action on Postal Reform Also Revs Up

House leaders appear to be only a step behind the Senate in addressing the Postal Service’s troubled finances. Preparatory action to bring postal legislation to the House floor will begin this week as well, with the House Rules Committee slated to meet late Monday afternoon to craft the procedures governing House floor action on the postal reform measure, H.R. 2309. House floor action on that bill could occur later in April, after the House returns from its two-week break.

The House bill is a dramatically different measure from the Senate bill, establishing two commissions that could rapidly close large numbers of post offices and processing plants, create significant service reductions and impose massive job cuts. These politically unpopular moves are not expected remain part of any House-passed measure that emerges.

As a prelude to House floor action, the House postal oversight subcommittee has scheduled a hearing this Tuesday, March 27, on “Can a USPS-Run Health Plan Solve Its Financial Crisis?” The Postal Service has proposed establishing a separate health plan outside of FEHBP that would save $7B per year. The health plan is part of a broad five-year business plan released by the Postal Service last month, called the “Plan to Profitability.” Postmaster General Patrick Donohoe, along withFEBHP expert Walton Francis are expected to testify at Tuesday’s House hearing.

Senators Take Aim at the Postal Service

The ramp-up to Senate floor action was punctuated by a series of actions and statements by a handful of different Senators last week, laying down markers on possible floor amendments, and reflecting opposition over the Postal Service’s cost-cutting plans, as well as home-state and election-year politics.

* Sen. Barbara Mikulski (D-MD) announced on Thursday that she would attempt to block Senate action on the postal bill by placing a procedural hold on its consideration. Mikulski’s hold was triggered by her concerns over USPS plans to close a postal processing facility in Easton, Maryland, and consolidate its operations with a facility in Delaware. Delaware is the home state of Sen. Tom Carper (D-DE), one of the chief authors of the Senate postal bill. (Majority Leader Reid’s expected cloture vote on the postal legislation on Monday, if successful, will trump any holds placed by individual Senators.)

* Sen. Susan Collins (R-ME), another architect of the Senate postal bill, in a floor speech on Tuesday, blasted the Postal Service and questioned whether the Postal Service’s cost-cutting and facility closure plans are going too far and will actually drive the Postal Service deeper into debt.

* Sen. Collins also joined with Rep. Gerry Connolly (D-VA) this week inrevealing a secret Postal Service market research study that projected that the Service would suffer a catastrophic financial blowback as a result of the first year of facility cuts, with $5.2 billion in lost revenue, 9.1 percent reduction in first-class mail volume, and a 7.7 percent reduction in all classes of mail. The projections underscore concerns on Capitol Hill about the wisdom of the Postal Service’s service and cost reduction efforts. Last week, the Postal Service was still attempting to backpedal from the study projections, calling the study’s survey methods “seriously flawed.”

* Seven Senate Democrats wrote to Postmaster General Patrick R. Donahoe, identifying billions of dollars in potential cost-savings and opportunities that could increase revenue, such as adequately pricing products that consistently lose money, leasing unused commercial space, limiting executive bonuses, and maximizing the Postal Service’s market share in growing markets like Internet sales. The letter from the seven Senators also identified the need to preserve timely delivery of mail, post offices, and mail processing centers, and expresses concerns about proposals from the Postal Service to create a new health plan outside the FEHBP and void layoff protections in existing contracts. The Senators writing the letter were Sen. Jay Rockefeller (D-WV), Joe Manchin (D-WV), Jon Tester (D-MT), Max Baucus (D-MT), Jeff Merkley (D-OR), Ron Wyden (D-OR) and Kirsten Gillibrand (D-NY).

Bruce Moyer
Legislative Counsel to NAPS