Putting the Postal Service on the Right Path to Reform
If the U.S. Postal Service is not restructured or reformed soon, not only will taxpayers be forced to pay for another expensive bailout but tens of thousands of private sector jobs and a vital part of our economy will be put at risk. Congress needs to pass bold reforms that will allow the Postal Service to maintain solvency in the short-term, and reorganize itself into a modern and profitable business in the long-term.
In the Short-Term, Restore Fairness to the USPS Retiree Obligations.
It has been confirmed by the U.S. Postal Service’s Inspector General as well as an independent actuary that the USPS has now overpaid into the Civil Service Retirement System by a total of at least $50 billion. This money should be transferred into the USPS Retiree Health Benefit Fund.
The Postal Service has also been required to make $6.9 billion in overpayments to the Federal Employees Retirement System. This money should be returned to the USPS.
Few public, and virtually no private, sector entities pre-fund retiree health benefits. Yet the USPS Retiree Health Benefit Fund contains $43 billion, enough to provide health insurance for all current USPS retirees for life. Nonetheless, USPS is forced to add billions of dollars in new funding every year. Congress should restructure this annual payment, and decrease this unnecessary burden on the Postal Service.
In the Long-Term, Create a Modern, More Efficient Postal Service
Restructuring and Streamlining. The USPS needs the freedom to adjust its infrastructure based on its needs. Congress must not inhibit the closing of underutilized facilities, or prevent the streamlining that will allow the Postal Service to match the needs of projected volumes.
Innovate and Make Greater Use of Technology. The Coalition strongly supports the recent expanded use of technology and innovation by the Postal Service. For example, the “flat rate” box (“if it fits, it ships”), various “Sales”, and a barcode for instantly connecting mailpieces and websites via smartphones. It should do more of the same, and be given even more flexibility to innovate.
Reductions in Personnel Costs. Personnel costs remain stubbornly static at roughly 80 percent of USPS expenses. No realistic deficit discussion can avoid the prospect of tough choices in these costs. Through attrition and buy-outs, workhours have been reduced on an unprecedented scale, but that has not been enough to match the devastating declines in volume. It is vital that workforce costs fully reflect changes wrought by the massive decline in its business.
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