Government affairs

On May 11, NALC President Fredric Rolando testified before a House Committee on Oversight and Government Reform hearing titled, “Reforming the Postal Service: Finding a Viable Solution.” During the hearing, Rolando discussed the importance of taking up consensus reform that has been promoted by the postal unions, select mailers, the Postal Service and other stakeholders.

Rolando also urged the committee to consider a narrow set of provisions upon which most stakeholders agree as a way of bringing greater financial stability to the Postal Service, including:

• mandating the use of postal-specific assumptions in postal pension valuations;
• resolving the pre-funding burden by reforming the Federal Employees Health Benefits Program (FEHBP) to maximize postal emplyees’ Medicare participation;
• Sensibly investing the Retiree Health Benefit Fund;
• Permitting the USPS to provide non-postal products; and
• Adjusting the market-dominant rate base to ensure adequate postal revenue—through the PRC review period, if necessary.

“There is a remarkable degree of stakeholder consensus about the principles of successful postal reform,” Rolando said. “All four postal unions, the Postal Service, and a wide range of companies and postal trade associations have agreed on reform principles for your consideration.

Throughout the hearing, several members of Congress raised concerns over additional cuts to service and delivery standards by the Postal Service in the absence of eliminating the pre-funding mandate that was put into place as a result of the Postal Accountability and Enforcement Act of 2006.

“I believe that any postal reform legislation that this committee considers should do the following,” Ranking Member Elijah Cummings (D-MD) said: “alleviate the burden of pre-funding retiree health benefits, allow the Postal Service to have separate postal-only health plans that integrate fully with Medicare, allow the Postal Service to offer non-postal financial services…and require the Postal Service to create a new chief innovation officer charged with developing new, innovative products as any other business.

“I want to make sure it’s clear, we’re not talking about five day delivery,” Rep. Mark Meadows (R-NC) said. “I don’t want that to be the headline that comes out of this hearing.”

“[R]aising rates and cutting services is not the way we’re going to necessarily get there,” Committee Chairman Jason Chaffetz (R-UT) said.

The hearing also consisted of four other witnesses, including Postmaster General Megan Brennan, Acting Postal Regulatory Commission Chairman Robert Taub, General Accountability Office Director of Physical Infrastructure Issues Lori Rectanus and Association for Postal Commerce Executive Vice President Jessica Lowrance.

NALC anticipates postal reform legislation in the House to be drafted and released soon.

• President Rolando’s testimony
• The legacy of the PAEA-USPS finances since 2006
• Selected federal and state fund allocations and returns (Lazard)
• Alternative price cap indicies
• Principles for targeted legislation to stabilize finances of the United States Postal Service
• Supporting organizations' statement for hearing