Preserving the U.S. Postal Service for the 21st Century
By Senator Susan Collins
On January 8th, Americans saw the cost of the first-class postage stamp increase by two cents, to 39 cents. While two cents may not seem that significant one letter at a time, this increase will cost postal customers billions of dollars over the next several years, and nowhere will this increase be felt more than by the nine million Americans whose jobs and businesses rely on the United States Postal Service.
Over the past few years, however, the Postal Service has been plagued by serious financial and operational problems that threaten its long-term viability. At present, the Postal Service’s liabilities are enormous–to the tune of nearly $7 billion for Workers’ Compensation claims, $5 billion for retirement costs, and as much as $45 billion to cover retiree health care costs.
The Postal Service is also grappling with declining volumes of first-class mail as business communications, bills and payments have been moving more and more to the Internet. The Postal Service has faced declining volumes of first-class mail for the past four years, matters because 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. That volume decline causes the Postal Service to seek rate increases, which, in turn, causes further declines in volume as mailers seek alternatives. The Government Accountability Office warns that this could lead to a “death spiral” for this vital institution.
The Postal Service also faces the difficult task of trying to cut costs from its nationwide infrastructure and transportation network. These costs are difficult to cut. Even though volumes may be decreasing, carriers must still deliver six days a week to more than 139 million addresses nationwide.
Fortunately, the U.S. Senate has taken an important step toward strengthening the financial future of the Postal Service by approving the “Postal Accountability and Enhancement Act.” I was joined by my colleague, Senator Thomas Carper (D-DE), in authoring this bipartisan legislation, which makes the most sweeping reforms to the Postal Service in more than 30 years. Our bill modernizes the rate-setting process to provide more predictability and helps ensure a stronger financial future for the organization. Open Comments
source:Magic City Morning Star