House Committee Looks for Solutions for the Postal Service’s Finances

In an Apr. 30 hearing, The House Committee on Oversight & Reform (COR) examined the financial conditions of the United States Postal Service. The committee invited Postmaster General Megan Brennan, Postal Regulatory Commission (PRC) Director of the Office of Accountability and Compliance Margaret Cigno, President and CEO of Quad/Graphics Joel Quadracci, National Association of Letter Carriers President Fredric Rolando, and Cato Institute Director of Tax Policy Studies Chris Edwards to testify.

Ahead of the hearing, APWU President Mark Dimondstein submitted a statement for the record, calling for four common sense solutions. These include: repealing the prefunding mandate in full; allowing investment options for the Postal Service Retiree Health Benefits Fund to boost investment returns; expanding on new products and services; and restoring the 2013 exigency rate surcharge permanently.  

“Congress should not let another legislative session pass while the Postal Service is held back from regaining financial sustainability and fulfilling the best promises of Universal Service,” President Dimondstein commented.

In his opening statement, COR Chairman Elijah Cummings (D-MD-07) commented that while “the Postal Service is one of our most essential and recognizable institutions in the country”, its financial condition is deteriorating due to “a decline in first class mail, which has been the Postal Service’s most profitable product…the Postal Service’s expenses have been increasing more quickly than its revenues… Congress put in place requirements in 2006 the Postal Service to make billions of dollars of payments each year to pre fund retiree health benefits.” 

He concluded his opening statement by saying, “If major changes are not made soon there will come a time when the Postal Service will run out of cash and its ability to provide the services Americans rely on will be in jeopardy. Congress has a responsibility to ensure that day never comes.”  Chairman Cummings also noted later in the hearing that in moving forward on postal reform, the committee will have to address the prefunding mandate, and, creating a sustainable future for the Postal Service cannot be done on the backs of the dedicated employees.

In her opening statement to the committee, PMG Brennan commented that “absent legislative and regulatory reforms we are likely to run out of cash in 2024.”

APWU Legislative & Political Director Judy Beard, who attended the hearing, stated after, “Throughout the hearing, I was very disappointed in answers given by Postmaster General Brennan. She seemed to lack a positive direction for moving forward. She also made disturbing statements about reducing delivery days that will hurt postal workers and the people we serve. We want legislation that will improve service to the American people and protect the hard earned and deserved salaries and benefits of our workers.”

Several members of the committee brought up the President’s Postal Task Force report, which called for privatization of some elements of the Postal Service. Chris Edwards of the Cato Institute, a libertarian think tank, agreed with the report, and not only called for privatization, but also for closures of postal facilities, lowering postal salaries and benefits, and reducing postal service obligations.

The majority of the committee members, however, addressed their opposition to postal privatization and its negative effects on the Universal Service obligation. Representative Steve Lynch (D-MA-08) commented that in European countries that privatized their postal services, rates increased by 30-40 percent. Representatives Carol Miller (R-WV-03) and James Comer (R-KY-01) both addressed the need for service in the rural districts they represent and expressed concern that the Postal Service needs to ensure delivery standards for every American, regardless of where they live.

The most positive aspect was Chairman Cummings’s promise of a hearing in the near future on Postal Safety issues. Representative Debbie Wasserman-Schultz raised the question of whether new and improved safety procedures have been put into place after last year’s dangerous pipe-bomb mailings, which impacted her office directly. Chairman Cummings added his concern over the dangerous possible exposure employees face as a result of the ongoing opioid and fentanyl crisis. APWU will follow up Congress on this issue, and we appreciate that Congress is addressing it.

During the hearing, it was announced that new legislation was introduced on Apr. 29. H.R. 2382, the USPS Fairness Act, sponsored by Representatives Peter DeFazio (D-OR-04) and Tom Reed (R-NY-23), calls for a full repeal of the prefunding mandate. APWU fully supports this legislation, and asks our members to contact their representatives and ask them to cosponsor this vital bill.