What Act Of Congress Improved Mail Service

Congresswoman Alma South. Adams, Ph.D. and Gordon E. Holzberg

I. INTRODUCTION

The The states Mail service ("USPS") — outset established as the United States Post Office with the Post Role Act of 1792 — has long served the American people. Equally of 2020, the Postal Service employs over 600,000 people,¹ operates over 31,000 retail locations,² and handles 48% of the world'southward daily mail flow.³

With the help of Congress, the Mail service has evolved over the generations to adapt to the pressures at hand. In the late 1960s, those pressures—which included failing revenue, increasing operating expenses, and employee dissatisfaction^four —facilitated the evolution of the U.S. Postal service Office Department into the U.Southward. Mail, the agency that currently provides mail in the Usa.^v In the early 2000s, the pressures centered on failing post book.⁶ Now, USPS faces yet another crisis, in addition to the declining book of letters and flat postal service⁷ : the massive sums owed by the Postal Service to its retirees.^viii Fortunately, all the same, Congress has both the power and the prerogative to place and enact solutions to these bug.

The first department of this essay will explore the reformation of the Post Office into the Mail. The next will examine legislation passed in 2006 that impacted the Post's current dismal fiscal condition. The final section will lay out a comprehensive vision of the postal reforms needed to ensure the long-term health of this vital institution.

2. THE POSTAL REORGANIZATION ACT OF 1970

The reorganization of the Post Office into the Postal Service has its genesis in the mail-World State of war 2 economic boom.⁹ Mail service volume more than doubled from 27.seven billion pieces per twelvemonth in 1940 to 84.8 billion pieces past 1970.¹⁰ Though acquirement rose as a result of the growing mail book, it did not rise fast enough to run across growing outlays.^eleven At that time, Congress directly oversaw the Post Role Section through the Post Function and Ceremonious Service Committees of the Firm and Senate; they repeatedly refused to raise postage rates to generate needed acquirement.¹² Every bit a outcome of Congress's failure to pursue unpopular merely necessary rate increases, get-go in 1946 until its reorganization in 1970, the Post Role reported an almanac arrears that exceeded $ane billion in total.¹³

Nether the strain of flagging acquirement, burgeoning post volume, and aging infrastructure,¹⁴ the national mail system began to exhibit signs of stress. Following a "political catastrophe" at the 1966 Chicago Postal service Office, which experienced a excess of 10 meg pieces of mail,¹⁵ and subsequent hearings by the powerful Firm Appropriations Commission, President Lyndon B. Johnson created the President's Commission on Postal Organization to investigate and make recommendations concerning the future of the Post Office.¹⁶ The Commission would have its name after its chair—Frederick Kappel, the chairman of AT&T.¹⁷

The Committee's report, entitled "Towards Postal Excellence: The Study of the President's Commission on Postal Organization," was released in June 1968 and made five major recommendations to Congress.^xviii Chiefly, the Commission recommended that "a Postal Corporation owned entirely by the Federal Government be chartered past Congress to operate the postal service of the Us on a self-supporting basis."¹⁹ The seeds of the Postal Service had been planted.

Simultaneously, some other crisis reached its boiling point. To properly manage the growing mail volume, the Post Office hired more workers: the number of Post Office employees grew from 408,987 in 1960 to 548,572 in 1970.²⁰ Inflation likewise rose twelvemonth-over-twelvemonth during the 1960s, budgeted 5 percent annually by 1970.²¹ Moreover, although President John F. Kennedy's Executive Guild 10988 had given federal employees the right to collectively deal,²² the wages of postal workers could merely be raised by Congress, and were brackish every bit a consequence.²³ Wages for postal workers were so low, it was not unheard of for postal workers to exist eligible for food stamps.²⁴

Spurned past Congress and the Nixon Administration and crushed past inflation, postal workers took activity. Without the approving of national union leaders, local marriage capacity in New York City voted to strike on March 18, 1970.²⁵ The mutiny Postal Strike of 1970—one of the largest strikes in American History—brought New York City to its knees; in an era earlier the internet or digital communication, almost all business was handled by mail, and major cyberbanking and financial institutions footing to a halt.

The crisis, though not entirely of Congress's making, demanded a legislative solution that had been long delayed. By August 1970, the Senate passed the final version of H.R. 17070, the Postal Reorganization Act.²⁶ The legislation was signed by President Nixon on August 12 of that year, and the U.S. Mail Office Department was officially reorganized into the U.S. Mail service.²⁷ From and so on, the Post would fund itself primarily through postage and services rendered.²⁸

Additionally, the postal workers so long overlooked by Congress and Autonomous and Republican presidents had proven their point: essential workers deserved competitive pay. Ultimately, the workers secured a six percent raise, with an additional eight percent to come following the reorganization of the Mail service Office Department.²⁹ They also earned, crucially, the correct to collectively deal for their wages.^xxx

With its newfound independence, the Post had greater flexibility than ever before to control its fate. A new Postal Rate Commission was established to set service rates; unions could collectively deal on wages for their members; and the pay of USPS employees became competitive.³¹ Independence, though, came with a price, and it would not be long before an evolving economy would require Congress to revisit the federal authorities's relationship with the Postal service.

Three. POSTAL ACCOUNTABILITY AND ENHANCEMENT Act OF 2006

Though USPS had managed itself successfully since its reorganization in 1970, past the early 2000s the subject of postal reform had once more returned to the halls of Congress. First, first-class post—the mainstay of the Mail service'southward revenue—had peaked in 2001 at 103.three billion pieces and slowly declined thereafter until the Slap-up Recession facilitated a farther precipitous drop.³² Second, the Mail had reached its largest-ever size in terms of mail processing facilities, locations, and employees past the turn of the century.³³ The size of the Postal Service was non and is non a bad thing; in fact, it meant more good, stable jobs for Americans in all corners of the land.³⁴ Merely it besides meant that information technology had a big number of employees to provide for. Third, the Postal Charge per unit Committee, the regulatory body established past the Postal Reorganization Deed of 1970, needed significant reform.³⁵ Raising rates on USPS services and goods was a long, fourth dimension-consuming process that prevented the Post from rapidly responding to the irresolute business concern environment in which it institute itself.³⁶

Congress first tackled these bug by passing the Postal Ceremonious Service Retirement Arrangement ("CSRS") Funding Reform Act of 2003 ("PCSRSFRA").³⁷ While a complete review of PCSRSFRA is beyond the scope of this piece, information technology is important to know that the Postal Service had been overpaying its requirements to the CSRS and recouped billions when the legislation required that the federal government transfer those funds back to the Postal service.³⁸ Additionally, the enactment of the PCSRSFRA reduced the Postal Service's outlays past $ii.five billion annually by transferring pension liability for Postal Service employees who were veterans to the Department of the Treasury.³⁹ Congress required that those savings be used to pay down debt that USPS had accrued,⁴⁰ but the stage was set: many lawmakers saw a Postal Service of a sudden flush with cash and high revenue from record kickoff-grade mail volume that was slowing, merely thought to likely hold steady.

The culmination of the second major push for reform was H.R. 6407, the Postal Accountability and Enhancement Human activity ("PAEA") of 2006, whose sponsors included House Oversight Committee Chairman Rep. Tom Davis (R-Va.) and Ranking Member Rep. Henry Waxman (D-Cal.), passed past both chambers of Congress without opposition, and swiftly signed into law by President George Bush-league in the lame-duck session of the 109th Congress.⁴¹ 'Reform,' in this instance, may be too loose a term: according to the Congressional Research Service, the PAEA fabricated more than than 150 alterations to federal law.⁴² Because the PAEA so broadly impacted the Post, this section will focus on the longest-lasting and most significant changes brought about by the PAEA, namely the prefunding mandate and the section 302 network rationalization requirements. While many of the reforms implemented past the PAEA were both positive and needed, it is incommunicable to separate the useful changes from the callous requirements of the prefunding mandate. I bad apple tree spoils the barrel; then must we consider the prefunding mandate when discussing the PAEA.

What is the prefunding mandate? Merely put, it involves stashing currently-available coin away to pay for estimated futurity costs. In this case, Congress mandated that the Postal service create a pot of money—the Postal service Retiree Health Benefit Fund ("RHBF")—by making 10 annual mandatory payments of approximately $5.5 billion into the fund from 2006 to 2016.⁴³ Bolstered by a $20 billion transfer from the surplus in the CSRS fund mentioned higher up, the approximately $55 billion input by USPS was intended to provide a 'nest egg' that, as it accrued involvement, would exist able to encompass the retirement health needs of the Mail service'southward employee pool.⁴⁴

This mandate, even so, was an extreme departure from the norm. For years, the Postal Service (and the federal authorities more than broadly) utilized a pay-as-you-go model to fund retirement benefits for employees.⁴⁵ Statutorily mandating those payments stripped the Postal Service of the flexibility that all other private mail businesses had. The deleterious effects of the prefunding mandate were felt immediately. USPS net profits totaled $900 million in 2006 when the PAEA was enacted; losses immediately spiked to $5.1 billion in 2007 and were almost entirely attributable to PAEA prefunding requirements.⁴⁶ For more than perspective: USPS revenue in fiscal years 2005, 2006, and 2007 were $69.9 billion, $72.8 billion, and $74.ix billion, respectively.⁴⁷ Operating expenses for those years were $68.two billion, $71.vii billion, and $80.ane billion, respectively.⁴⁸

The Great Recession struck at the worst possible moment for the Mail. Equally the economy contracted, mail service book plummeted, and USPS revenues followed.⁴⁹ Simultaneously, the statutory requirements of PAEA forced the Mail to continue squirreling abroad billions of dollars.^l By 2012, the Mail had reached a breaking point: it defaulted on its obligations to prefund the RHBF and other retirement funds.⁵¹ To date, USPS has defaulted on $33.nine billion in required payments to the RHBF and unfunded liabilities for retiree health benefits total $69 billion, according to the Government Accountability Office.⁵² How has the Postal Service been able to accrue such debt without collapsing? The answer is complicated but lies in the 2011 opinion of the Department of Justice's Role of Legal Counsel, which advised that as long equally the Post eventually pays the Part of Personnel Management dorsum for those costs, its retirees can proceed to receive their benefits.⁵³ And then, while the Postal Service connected to accrue debt on paper, it managed to go on the lights on and the mail flowing.

Over a decade of losses took its toll on the Postal Service, which was forced to respond drastically. In her April 2019 testimony to Congress, and so-Postmaster General Megan Brennan summarized the sweeping measures that USPS had been forced to implement every bit a issue of its severe turn down in operating funds.⁵⁴ The Postal Service consolidated over half of its mail processing facilities, reduced its workforce past almost 200,000 employees, and reduced capital letter expenditures by over 44 percent.⁵⁵ (See Fig. 1 below.)

Fig. 1. Cost control measures implemented past USPS since the enactment of the PAEA.
Source: PMG Brennan'due south testimony before the House Committee on Oversight and Reform United States Business firm of Representatives⁵⁶

It is axiomatic that the catastrophic impacts of the Great Recession and the prefunding mandate forced a astringent downsizing of the Mail's footprint.⁵⁷ Yet, a partial "correct-sizing" was actually required by department 302 of the PAEA.⁵⁸ The Postal service was to examine its backlog facilities, unprofitable locations, and sure 'redundant' employees and begin consolidation in an endeavor to reduce costs.⁵⁹ The Mail service estimated that this downsizing via the Network Rationalization Initiative ("NRI") would save $805 million annually.⁶⁰

For obvious reasons, the NRI proved extremely unpopular.⁶¹ Despite efforts to communicate the imminent changes, the general public was defenseless unaware and frustrated past the closures of facilities and subsequent post delays.⁶² Postal workers and communities were upset that their local postal service offices were slated for closure in the wave of consolidation and cost-cutting.⁶³ Congress acted swiftly, scrutinizing the NRI and eventually forcing USPS to abandon Phase Ii, and the savings from the initiative ultimately proved minimal.⁶⁴ In retrospect, declining revenue necessarily meant that the Postal Service had to reduce its footprint.⁶⁵ Notwithstanding, the Mail service'south failure to communicate to the general public and Congressional leadership the dire straits in which it found itself complicated its downsizing mission and led to Congressional reactions that tied the Postal Service'south hands further, including mandated six-twenty-four hours delivery and the preservation of other service standard safeguards.⁶⁶

In 2020, it is not hard to see how the tumult that has ensued as a consequence of new Postmaster General Louis DeJoy's operational changes at the Mail service has its roots in the enormity of the PAEA's failure. There would be no demand to forbid overtime or implement other operational changes that reduce outlays if the Postal Service'southward finances had not been impacted by the PAEA.⁶⁷ I must acknowledge that, every bit Postmaster General, Mr. DeJoy inherited an unfavorable state of affairs. Yet, I remain concerned that he has failed spectacularly at managing USPS, an agency providing a central public service, with the necessary openness and transparency. I will refrain from further give-and-take regarding the operational changes at the Mail out of respect for the ongoing investigation by the House Commission on Oversight and Reform into those changes.

4. RECOMMENDATIONS FOR CONGRESSIONAL AND LEGISLATIVE ACTION

The state of the U.S. Postal Service is dire, but information technology doesn't have to be. Congress must commit to enacting substantive postal reform in the 117th Congress. I propose a legislative package composed of 5 central points that would significantly ameliorate the brusk- and long-term difficulties facing the Postal Service and ensure its long-term health.

Beginning, Congress must immediately pass emergency appropriations totaling $25 billion for the U.S. Postal service for revenue forgone equally a result of the COVID-xix pandemic. On April 9, 2020, so-Postmaster General Megan Brennan addressed the House Committee on Oversight and Reform regarding the bear on of the COVID-xix pandemic on the Postal service and conveyed the urgent need for $25 billion in emergency appropriations to get-go coronavirus-related losses, a $25 billion grant to fund "shovel-ready" projects to modernize the Mail service, and access to $25 billion in unrestricted borrowing authority from Treasury.⁶⁸

In May 2020, Rep. Peter DeFazio (D-Ore.) and I led eighty ane of our colleagues in requesting $75 billion in aid for USPS be included in the Coronavirus Help, Relief, and Economic Security ("CARES") Act.⁶⁹ Though the CARES Act provided $10 billion in boosted borrowing authorisation for the Postal Service,⁷⁰ information technology was unable to access those funds until tardily July–in part because its borrowing potency with the Federal Financing Bank ("FFB") had lapsed and the Treasury Department failed to assist in those negotiations.⁷¹

Rep. DeFazio and I remained extremely concerned nigh the state of the Post's finances because of those complications. Additionally, in July, we received word from alarmed USPS employees that Postmaster Full general DeJoy was making substantial changes to the Postal Service's operations that were creating widespread postal service delays. In response to those actions, nosotros led a letter with Rep. Carolyn Maloney (D-Northward.Y.), Chairwoman of the Committee on Oversight and Reform, Rep. Gerald Connolly (D-Va.), Chairman of the Subcommittee on Government Operations, and 127 of our colleagues in encouraging Business firm Speaker Nancy Pelosi (D-Cal.) to provide $25 billion in emergency appropriations to the Mail and undo Postmaster General DeJoy's operational changes.⁷²

Those efforts culminated in the August 22, 2020 passage of H.R. 8015, the Delivering for America Deed.⁷³ Though our legislation is currently sitting on Senate Majority Leader Mitch McConnell'southward desk, its enactment is imperative. With $25 billion, the Postal Service could modernize its crumbling delivery vehicle armada, perform much-needed maintenance on its facilities, and pay off debt owed to the FFB to stabilize its fiscal basis.

Second, Congress must enact H.R. 2382, Rep. DeFazio's USPS Fairness Human activity.⁷⁴ H.R. 2382 is one of the rare bills that combines efficacy with brevity: in two sentences, information technology repeals the PAEA's prefunding mandate in its entirety. This substantive legislation passed the House of Representatives on February 5, 2020 under suspension of the rules, a technique regularly employed past the House to chop-chop pass bipartisan, common-sense legislation using a two-thirds affirmative vote. H.R. 2382 cleared that loftier hurdle by a vote of 309-106.⁷⁵

Why, though, should Congress laissez passer legislation that has piddling meaningful bear on on the day-to-24-hour interval operations of the Mail service? As discussed in the previous section, the prefunding mandate only required that USPS fund the RHBF until 2017. Repealing the prefunding mandate wipes $33.ix billion in RHBF payments off of the Postal service's books while simultaneously reducing annual acquittal outlays for the RHBF fund past $1 billion.⁷⁶ Ultimately, these changes help move USPS towards long-term financial solvency.

3rd, Congress should enact legislation that would require most current and future Postal Service retirees to participate in Medicare Part B. In 2017, and so-Chair of the Oversight and Government Reform Committee Jason Chaffetz (R-Utah) and and then-Ranking Member, the tardily Elijah Cummings (D-Medico.), included this proposal in their Postal Reform Act, H.R. 756. The nonpartisan Congressional Budget Office estimated that this proposal would reduce USPS straight spending past $470 million annually.⁷⁷

Although this proposal drew some opposition from retired federal employees because of the increased cost to Medicare,⁷⁸ information technology was supported by both National Association of Alphabetic character Carriers and the American Postal Workers Union, ii of the largest unions for postal workers.⁷⁹ Enacting this proposal would not only ensure that postal employees maintain their high-quality healthcare, simply likewise serves as a necessary acquittance that the federal regime cannot completely separate itself from the fate of Postal Service employees.

Fourth, Congress should enact legislation, proposed by Rep. Stephen Lynch (D-Mass.), to reinvest the funds currently attributed to the Postal Service Retiree Health Benefits Fund.⁸⁰ Presently, the funds deposited by the Postal Service into the RHBF are invested in depression-interest Treasury bonds. H.R. 2553 would allow betwixt 25 percentage and thirty percent of the approximately $48 billion that is currently bachelor through the RHBF to be invested in higher-yield index funds.⁸¹ While reinvesting those funds inherently presents greater risk, the likelihood of fully funding the RHBF increases significantly with the adoption of this method, co-ordinate to the Postal Service's Role of Inspector Full general.⁸² Consider that, by 2018, the Postal Service had earned $15.3 billion in interest from the funds invested in the RHBF.⁸³ A slightly more ambitious investment strategy would yield billions of dollars.

5th and finally, Congress must address the Postal Service's repeated failures to effectively communicate with both the public and Congress itself. Equally discussed previously, i of the key failures of the NRI was the disability of the Mail to adequately convey the potential and realized disruptions in service to Americans and Congress prior to its implementation. In the same style, Postmaster General DeJoy completely failed to notify Congress, USPS leadership, the American people, or his own employees of the nature of his recent operational changes. By failing to convey that information to the public, Mr. DeJoy ensured that his efforts would ultimately do more harm than good to the Postal Service.

In order to more successfully implement operational reforms moving forward, Congress should require quarterly reports beyond standard financial disclosures from the Postal Service Board of Governors and Postmaster Full general regarding upcoming plans for operational and service changes. The Postmaster General should also exist required to meet annually with both the Firm Oversight Committee and its Subcommittee on Government Operations. These reports and meetings would allow Congress to weigh in on any planned changes and keep constituents informed on the topic.

The proposals identified above are not all-encompassing; I exercise non pretend to have all of the answers. I take non touched upon proposals to found exigent prices for the duration of the COVID-19 pandemic, untie price caps from their current CPI tether, or equip mail service offices with public high-speed Internet or electrical vehicle charging stations. Rather, the value of the proposals to a higher place lies in their bipartisan back up and their ability to provide both firsthand and long-term relief to the Postal service's about pressing bug.

V. Decision

While I believe that the adoption of the five measures above would significantly do good the U.Southward. Postal Service, the first 2 are clearly the almost necessary. In order to survive the COVID-19 pandemic, Congress must provide $25 billion in emergency appropriations to the Postal Service to help it cope with lost revenue and make the much-needed infrastructure investments that they have had to ignore for too long. Moreover, eliminating the prefunding mandate will enable the Postal Service to move beyond the damaging effects of the past decade and into a more sustainable future.

The Mail remains what it has ever been to our country: an essential provider of goods and services; a core component of our economy; a pathway for many proficient, stable jobs; and a point of pride for the American people. Looking towards the 117th Congress, it is essential that Congress urgently advance postal reform legislation. By adopting the provisions outlined higher up, Congress will deliver for the Postal Service and ensure that they, in turn, can deliver for the American people for generations to come.

What Act Of Congress Improved Mail Service,

Source: https://harvardjol.com/2020/10/29/fixing-the-united-states-postal-service-how-congress-must-act-to-bring-financial-stability-to-the-agency-and-comprehensive-mail-service-to-the-american-people/

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What Act Of Congress Improved Mail Service

What Act Of Congress Improved Mail Service,

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