Comments of

Chairman Ruth Y. Goldway

Postal Regulatory Commission

Submitted to the U.S. Senate Homeland Security and Governmental Affairs Comm¡ttee's

Subcommittee on Federal Financial Management, Government lnformation, FederalServices, and

lnternational Security

"Addressing the U.S. Postal Service's Financial Crisis"

May L7,2OLL

Chairman Carper and Ranking Member Brown, thank you for the opportunity to submit my

comments as Chairman of the Postal Regulatory Commission for inclusion in today's hearing record.

I regret being unable to testify in person.

We all know that in four months, the United States Postal Service will conclude its fiscal year and itwill not have sufficient cash or borrowing authority to pay all of ¡ts b¡lls.Commission analysis has found that the Postal Service's financial crisis derives from an overly

ambitious requirement for the Postal Service to prefund its future ret¡ree health benefit premiums.Over the past four years, the Postal Service has paid 521.9 billion to prefund these benefits. Allother things being equal, the Postal Service would have achieved a small net profit over that time,

except for the prefunding requirement - rather than losses exceeding SZO billion. The Commission'sobjective analysis shows that the Postal Service has essentially overpaid as much as SSS billion into

the Civil Service Retirement System, and those funds could be used to help address the current

crisis.

I reiterate the Commission's continuing support for the fundamental approach outlined in your bill

to address the financial crisis and long-standing issues related to Postal Service funding of itsemployee pensions, as well as its future retiree health benefit fund. The Commission wishes to beof assistance to the Committee so that legislative reform in this area proceeds quickly and

successfully.

Your bill also provides for regulatory oversight of non-postal products and services that may be

proposed to the Commission under new flexibilities to be provided to the Postal Service. The

Commission believes this will promote postal growth and innovation while protecting the public

interest, as is currently the case with postal products and services.

The Commission supports modernization of the Advisory Opinion process. Your proposal requiringthe Postal Service to respond specifically to the issues and recommendations in the Advisory
The Postal Service has said that it plans to request an Advisory Opinion within months related to the

closing of a large number of post offices nationwide. lt is apparent, however, from the volume of

news reports and customer inquiries received by the Commission from around the country that thePostal Service is already taking substantial action to close post offices or evaluate them for closure.

The Postal Service has not provided details of this activity to the Commission.

I am concerned that the Postal Service should not be undertaking nationwide service changes

without first requesting an Advisory Opinion. Their suggested timing of such a request may

obfuscate the purpose and intent of Congress in requiring such Advisory Opinions.

The Commission has provided comments to the Postal Service's Federal Register filing regarding

changes to the closings process, as well as in an Advisory Opinion on Station and Branch Closings. Iam concerned the public's rights to not¡f¡cat¡on and participation in the closing process are now

ignored. The Postal Service is a government monopoly with obligations to all its citizens, not only a

delivery service for business mailers - as important as that may be to our nation's economy.

Effective regulatory oversight is especially vital when the entire mail system faces major changes.

The Commission ensures transparency, accountability and adequate service levels and supports

positive changes needed to keep the Postal Service vital and relevant.ln closing, I was heartened by Senator Carper's recent editorial promoting the "triple happiness" of

wiser energy policies that protect our environment, reduce costs, and create jobs. ln my view,

moving to electric vehicles could result in environmental and financial dividends if the Postal

Service's financial difficulties can be resolved.

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