19–006 

112TH CONGRESS REPT. 112–363 " ! HOUSE OF REPRESENTATIVES 2d Session Part 1 

POSTAL REFORM ACT OF 2011 

JANUARY 17, 2012.—Ordered to be printed 

Mr. ISSA, from the Committee on Oversight and Government 

Reform, submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 2309] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Oversight and Government Reform, to whom 

was referred the bill (H.R. 2309) to restore the financial solvency 

of the United States Postal Service and to ensure the efficient and 

affordable nationwide delivery of mail, having considered the same, 

report favorably thereon with an amendment and recommend that 

the bill as amended do pass. 

CONTENTS 

Page 

Committee Statement and Views ........................................................................... 42 

Section-by-Section .................................................................................................... 58 

Explanation of Amendments ................................................................................... 73 

Committee Consideration ........................................................................................ 76 

Rollcall Votes ............................................................................................................ 77 

Application of Law to the Legislative Branch ....................................................... 78 

Statement of Oversight Findings and Recommendations of the Committee ...... 79 

Statement of General Performance Goals and Objectives .................................... 79 

Federal Advisory Committee Act ............................................................................ 79 

Unfunded Mandate Statement ............................................................................... 79 

Earmark Identification ............................................................................................ 79 

Committee Estimate ................................................................................................ 79 

Budget Authority and Congressional Budget Office Cost Estimate .................... 79 

Changes in Existing Law Made by the Bill as Reported ...................................... 91 

Minority Views ......................................................................................................... 122 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 


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SECTION 1. SHORT TITLE; TABLE OF CONTENTS; REFERENCES. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Postal Reform Act of 2011’’. 

(b) TABLE OF CONTENTS.—The table of contents of this Act is as follows: 

Sec. 1. Short title; table of contents; references. 

TITLE I—POSTAL SERVICE MODERNIZATION 

Subtitle A—Commission on Postal Reorganization 

Sec. 101. Short title. 

Sec. 102. Definitions. 

Sec. 103. Commission on Postal Reorganization. 

Sec. 104. Recommendations for closures and consolidations. 

Sec. 105. Implementation of closures and consolidations. 

Sec. 106. Congressional consideration of final CPR reports. 

Sec. 107. Nonappealability of decisions. 

Sec. 108. Rules of construction. 

Sec. 109. GAO study and report. 

Subtitle B—Other Provisions 

Sec. 111. Implementation of discretionary non-mail delivery days. 

Sec. 112. Efficient and flexible universal postal service. 

Sec. 113. Enhanced reporting on Postal Service efficiency. 

Sec. 114. Applicability of procedures relating to closures and consolidations. 

TITLE II—POSTAL SERVICE FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE 

AUTHORITY 

Subtitle A—Establishment and Organization 

Sec. 201. Purposes. 

Sec. 202. Establishment of the Authority. 

Sec. 203. Membership and qualification requirements. 

Sec. 204. Organization. 

Sec. 205. Executive Director and staff. 

Sec. 206. Funding. 

Subtitle B—Powers of the Authority 

Sec. 211. Powers. 

Sec. 212. Exemption from liability for claims. 

Sec. 213. Treatment of actions arising under this title. 

Sec. 214. Delivery point modernization. 

Subtitle C—Establishment and Enforcement of Financial Plan and Budget for the Postal Service 

Sec. 221. Development of financial plan and budget for the Postal Service. 

Sec. 222. Supplementary borrowing authority during a control period. 

Sec. 223. Process for submission and approval of financial plan and budget. 

Sec. 224. Responsibilities of the Authority. 

Sec. 225. Effect of finding noncompliance with financial plan and budget. 

Sec. 226. Recommendations regarding financial stability, etc. 

Sec. 227. Special rules for fiscal year in which control period commences. 

Sec. 228. Assistance in achieving financial stability, etc. 

Sec. 229. Obtaining reports. 

Sec. 230. Reports and comments. 

Subtitle D—Termination of a Control Period 

Sec. 231. Termination of control period, etc. 

Sec. 232. Congressional consideration of recommendation. 

TITLE III—POSTAL SERVICE WORKFORCE 

Subtitle A—General Provisions 

Sec. 301. Modifications relating to determination of pay comparability. 

Sec. 302. Limitation on postal contributions under FEGLI and FEHBP. 

Sec. 303. Repeal of provision relating to overall value of fringe benefits. 

Sec. 304. Applicability of reduction-in-force procedures. 

Sec. 305. Modifications relating to collective bargaining. 

Sec. 306. One-time transfer of net surplus postal retirement contributions. 

Subtitle B—Postal Service Workers’ Compensation Reform 

Sec. 311. Postal Service workers’ compensation reform. 

TITLE IV—POSTAL SERVICE REVENUE 

Sec. 401. Adequacy, efficiency, and fairness of postal rates. 

Sec. 402. Repeal of rate preferences for qualified political committees. 

Sec. 403. Rate preferences for nonprofit advertising. 

Sec. 404. Streamlined review of qualifying service agreements for competitive products. 

Sec. 405. Submission of service agreements for streamlined review. 

Sec. 406. Transparency and accountability for service agreements. 

Sec. 407. Nonpostal services. 

Sec. 408. Reimbursement of Alaska bypass mail costs. 

Sec. 409. Appropriations modernization. 

Sec. 410. Retiree health care benefit payment deferral. 

TITLE V—POSTAL CONTRACTING REFORM 

Sec. 501. Contracting provisions. 

Sec. 502. Technical amendment to definition. 


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(c) REFERENCES.—Except as otherwise expressly provided, whenever in this Act 

an amendment or repeal is expressed in terms of an amendment to, or repeal of, 

a section or other provision, the reference shall be considered to be made to a section or other provision of title 39, United States Code. 

TITLE I—POSTAL SERVICE MODERNIZATION 

Subtitle A—Commission on Postal Reorganization 

SEC. 101. SHORT TITLE. 

This subtitle may be cited as the ‘‘Commission on Postal Reorganization Act’’ or 

the ‘‘CPR Act’’. 

SEC. 102. DEFINITIONS. 

For purposes of this title— 

(1) the term ‘‘Postal Service’’ means the United States Postal Service; 

(2) the term ‘‘postal retail facility’’ means a post office, post office branch, post 

office classified station, or other facility which is operated by the Postal Service, 

and the primary function of which is to provide retail postal services; 

(3) the term ‘‘mail processing facility’’ means a processing and distribution 

center, processing and distribution facility, network distribution center, or other 

facility which is operated by the Postal Service, and the primary function of 

which is to sort and process mail; 

(4) the term ‘‘district office’’ means the central office of an administrative field 

unit with responsibility for postal operations in a designated geographic area 

(as defined under regulations, directives, or other guidance of the Postal Service, as in effect on June 23, 2011); 

(5) the term ‘‘area office’’ means the central office of an administrative field 

unit with responsibility for postal operations in a designated geographic area 

which is comprised of designated geographic areas as referred to in paragraph 

(4); 

(6) the term ‘‘baseline year’’ means the fiscal year last ending before the date 

of the enactment of this Act; and 

(7) the term ‘‘Member of Congress’’ has the meaning given such term by section 2106 of title 5, United States Code. 

SEC. 103. COMMISSION ON POSTAL REORGANIZATION. 

(a) ESTABLISHMENT.—There shall be established, not later than 90 days after the 

date of the enactment of this Act, an independent commission to be known as the 

‘‘Commission on Postal Reorganization’’ (hereinafter in this section referred to as the 

‘‘Commission’’). 

(b) DUTIES.—The Commission shall carry out the duties specified for it in this 

subtitle. 

(c) MEMBERS.— (1) IN GENERAL.—The Commission shall be composed of 5 members who shall 

be appointed by the President, and of whom— 

(A) 1 shall be appointed from among individuals recommended by the 

Speaker of the House of Representatives; 

(B) 1 shall be appointed from among individuals recommended by the majority leader of the Senate; 

(C) 1 shall be appointed from among individuals recommended by the minority leader of the House of Representatives; 

(D) 1 shall be appointed from among individuals recommended by the minority leader of the Senate; and 

(E) 1 shall be appointed from among individuals recommended by the 

Comptroller General. 

(2) QUALIFICATIONS.— (A) IN GENERAL.—Members of the Commission shall be chosen to represent the public interest generally, and shall not be representatives of specific interests using the Postal Service. 

(B) INELIGIBILITY.—An individual may not be appointed to serve as a 

member of the Commission if such individual is a Member of Congress or 

served as an employee of the Postal Service or the Postal Regulatory Commission, or of a labor organization representing employees of the Postal 

Service or the Postal Regulatory Commission, during the 3-year period ending on the date of such appointment. 

(3) POLITICAL AFFILIATION.—Not more than 3 members of the Commission 

may be of the same political party. 


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(d) TERMS.—Each member of the Commission shall be appointed for the life of the 

Commission and may be removed only for cause. 

(e) VACANCIES.—A vacancy in the Commission shall be filled in the same manner 

as the original appointment. 

(f) CHAIRMAN.—The President shall, at the time of making appointments under 

subsection (c), designate one of the members to serve as chairman of the Commission. 

(g) COMPENSATION AND TRAVEL EXPENSES.— 

(1) COMPENSATION.— 

(A) IN GENERAL.—Except as provided in subparagraph (B), each member 

of the Commission shall be paid at a rate equal to the daily equivalent of 

$40,000 per year for each day (including travel time) during which the 

member is engaged in the actual performance of duties vested in the Commission. 

(B) EXCEPTION.—Any member of the Commission who is a full-time officer or employee of the United States may not receive additional pay, allowances, or benefits by reason of such member’s service on the Commission. 

(2) TRAVEL EXPENSES.—Each member shall receive travel expenses, including 

per diem in lieu of subsistence, in accordance with applicable provisions of subchapter I of chapter 57 of title 5, United States Code. 

(h) DIRECTOR.—The Commission shall have a Director who shall be appointed by 

the Commission. The Director shall be paid at the rate of basic pay for level IV of 

the Executive Schedule under section 5315 of title 5, United States Code. An appointment under this subsection shall be subject to the requirements of subsection 

(c)(2). 

(i) ADDITIONAL PERSONNEL.—With the approval of the Commission, the Director 

may appoint and fix the pay of such additional personnel as the Director considers 

appropriate. Such additional personnel may be appointed without regard to the provisions of title 5, United States Code, governing appointments in the competitive 

service, and may be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule 

pay rates, except that an individual so appointed may not receive pay at a rate of 

basic pay in excess of the rate of basic pay payable to the Director. An individual 

appointed under this subsection shall serve at the pleasure of the Director. 

(j) PROVISIONS RELATING TO DETAILS.— 

(1) IN GENERAL.—Upon request of the Director, the head of any Federal department or agency may detail any of the personnel of such department or 

agency to the Commission to assist the Commission in carrying out its duties 

under this subtitle. Notwithstanding any other provision of law, to provide continuity in the work of the Commission, such details may be extended beyond 

1 year at the request of the Director. 

(2) NUMERICAL LIMITATION.—Not more than 1⁄3 of the personnel of the Commission may consist of the number of individuals on detail from the Postal Service and the Postal Regulatory Commission combined. 

(3) OTHER LIMITATIONS.—A person may not be detailed to the Commission 

from the Postal Service or the Postal Regulatory Commission if such person 

participated personally and substantially on any matter, within the Postal Service or the Postal Regulatory Commission, concerning the preparation of recommendations for closures or consolidations of postal facilities under this subtitle. No employee of the Postal Service or the Postal Regulatory Commission 

(including a detailee to the Postal Service or the Postal Regulatory Commission) 

may— 

(A) prepare any report concerning the effectiveness, fitness, or efficiency 

of the performance, on the staff of the Commission, of any person detailed 

from the Postal Service or the Postal Regulatory Commission to such staff; 

(B) review the preparation of such a report; or 

(C) approve or disapprove such a report. 

(k) OTHER AUTHORITIES.— 

(1) EXPERTS AND CONSULTANTS.—The Commission may procure by contract, to 

the extent funds are available, temporary or intermittent services under section 

3109 of title 5, United States Code. 

(2) LEASING, ETC.—The Commission may lease space and acquire personal 

property to the extent funds are available. 

(l) AUTHORIZATION OF APPROPRIATIONS.—In order to carry out this section, there 

are authorized to be appropriated out of the Postal Service Fund $20,000,000, which 

funds shall remain available until expended. 

(m) FINANCIAL REPORTING.— 


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(1) AUDIT AND EXPENDITURES.—The Commission shall be responsible for 

issuing annual financial statements and for establishing and maintaining adequate controls over its financial reporting. 

(2) INTERNAL AUDITS.—The Commission shall maintain an adequate internal 

audit of its financial transactions. 

(3) ANNUAL CERTIFICATION.—The Commission shall obtain an annual certification for each fiscal year from an independent, certified public accounting firm 

of the accuracy of its financial statements. 

(4) COMPTROLLER GENERAL.—The accounts and operations of the Commission 

shall be audited by the Comptroller General and reports thereon made to the 

Congress to the extent and at such times as the Comptroller General may determine. 

(n) TERMINATION.—The Commission shall terminate 60 days after submitting its 

final reports under section 104(d)(3). 

SEC. 104. RECOMMENDATIONS FOR CLOSURES AND CONSOLIDATIONS. 

(a) PLAN FOR THE CLOSURE OR CONSOLIDATION OF POSTAL RETAIL FACILITIES.— 

(1) IN GENERAL.—Not later than 120 days after the date of the enactment of 

this Act, the Postal Service, in consultation with the Postal Regulatory Commission, shall develop and submit to the Commission on Postal Reorganization a 

plan for the closure or consolidation of such postal retail facilities as the Postal 

Service considers necessary and appropriate so that the total annual costs attributable to the operation of postal retail facilities will be, for each fiscal year 

beginning at least 2 years after the date on which the Commission transmits 

to Congress its final report under subsection (d)(3)(A) relating to this subsection, at least $1,000,000,000 less than the corresponding total annual costs 

for the baseline year. 

(2) CONTENTS.—The plan shall include— 

(A) a list of the postal retail facilities proposed for closure or consolidation 

under this subtitle; 

(B) a proposed schedule under which— 

(i) closures and consolidations of postal retail facilities would be carried out under this subtitle; and 

(ii) all closures and consolidations of postal retail facilities under this 

subtitle would be completed by not later than 2 years after the date on 

which the Commission transmits to Congress its final report under subsection (d)(3)(A) relating to such plan; 

(C) the estimated total annual cost savings attributable to the proposed 

closures and consolidations described in the plan; 

(D) the criteria and process used to develop the information described in 

subparagraphs (A) and (B); 

(E) the methodology and assumptions used to derive the estimates described in subparagraph (C); and 

(F) any changes to the processing, transportation, delivery, or other postal operations anticipated as a result of the proposed closures and consolidations described in the plan. 

(3) CONSISTENCY.—The methodology and assumptions used to derive the cost 

estimates described in paragraph (2)(C) shall be consistent with the methodology and assumptions which would have been used by the Postal Service if 

those closures and consolidations had instead taken effect in the baseline year. 

(b) PLAN FOR THE CLOSURE OR CONSOLIDATION OF MAIL PROCESSING FACILITIES.— 

(1) IN GENERAL.—Not later than 300 days after the date of the enactment of 

this Act, the Postal Service, in consultation with the Inspector General of the 

United States Postal Service, shall develop and submit to the Commission on 

Postal Reorganization a plan for the closure or consolidation of such mail processing facilities as the Postal Service considers necessary and appropriate so 

that— 

(A) the total annual costs attributable to the operation of mail processing 

facilities will be, for each fiscal year beginning at least 2 years after the 

date on which the Commission transmits to Congress its final report under 

subsection (d)(3)(A) relating to this subsection, at least $2,000,000,000 less 

than the corresponding total annual costs for the baseline year; and 

(B) the Postal Service has, for fiscal years beginning at least 2 years after 

the date on which the Commission transmits to Congress its final report 

under subsection (d)(3)(A) relating to this subsection, no more than 10 percent excess mail processing capacity. 

(2) CONTENTS.—The plan shall include— 

(A) a list of the mail processing facilities proposed for closure or consolidation under this subtitle; 


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(B) a proposed schedule under which— 

(i) closures and consolidations of mail processing facilities would be 

carried out under this subtitle; and 

(ii) all closures and consolidations of mail processing facilities under 

this subtitle would be completed by not later than 2 years after the 

date on which the Commission transmits to Congress its final report 

under subsection (d)(3)(A) relating to such plan; 

(C) the estimated total annual cost savings attributable to the proposed 

closures and consolidations described in the plan; 

(D) the criteria and process used to develop the information described in 

subparagraphs (A) and (B); 

(E) the methodology and assumptions used to derive the estimates described in subparagraph (C); and 

(F) any changes to the processing, transportation, delivery, or other postal operations anticipated as a result of the proposed closures and consolidations described in the plan. 

(3) CONSISTENCY.—The methodology and assumptions used to derive the cost 

estimates described in paragraph (2)(C) shall be consistent with the methodology and assumptions which would have been used by the Postal Service if 

those closures and consolidations had instead taken effect in the baseline year. 

(4) EXCESS MAIL PROCESSING CAPACITY.—The Commission shall cause to be 

published in the Federal Register notice of a proposed definition of ‘‘excess mail 

processing capacity’’ for purposes of this section within 120 days after the date 

of the enactment of this Act, and shall provide a period of 30 days for public 

comment on the proposed definition. Not later than 180 days after the date of 

the enactment of this Act, the Commission shall issue and cause to be published 

in the Federal Register a final definition of ‘‘excess mail processing capacity’’ for 

purposes of this section. Such definition shall include an estimate of the total 

amount of excess mail processing capacity in mail processing facilities as of the 

date of the enactment of this Act. 

(5) UNDERUTILIZED MAIL PROCESSING FACILITIES.—In developing a plan under 

this subsection, the Postal Service may include the estimated total cost savings 

that would result from moving mail processing operations to any mail processing facility that, as of the date of introduction of this Act— 

(A) is not currently used by the Postal Service; and 

(B) is capable of processing mail to the Postal Service’s standards. 

(c) PLAN FOR THE CLOSURE OR CONSOLIDATION OF AREA AND DISTRICT OFFICES.— 

(1) IN GENERAL.—Not later than 300 days after the date of the enactment of 

this Act, the Postal Service, in consultation with the Inspector General of the 

United States Postal Service, shall develop and submit to the Commission on 

Postal Reorganization a plan for the closure or consolidation of such area and 

district offices as the Postal Service considers necessary and appropriate so that 

the combined total number of area and district offices will be, for each fiscal 

year beginning at least 2 years after the date on which the Commission transmits to Congress its final report under subsection (d)(3)(A) relating to this subsection, at least 30 percent less than the corresponding combined total for the 

baseline year. 

(2) CONTENTS.—The plan shall include— 

(A) a list of the area and district offices proposed for closure or consolidation under this subtitle; 

(B) a proposed schedule under which— 

(i) closures and consolidations of area and district offices would be 

carried out under this subtitle; and 

(ii) all closures and consolidations of area and district offices under 

this subtitle would be completed by not later than 2 years after the 

date on which the Commission transmits to Congress its final report 

under subsection (d)(3)(A) relating to such plan; 

(C) the estimated total annual cost savings attributable to the proposed 

closures and consolidations described in the plan; 

(D) the criteria and process used to develop the information described in 

subparagraphs (A) and (B); 

(E) the methodology and assumptions used to derive the estimates described in subparagraph (C); and 

(F) any changes to the processing, transportation, delivery, or other postal operations anticipated as a result of the proposed closures and consolidations described in the plan. 

(3) CONSISTENCY.—The methodology and assumptions used to derive the cost 

estimates described in paragraph (2)(C) shall be consistent with the methodVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6621 E:\HR\OC\HR363P1.XXX HR363P1

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ology and assumptions which would have been used by the Postal Service if 

those closures and consolidations had instead taken effect in the baseline year. 

(d) REVIEW AND RECOMMENDATIONS OF THE COMMISSION.— (1) INITIAL REPORTS.— (A) IN GENERAL.—After receiving the plan of the Postal Service under 

subsection (a), (b), or (c), the Commission on Postal Reorganization shall 

transmit to Congress and publish in the Federal Register a report under 

this paragraph, which shall contain the Commission’s findings based on a 

review and analysis of such plan, together with the Commission’s initial 

recommendations for closures and consolidations of postal facilities, mail 

processing facilities, or area and district offices (as the case may be). 

(B) EXPLANATION OF CHANGES.—The Commission shall explain and justify 

in its report any recommendations made by the Commission that are different from those contained in the Postal Service plan to which such report 

pertains. 

(C) DEADLINES.—A report of the Commission under this paragraph shall 

be transmitted and published, in accordance with subparagraph (A), within— 

(i) if the report pertains to the plan under subsection (a), 60 days 

after the date on which the Commission receives such plan; or 

(ii) if the report pertains to the plan under subsection (b) or (c), 90 

days after the date on which the Commission receives such plan. 

(2) PUBLIC HEARINGS.— 

(A) IN GENERAL.—After receiving the plan of the Postal Service under 

subsection (a), (b), or (c), the Commission on Postal Reorganization shall 

conduct at least 5 public hearings on such plan. The hearings shall be conducted in geographic areas chosen so as to reflect a broadly representative 

range of needs and interests. 

(B) TESTIMONY.—All testimony before the Commission at a public hearing 

conducted under this paragraph shall be given under oath. 

(C) DEADLINES.—All hearings under this paragraph shall be completed 

within 60 days after the date as of which the Commission satisfies the requirements of paragraph (1) with respect to such plan. 

(3) FINAL REPORTS.— 

(A) IN GENERAL.—After satisfying the requirements of paragraph (2) with 

respect to the plan of the Postal Service under subsection (a), (b), or (c) (as 

the case may be), the Commission shall transmit to Congress and publish 

in the Federal Register a report under this paragraph containing a summary of the hearings conducted with respect to such plan, together with the 

Commission’s final recommendations for closures and consolidations of postal facilities, mail processing facilities, or area and district offices (as the 

case may be). 

(B) APPROVAL.—Recommendations under subparagraph (A) shall not be 

considered to be final recommendations unless they are made with— 

(i) except as provided in clause (ii), the concurrence of at least 4 

members of the Commission; or 

(ii) to the extent that the requirements of subsection (b)(1)(A) or (c)(1) 

are not met, the concurrence of all sitting members, but only if the 

shortfall (relative to the requirements of subsection (b)(1)(A) or (c)(1), 

as the case may be) does not exceed 25 percent. 

(C) CONTENTS.—A report under this paragraph shall include— 

(i) the information required by paragraph (2) of subsection (a), (b), or 

(c) (as the case may be); and 

(ii) a description of the operations that will be affected by the closure 

or consolidation and the facilities or offices which will be performing or 

ceasing to perform such operations as a result of such closure or consolidation. 

(D) DEADLINES.—A report of the Commission under this paragraph shall 

be transmitted and published, in accordance with subparagraph (A), within 

60 days after the date as of which the Commission satisfies the requirements of paragraph (2) with respect to the plan involved. 

(e) LIMITATION RELATING TO POSTAL RETAIL FACILITIES IDENTIFIED FOR CLOSURE

OR CONSOLIDATION.— 

(1) APPLICABILITY.—This subsection applies to any plan of the Postal Service 

under subsection (a) and any report of the Commission under subsection (d) 

(whether initial or final) pertaining to such plan. 

(2) LIMITATION.—Of the total number of postal retail facilities recommended 

for closure or consolidation (combined) under any plan or report to which this 

subsection applies, the number of such facilities that are within the K or L cost 


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ascertainment grouping (combined) shall account for not more than 10 percent 

of such total number. 

(3) REFERENCES.—For purposes of this subsection— 

(A) any reference to a ‘‘cost ascertainment grouping’’ shall be considered 

to refer to a cost ascertainment grouping as described in section 123.11 of 

the Postal Operations Manual (as in effect on June 23, 2011); and 

(B) any reference to a particular category (designated by a letter) of a cost 

ascertainment grouping shall be considered to refer to such category, as described in such section 123.11 (as in effect on the date specified in subparagraph (A)). 

(f) ANNUAL REPORTS.— (1) IN GENERAL.—There shall be included in the next 5 annual reports submitted under section 2402 of title 39, United States Code, beginning with the 

report covering any period of time occurring after the date of enactment of this 

Act, the following (shown on a State-by-State basis): 

(A) In connection with closures and consolidations taking effect in the 

year covered by the report, the total number of individuals separated from 

employment with the Postal Service, including, if separation occurs in a 

year other than the year in which the closing or consolidation occurs, the 

year in which separation occurs. 

(B) Of the total numbers under subparagraph (A)— 

(i) the number and percentage comprising preference eligibles or veterans; and 

(ii) the number and percentage comprising individuals other than 

preference eligibles or veterans. 

(C) Of the total numbers under subparagraph (A), the number and percentage reemployed in a position within the general commuting area of the 

facility or office involved (including, if reemployment occurs in a year other 

than the year in which the closing or consolidation occurs, the year in 

which reemployment occurs)— 

(i) with the Postal Service; or 

(ii) with an employer other than the Postal Service. 

(D) The methodology and assumptions used to derive the estimates described in subparagraph (B). 

(E) The criteria and process used to develop the information described in 

subparagraph (C). 

(2) DEFINITIONS.—For purposes of this subsection— 

(A) the term ‘‘preference eligible’’ has the meaning given such term in section 2108(3) of title 5, United States Code; and 

(B) the term ‘‘veteran’’ has the meaning given such term in section 101(2) 

of title 38, United States Code. 

SEC. 105. IMPLEMENTATION OF CLOSURES AND CONSOLIDATIONS. 

(a) IN GENERAL.—Subject to subsection (b), the Postal Service shall— 

(1) close or consolidate (as the case may be) the facilities and offices recommended by the Commission in each of its final reports under section 

104(d)(3); and 

(2) carry out those closures and consolidations in accordance with the timetable recommended by the Commission in such report, except that in no event 

shall any such closure or consolidation be completed later than 2 years after the 

date on which such report is submitted to Congress. 

(b) CONGRESSIONAL DISAPPROVAL.— 

(1) IN GENERAL.—The Postal Service may not carry out any closure or consolidation recommended by the Commission in a final report if a joint resolution 

disapproving the recommendations of the Commission is enacted, in accordance 

with section 106, before the earlier of— 

(A) the end of the 30-day period beginning on the date on which the Commission transmits those recommendations to Congress under section 

104(d)(3); or 

(B) the adjournment of the Congress sine die for the session during which 

such report is transmitted. 

(2) DAYS OF SESSION.—For purposes of paragraph (1) and subsections (a) and 

(c) of section 106, the days on which either House of Congress is not in session 

because of an adjournment of more than 7 days to a day certain shall be excluded in the computation of a period. 

SEC. 106. CONGRESSIONAL CONSIDERATION OF FINAL CPR REPORTS. 

(a) TERMS OF THE RESOLUTION.—For purposes of this subtitle, the term ‘‘joint resolution’’, as used with respect to a report under section 104(d)(3), means only a joint 

resolution— 


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(1) which is introduced within the 10-day period beginning on the date on 

which such report is received by Congress; 

(2) the matter after the resolving clause of which is as follows: ‘‘That Congress 

disapproves the recommendations of the Commission on Postal Reorganization, 

submitted by such Commission on ll, and pertaining to the closure or consolidation of ll.’’, the first blank space being filled in with the appropriate date 

and the second blank space being filled in with ‘‘postal retail facilities’’, ‘‘mail 

processing facilities’’, or ‘‘area and district offices’’ (as the case may be); 

(3) the title of which is as follows: ‘‘Joint resolution disapproving the recommendations of the Commission on Postal Reorganization.’’; and 

(4) which does not have a preamble. 

(b) REFERRAL.—A resolution described in subsection (a) that is introduced in the 

House of Representatives or the Senate shall be referred to the appropriate committees of the House of Representatives or the Senate, respectively. 

(c) DISCHARGE.—If the committee to which a resolution described in subsection (a) 

is referred has not reported such resolution (or an identical resolution) by the end 

of the 20-day period beginning on the date on which the Commission transmits the 

report (to which such resolution pertains) to Congress under section 104(d)(3), such 

committee shall, at the end of such period, be discharged from further consideration 

of such resolution, and such resolution shall be placed on the appropriate calendar 

of the House involved. 

(d) CONSIDERATION.— 

(1) IN GENERAL.—On or after the third day after the date on which the committee to which such a resolution is referred has reported, or has been discharged (under subsection (c)) from further consideration of, such a resolution, 

it is in order (even though a previous motion to the same effect has been disagreed to) for any Member of the respective House to move to proceed to the 

consideration of the resolution. A Member may make the motion only on the 

day after the calendar day on which the Member announces to the House concerned the Member’s intention to make the motion, except that, in the case of 

the House of Representatives, the motion may be made without such prior announcement if the motion is made by direction of the committee to which the 

resolution was referred. All points of order against the resolution (and against 

consideration of the resolution) are waived. The motion is highly privileged in 

the House of Representatives and is privileged in the Senate and is not debatable. The motion is not subject to amendment, or to a motion to postpone, or 

to a motion to proceed to the consideration of other business. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in 

order. If a motion to proceed to the consideration of the resolution is agreed to, 

the respective House shall immediately proceed to consideration of the joint resolution without intervening motion, order, or other business, and the resolution 

shall remain the unfinished business of the respective House until disposed of. 

(2) DEBATE.—Debate on the resolution, and on all debatable motions and appeals in connection therewith, shall be limited to not more than 2 hours, which 

shall be divided equally between those favoring and those opposing the resolution. An amendment to the resolution is not in order. A motion further to limit 

debate is in order and not debatable. A motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the resolution is not in order. A motion to reconsider the vote by which the resolution is 

agreed to or disagreed to is not in order. 

(3) VOTE ON FINAL PASSAGE.—Immediately following the conclusion of the debate on a resolution described in subsection (a) and a single quorum call at the 

conclusion of the debate if requested in accordance with the rules of the appropriate House, the vote on final passage of the resolution shall occur. 

(4) APPEALS.—Appeals from the decisions of the Chair relating to the application of the rules of the Senate or the House of Representatives, as the case may 

be, to the procedure relating to a resolution described in subsection (a) shall be 

decided without debate. 

(e) CONSIDERATION BY OTHER HOUSE.— 

(1) IN GENERAL.—If, before the passage by one House of a resolution of that 

House described in subsection (a), that House receives from the other House a 

resolution (described in subsection (a)) relating to the same report, then the following procedures shall apply: 

(A) The resolution of the other House shall not be referred to a committee 

and may not be considered in the House receiving it except in the case of 

final passage as provided in subparagraph (B)(ii). 

(B) With respect to the resolution described in subsection (a) (relating to 

the report in question) of the House receiving the resolution— 


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(i) the procedure in that House shall be the same as if no resolution 

(relating to the same report) had been received from the other House; 

but 

(ii) the vote on final passage shall be on the resolution of the other 

House. 

(2) DISPOSITION OF A RESOLUTION.—Upon disposition of the resolution received from the other House, it shall no longer be in order to consider the resolution that originated in the receiving House. 

(f) RULES OF THE SENATE AND HOUSE.—This section is enacted by Congress— 

(1) as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and as such it is deemed a part of the rules of each 

House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of a resolution described in subsection (a), and 

it supersedes other rules only to the extent that it is inconsistent with such 

rules; and 

(2) with full recognition of the constitutional right of either House to change 

the rules (so far as relating to the procedure of that House) at any time, in the 

same manner, and to the same extent as in the case of any other rule of that 

House. 

SEC. 107. NONAPPEALABILITY OF DECISIONS. 

(a) TO PRC.—The closing or consolidation of any facility or office under this subtitle may not be appealed to the Postal Regulatory Commission under section 404(d) 

or any other provision of title 39, United States Code, or be the subject of an advisory opinion issued by the Postal Regulatory Commission under section 3661 of such 

title. 

(b) JUDICIAL REVIEW.—No process, report, recommendation, or other action of the 

Commission on Postal Reorganization shall be subject to judicial review. 

SEC. 108. RULES OF CONSTRUCTION. 

(a) CONTINUED AVAILABILITY OF AUTHORITY TO CLOSE OR CONSOLIDATE POSTAL

FACILITIES.— (1) IN GENERAL.—Nothing in this subtitle shall be considered to prevent the 

Postal Service from closing or consolidating any postal facilities, in accordance 

with otherwise applicable provisions of law, either before or after the implementation of any closures or consolidations under this subtitle. 

(2) COORDINATION RULE.—No appeal or determination under section 404(d) of 

title 39, United States Code, or any other provision of law shall delay, prevent, 

or otherwise affect any closure or consolidation under this subtitle. 

(b) INAPPLICABILITY OF CERTAIN PROVISIONS.— (1) IN GENERAL.—The provisions of law identified in paragraph (2)— 

(A) shall not apply to any closure or consolidation carried out under this 

subtitle; and 

(B) shall not be taken into account for purposes of carrying out section 

103 or 104. 

(2) PROVISIONS IDENTIFIED.—The provisions of law under this paragraph are— (A) section 101(b) of title 39, United States Code; and 

(B) section 404(d) of title 39, United States Code. 

SEC. 109. GAO STUDY AND REPORT. 

(a) STUDY.—Not later than 1 year after the date of enactment of this Act, the 

Comptroller General of the United States shall conduct a study on the effects, with 

respect to the unemployment rate of minority communities, of the proposed closures 

and consolidations of postal retail facilities, mail processing facilities, and area or 

district offices under this subtitle. 

(b) REPORT.—Upon completion of the study required under subsection (a), the 

Comptroller General of the United States shall submit a report to Congress regarding the findings of such study. 

Subtitle B—Other Provisions 

SEC. 111. IMPLEMENTATION OF DISCRETIONARY NON-MAIL DELIVERY DAYS. 

(a) IN GENERAL.—Section 404 is amended by inserting after subsection (e) the following: 

‘‘(f)(1) The Postmaster General may, with respect to any year for which 6-day delivery is otherwise required, declare up to 12 non-mail delivery days. Not later than 

1 month before the beginning of the year, the Postmaster General shall submit to 

the Board of Governors a report listing the non-mail delivery days in such year. 


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‘‘(2) A non-mail delivery day under this subsection shall be a day other than— 

‘‘(A) a Sunday; 

‘‘(B) a legal public holiday listed in section 6103(a) of title 5 or any other day 

declared to be a holiday by Federal statute or Executive order; or 

‘‘(C) during the 30-day period that ends on the date of a regularly scheduled 

general election for Federal office. 

‘‘(3) Any day which is declared under this subsection to be a non-mail delivery 

day— 

‘‘(A) shall, for purposes of mail delivery and such other postal operations as 

the Postal Service may by regulation prescribe, be treated as if it were a Sunday; except that 

‘‘(B) an employee of the Postal Service (other than one who is prevented from 

working on such day by reason of this subsection) shall be entitled to the same 

pay and benefits for that day as if this subsection had not been enacted. 

‘‘(4)(A) The 6-day mail delivery requirement shall not apply with respect to a week 

in which a non-mail delivery day under this subsection occurs. 

‘‘(B) The authority to declare a non-mail delivery day under this subsection shall 

be considered to be within the right of the Postal Service to determine the methods, 

means, and personnel by which postal operations are to be conducted. 

‘‘(5) Not less than 6 months after the date of enactment of this subsection, the 

Postal Service may submit a proposal under section 3661 for a nationwide change 

in service to reduce mail delivery from 6 days to 5 days each week. Notwithstanding 

any other provision of law, the Postal Service shall maintain 6-day delivery service 

as the standard mail delivery schedule until 90 days following the rendering of an 

advisory opinion on 5-day delivery by the Postal Regulatory Commission.’’. 

SEC. 112. EFFICIENT AND FLEXIBLE UNIVERSAL POSTAL SERVICE. 

(a) POSTAL POLICY.— 

(1) IN GENERAL.—Section 101(b) is amended to read as follows: 

‘‘(b) The Postal Service shall provide effective and regular postal services to rural 

areas, communities, and small towns where post offices are not self-sustaining.’’. 

(2) CONFORMING AMENDMENTS.—Clause (iii) of section 404(d)(2)(A) is amended to read as follows: 

‘‘(iii) whether such closing or consolidation is consistent with the policy 

of the Government, as stated in section 101(b), that the Postal Service shall 

provide effective and regular postal services to rural areas, communities, 

and small towns where post offices are not self-sustaining;’’. 

(b) GENERAL DUTY.—Paragraph (3) of section 403(b) is amended to read as follows: 

‘‘(3) to ensure that postal patrons throughout the Nation will, consistent with 

reasonable economies of postal operations, have ready access to essential postal 

services.’’. 

(c) PRC REVIEW OF DETERMINATIONS TO CLOSE OR CONSOLIDATE A POST OFFICE.— 

(1) DEADLINE FOR REVIEW.—Section 404(d)(5) is amended by striking ‘‘120 

days’’ and inserting ‘‘60 days’’. 

(2) EXCLUSION FROM REVIEW.—Section 404(d) is amended by adding at the 

end the following: 

‘‘(7)(A) The appeals process set forth in paragraph (5) shall not apply to a determination of the Postal Service to close a post office if there is located, within 2 miles 

of such post office, a qualified contract postal unit. 

‘‘(B) For purposes of this paragraph— 

‘‘(i) the term ‘contract postal unit’ means a store or other place of business 

which— 

‘‘(I) is not owned or operated by the Postal Service; and 

‘‘(II) in addition to its usual operations, provides postal services to the 

general public under contract with the Postal Service; and 

‘‘(ii) the term ‘qualified contract postal unit’, as used in connection with a post 

office, means a contract postal unit which— 

‘‘(I) begins to provide postal services to the general public during the period— 

‘‘(aa) beginning 1 year before the date on which the closure or consolidation of such post office is scheduled to take effect; and 

‘‘(bb) ending on the 15th day after the date on which the closure or 

consolidation of such post office is scheduled to take effect; and 

‘‘(II) has not, pursuant to subparagraph (A), served as the basis for exempting any other post office from the appeals process set forth in paragraph (5). 


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‘‘(C)(i) If the contract postal unit (which is providing postal services that had been 

previously provided by the post office that was closed) does not continue to provide 

postal services, as required by subparagraph (B)(i)(II), for at least the 2-year period 

beginning on the date on which such post office was closed, the contract postal unit 

shall be subject to a closure determination by the Postal Service to decide whether 

a post office must be reopened within the area (delimited by the 2-mile radius referred to in subparagraph (A)). 

‘‘(ii) A decision under clause (i) not to reopen a post office may be appealed to the 

Postal Regulatory Commission under procedures which the Commission shall by 

regulation prescribe. Such procedures shall be based on paragraph (5), except that, 

for purposes of this clause, paragraph (5)(C) shall be applied by substituting ‘in violation of section 101(b), leaving postal patrons without effective and regular access 

to postal services’ for ‘unsupported by substantial evidence on the record’.’’. 

(3) APPLICABILITY.—The amendments made by this subsection shall not apply 

with respect to any appeal, notice of which is received by the Postal Regulatory 

Commission before the date of the enactment of this Act (determined applying 

the rules set forth in section 404(d)(6) of title 39, United States Code). 

(d) EXPEDITED PROCEDURES.— 

(1) IN GENERAL.—Section 3661 is amended by adding at the end the following: 

‘‘(d)(1) The Commission shall issue its opinion within 90 days after the receipt of 

any proposal (as referred to in subsection (b)) concerning— 

‘‘(A) the closing or consolidation of postal retail facilities (as that term is defined in section 102(2) of the Postal Reform Act of 2011) to a degree that will 

generally affect service on a nationwide or substantially nationwide basis; or 

‘‘(B) an identical or substantially identical proposal on which the Commission 

issued an opinion within the preceding 5 years. 

‘‘(2) If necessary in order to comply with the 90-day requirement under paragraph 

(1), the Commission may apply expedited procedures which the Commission shall 

by regulation prescribe.’’. 

(2) REGULATIONS.—The Postal Regulatory Commission shall prescribe any 

regulations necessary to carry out the amendment made by paragraph (1) within 90 days after the date of the enactment of this Act. 

(3) APPLICABILITY.—The amendment made by this subsection shall apply with 

respect to any proposal received by the Postal Regulatory Commission on or 

after the earlier of— 

(A) the 90th day after the date of the enactment of this Act; or 

(B) the effective date of the regulations under paragraph (2). 

SEC. 113. ENHANCED REPORTING ON POSTAL SERVICE EFFICIENCY. 

Section 3652(a) is amended— 

(1) in paragraph (1), by striking ‘‘and’’ after the semicolon; 

(2) in paragraph (2), by striking the period at the end and inserting ‘‘; and’’; 

and 

(3) by adding after paragraph (2) the following: 

‘‘(3) which shall provide the overall change in Postal Service productivity and 

the resulting effect of such change on overall Postal Service costs during such 

year, using such methodologies as the Commission shall by regulation prescribe.’’. 

SEC. 114. APPLICABILITY OF PROCEDURES RELATING TO CLOSURES AND CONSOLIDATIONS. 

(a) IN GENERAL.—Section 404(d) is amended by adding after paragraph (7) (as 

added by section 112(c)(2)) the following: 

‘‘(8) For purposes of this subsection, the term ‘post office’ means a post office and 

any other facility described in section 102(2) of the Postal Reform Act of 2011.’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall be effective 

with respect to any closure or consolidation, the proposed effective date of which occurs on or after the 60th day following the date of enactment of this Act. 

TITLE II—POSTAL SERVICE FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY 

Subtitle A—Establishment and Organization 

SEC. 201. PURPOSES. 

(a) PURPOSES.—The purposes of this title are as follows: 


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(1) To eliminate budget deficits and cash shortages of the Postal Service 

through strategic financial planning, sound budgeting, accurate revenue forecasts, and careful spending. 

(2) To ensure the universal service mandate detailed in section 101 of title 

39, United States Code, is maintained during a period of fiscal emergency. 

(3) To conduct necessary investigations and studies to determine the fiscal 

status and operational efficiency of the Postal Service. 

(4) To assist the Postal Service in— 

(A) restructuring its organization and workforce to bring expenses in line 

with diminishing revenue and generate sufficient profits for capital investment and repayment of debt; 

(B) meeting all fiscal obligations to the Treasury of the United States; 

and 

(C) ensuring the appropriate and efficient delivery of postal services. 

(5) To provide the Postal Service with a temporary increase in its borrowing 

authority to enable the Postal Service to complete necessary restructuring. 

(6) To ensure the long-term financial, fiscal, and economic vitality and operational efficiency of the Postal Service. 

(b) RESERVATION OF POWERS.—Nothing in this title may be construed— 

(1) to relieve any obligations existing as of the date of the enactment of this 

Act of the Postal Service to the Treasury of the United States; or 

(2) to limit the authority of Congress to exercise ultimate legislative authority 

over the Postal Service. 

SEC. 202. ESTABLISHMENT OF THE AUTHORITY. 

(a) ESTABLISHMENT.—There shall be established, upon the commencement of any 

control period, an entity to be known as the ‘‘Postal Service Financial Responsibility 

and Management Assistance Authority’’ (hereinafter in this title referred to as the 

‘‘Authority’’). 

(b) CONTROL PERIOD.— 

(1) COMMENCEMENT OF A CONTROL PERIOD.— 

(A) IN GENERAL.—For the purposes of this title, a control period commences whenever the Postal Service has been in default to the Treasury of 

the United States, with respect to any debts, obligations, loans, bonds, 

notes, or other form of borrowing, or any scheduled payments to any fund 

in the Treasury of the United States, for a period of at least 30 days. 

(B) ADVISORY PERIOD.—For purposes of the first control period, the Authority shall operate exclusively in an advisory period for two full fiscal 

years after the commencement of the control period. At the completion of 

the second full fiscal year or any year thereafter during the length of the 

control period, if the Postal Service’s annual deficit is greater than 

$2,000,000,000, the Authority shall be fully in force according to the provisions of this title. During an advisory period— 

(i) the Authority is not authorized to employ any staff and the Postal 

Service shall designate a Level-Two Postal Service Executive as a liaison with the members of the Authority; 

(ii) any provision of this title that requires the Authority or the Postal Service to take any action shall be considered only to take effect in 

the event the Authority comes into full force and that effective date 

shall be considered to be the date of the commencement of the control 

period for the purposes any provision not mention in this subparagraph; and 

(iii) the Postal Service shall have access to the funds available under 

section 222 according to applicable provisions of this Act, subject to the 

approval of the Postal Service Board of Governors without the approval 

of the Authority. 

(2) TREATMENT OF AUTHORITIES AND RESPONSIBILITIES OF THE BOARD OF GOVERNORS, ETC. DURING A CONTROL PERIOD.—During a control period— 

(A) all authorities and responsibilities of the Board of Governors, and the 

individual Governors, of the Postal Service under title 39, United States 

Code, and any other provision of law shall be assumed by the Authority; 

and 

(B) the Board of Governors, and the individual Governors, may act in an 

advisory capacity only. 

(3) TREATMENT OF CERTAIN POSTAL SERVICE EXECUTIVES DURING A CONTROL

PERIOD.— 

(A) DEFINITION.—For the purposes of this section, the term ‘‘Level-Two 

Postal Service Executive’’ includes the Postmaster General, the Deputy 


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Postmaster General, and all other officers or employees of the Postal Service in level two of the Postal Career Executive Service (or the equivalent). 

(B) TREATMENT.—Notwithstanding any other provision of law or employment contract, during a control period— 

(i) all Level-Two Postal Service Executives shall serve at the pleasure 

of the Authority; 

(ii) the duties and responsibilities of all Level-Two Postal Service Executives, as well as the terms and conditions of their employment (including their compensation), shall be subject to determination or redetermination by the Authority; 

(iii) total compensation of a Level-Two Postal Service Executive may 

not, for any year in such control period, exceed the annual rate of basic 

pay payable for level I of the Executive Schedule under section 5312 

of title 5, United States Code, for such year; for purposes of this clause, 

the term ‘‘total compensation’’ means basic pay, bonuses, awards, and 

all other monetary compensation; 

(iv) the percentage by which the rate of basic pay of a Level-Two 

Postal Service Executive is increased during any year in such control 

period may not exceed the percentage change in the Consumer Price 

Index for All Urban Consumers, unadjusted for seasonal variation, for 

the most recent 12-month period available, except that, in the case of 

a Level-Two Postal Service Executive who has had a significant change 

in job responsibilities, a greater change shall be allowable if approved 

by the Authority; 

(v) apart from basic pay, a Level-Two Postal Service Executive may 

not be afforded any bonus, award, or other monetary compensation for 

any fiscal year in the control period if expenditures of the Postal Service for such fiscal year exceeded revenues of the Postal Service for such 

fiscal year (determined in accordance with generally accepted accounting principles); and 

(vi) no deferred compensation may be paid, accumulated, or recognized in the case of any Level-Two Postal Service Executive, with respect to any year in a control period, which is not generally paid, accumulated, or recognized in the case of employees of the United States 

(outside of the Postal Service) in level I of the Executive Schedule 

under section 5312 of title 5, United States Code, with respect to such 

year. 

(C) BONUS AUTHORITY.—Section 3686 of title 39, United States Code, 

shall, during the period beginning on the commencement date of the control 

period and ending on the termination date of the control period— 

(i) be suspended with respect to all Level-Two Postal Service Executives; but 

(ii) remain in effect for all other officers and employees of the Postal 

Service otherwise covered by this section. 

(4) TERMINATION OF A CONTROL PERIOD.—Subject to subtitle D, a control period terminates upon certification by the Authority, with the concurrence of the 

Secretary of the Treasury and the Director of the Office of Personnel Management, that— 

(A) for 2 consecutive fiscal years (occurring after the date of the enactment of this Act), expenditures of the Postal Service did not exceed revenues of the Postal Service (as determined in accordance with generally accepted accounting principles); 

(B) the Authority has approved a Postal Service financial plan and budget that shows expenditures of the Postal Service not exceeding revenues of 

the Postal Service (as so determined) for the fiscal year to which such budget pertains and each of the next 3 fiscal years; and 

(C) the Postal Service financial plan and budget (as referred to in subparagraph (B)) includes plans— 

(i) for the repayment of any supplementary debt under section 222, 

in equal annual installments over a period of not more than 5 years; 

and 

(ii) to properly fund Postal Service pensions and retiree health benefits in accordance with law. 

SEC. 203. MEMBERSHIP AND QUALIFICATION REQUIREMENTS. 

(a) MEMBERSHIP.— 

(1) IN GENERAL.—The Authority shall consist of 5 members appointed by the 

President who meet the qualifications described in subsection (b), except that 


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the Authority may take any action under this title at any time after the President has appointed 4 of its members. 

(2) RECOMMENDATIONS.—Of the 5 members so appointed— 

(A) 1 shall be appointed from among individuals recommended by the 

Speaker of the House of Representatives; 

(B) 1 shall be appointed from among individuals recommended by the majority leader of the Senate; 

(C) 1 shall be appointed from among individuals recommended by the minority leader of the House of Representatives; 

(D) 1 shall be appointed from among individuals recommended by the minority leader of the Senate; and 

(E) 1 shall be appointed from among individuals recommended by the 

Comptroller General. 

(3) POLITICAL AFFILIATION.—No more than 3 members of the Authority may 

be of the same political party. 

(4) CHAIR.—The President shall designate 1 of the members of the Authority 

as the Chair of the Authority. 

(5) SENSE OF CONGRESS REGARDING DEADLINE FOR APPOINTMENT.—It is the 

sense of Congress that the President should appoint the members of the Authority as soon as practicable after the date on which a control period commences, 

but no later than 30 days after such date. 

(6) TERM OF SERVICE.— 

(A) IN GENERAL.—Except as provided in subparagraph (B), each member 

of the Authority shall be appointed for a term of 3 years. 

(B) APPOINTMENT FOR TERM FOLLOWING INITIAL TERM.—As designated by 

the President at the time of appointment for the term immediately following the initial term, of the members appointed for the term immediately 

following the initial term— 

(i) 1 member shall be appointed for a term of 1 year; 

(ii) 2 members shall be appointed for a term of 2 years; and 

(iii) 2 members shall be appointed for a term of 3 years. 

(C) REMOVAL.—The President may remove any member of the Authority 

only for cause. 

(D) NO COMPENSATION FOR SERVICE.—Members of the Authority shall 

serve without pay, but may receive reimbursement for any reasonable and 

necessary expenses incurred by reason of service on the Authority. 

(b) QUALIFICATION REQUIREMENTS.— 

(1) IN GENERAL.—An individual meets the qualifications for membership on 

the Authority if the individual— 

(A) has significant knowledge and expertise in finance, management, and 

the organization or operation of businesses having more than 500 employees; and 

(B) represents the public interest generally, is not a representative of specific interests using or belonging to the Postal Service, and does not have 

any business or financial interest in any enterprise in the private sector of 

the economy engaged in the delivery of mail matter. 

(2) SPECIFIC CONDITIONS.—An individual shall not be considered to satisfy 

paragraph (1)(B) if, at any time during the 5-year period ending on the date 

of appointment, such individual— 

(A) has been an officer, employee, or private contractor with the Postal 

Service or the Postal Regulatory Commission; or 

(B) has served as an employee or contractor of a labor organization representing employees of the Postal Service or the Postal Regulatory Commission. 

SEC. 204. ORGANIZATION. 

(a) ADOPTION OF BY-LAWS FOR CONDUCTING BUSINESS.—As soon as practicable 

after the appointment of its members, the Authority shall adopt by-laws, rules, and 

procedures governing its activities under this title, including procedures for hiring 

experts and consultants. Upon adoption, such by-laws, rules, and procedures shall 

be submitted by the Authority to the Postmaster General, the President, and Congress. 

(b) CERTAIN ACTIVITIES REQUIRING APPROVAL OF MAJORITY OF MEMBERS.—Under 

its by-laws, the Authority may conduct its operations under such procedures as it 

considers appropriate, except that an affirmative vote of a majority of the members 

of the Authority shall be required in order for the Authority to— 

(1) approve or disapprove a financial plan and budget as described by subtitle 

C; 


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(2) implement recommendations on financial stability and management responsibility under section 226; 

(3) take any action under authority of section 202(b)(3)(B)(i); or 

(4) initiate the establishment of a new workers’ compensation system for the 

Postal Service in accordance with section 311. 

SEC. 205. EXECUTIVE DIRECTOR AND STAFF. 

(a) EXECUTIVE DIRECTOR.—The Authority shall have an Executive Director who 

shall be appointed by the Chair with the consent of the Authority. The Executive 

Director shall be paid at a rate determined by the Authority, except that such rate 

may not exceed the rate of basic pay payable for level IV of the Executive Schedule 

under section 5315 of title 5, United States Code. 

(b) STAFF.—With the approval of the Authority, the Executive Director may appoint and fix the pay of such additional personnel as the Executive Director considers appropriate, except that no individual appointed by the Executive Director 

may be paid at a rate greater than the rate of pay for the Executive Director. Personnel appointed under this subsection shall serve at the pleasure of the Executive 

Director. 

(c) INAPPLICABILITY OF CERTAIN CIVIL SERVICE LAWS.—The Executive Director 

and staff of the Authority may be appointed without regard to the provisions of title 

5, United States Code, governing appointments in the competitive service, and paid 

without regard to the provisions of chapter 51 and subchapter III of chapter 53 of 

such title relating to classification and General Schedule pay rates. 

(d) STAFF OF FEDERAL AGENCIES.—Upon request of the Chair, the head of any 

Federal department or agency may detail, on a reimbursable or nonreimbursable 

basis, any of the personnel of such department or agency to the Authority to assist 

it in carrying out its duties under this title. 

SEC. 206. FUNDING. 

(a) IN GENERAL.—There are authorized to be appropriated, out of the Postal Service Fund, such sums as may be necessary for the Authority. In requesting an appropriation under this section for a fiscal year, the Authority shall prepare and submit 

to the Congress under section 2009 of title 39, United States Code, a budget of the 

Authority’s expenses, including expenses for facilities, supplies, compensation, and 

employee benefits not to exceed $10,000,000. In years in which a control period commences, the Authority shall submit a budget within 30 days of the appointment of 

the members of the Authority. 

(b) AMENDMENT TO SECTION 2009.—Section 2009 is amended in the next to last 

sentence— 

(1) by striking ‘‘, and (3)’’ and inserting ‘‘, (3)’’; and 

(2) by striking the period and inserting ‘‘, and (4) the Postal Service Financial 

Responsibility and Management Assistance Authority requests to be appropriated, out of the Postal Service Fund, under section 206 of the Postal Reform 

Act of 2011.’’. 

Subtitle B—Powers of the Authority 

SEC. 211. POWERS. 

(a) POWERS OF MEMBERS AND AGENTS.—Any member or agent of the Authority 

may, if authorized by the Authority, take any action which the Authority is authorized by this section to take. 

(b) OBTAINING OFFICIAL DATA FROM THE POSTAL SERVICE.—Notwithstanding any 

other provision of law, the Authority may secure copies of such records, documents, 

information, or data from any entity of the Postal Service necessary to enable the 

Authority to carry out its responsibilities under this title. At the request of the Authority, the Authority shall be granted direct access to such information systems, 

records, documents, information, or data as will enable the Authority to carry out 

its responsibilities under this title. The head of the relevant entity of the Postal 

Service shall provide the Authority with such information and assistance (including 

granting the Authority direct access to automated or other information systems) as 

the Authority requires under this subsection. 

(c) GIFTS, BEQUESTS, AND DEVISES.—The Authority may accept, use, and dispose 

of gifts, bequests, or devises of services or property, both real and personal, for the 

purpose of aiding or facilitating the work of the Authority. Gifts, bequests, or devises of money and proceeds from sales of other property received as gifts, bequests, 

or devises shall be deposited in such account as the Authority may establish and 

shall be available for disbursement upon order of the Chair. 


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(d) ADMINISTRATIVE SUPPORT SERVICES.—Upon the request of the Authority, the 

Administrator of General Services may provide to the Authority, on a reimbursable 

basis, the administrative support services necessary for the Authority to carry out 

its responsibilities under this title. 

(e) AUTHORITY TO ENTER INTO CONTRACTS.—The Executive Director may enter 

into such contracts as the Executive Director considers appropriate (subject to the 

approval of the Chair) to carry out the Authority’s responsibilities under this title. 

(f) CIVIL ACTIONS TO ENFORCE POWERS.—The Authority may seek judicial enforcement of its authority to carry out its responsibilities under this title. 

(g) PENALTIES.— (1) ADMINISTRATIVE DISCIPLINE.—Any officer or employee of the Postal Service 

who, by action or inaction, fails to comply with any directive or other order of 

the Authority under section 226(c) shall be subject to appropriate administrative discipline, including suspension from duty without pay or removal from office, by order of either the Postmaster General or the Authority. 

(2) REPORTING REQUIREMENT.—Whenever an officer or employee of the Postal 

Service takes or fails to take any action which is noncompliant with any directive or other order of the Authority under section 226(c), the Postmaster General shall immediately report to the Authority all pertinent facts, together with 

a statement of any actions taken by the Postmaster General or proposed by the 

Postmaster General to be taken under paragraph (1). 

(h) SENSE OF CONGRESS.—It is the sense of Congress that, in making determinations that affect prior collective bargaining agreements and prior agreements on 

workforce reduction, any rightsizing effort within the Postal Service that results in 

a decrease in the number of postal employees should ensure that such employees 

can receive their full pensions, are fully compensated, and that the collective bargaining agreements and prior agreements on workforce reduction that they entered 

into with Postal Service management are fully honored. 

SEC. 212. EXEMPTION FROM LIABILITY FOR CLAIMS. 

The Authority and its members may not be liable for any obligation of or claim 

against the Postal Service resulting from actions taken to carry out this title. 

SEC. 213. TREATMENT OF ACTIONS ARISING UNDER THIS TITLE. 

(a) JURISDICTION ESTABLISHED IN UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT.—A person (including the Postal Service) adversely 

affected or aggrieved by an order or decision of the Authority may, within 30 days 

after such order or decision becomes final, institute proceedings for review thereof 

by filing a petition in the United States Court of Appeals for the District of Columbia Circuit. The court shall review the order or decision in accordance with section 

706 of title 5, United States Code, and chapter 158 and section 2112 of title 28, 

United States Code. Judicial review shall be limited to the question of whether the 

Authority acted in excess of its statutory authority, and determinations of the Authority with respect to the scope of its statutory authority shall be upheld if based 

on a permissible construction of the statutory authority. 

(b) PROMPT APPEAL TO THE SUPREME COURT.—Notwithstanding any other provision of law, review by the Supreme Court of the United States of a decision of the 

Court of Appeals which is issued pursuant to subsection (a) may be had only if the 

petition for such review is filed within 10 days after the entry of such decision. 

(c) TIMING OF RELIEF.—No order of any court granting declaratory or injunctive 

relief against the Authority, including relief permitting or requiring the obligation, 

borrowing, or expenditure of funds, shall take effect during the pendency of the action before such court, during the time appeal may be taken, or (if appeal is taken) 

during the period before the court has entered its final order disposing of such action. 

(d) EXPEDITED CONSIDERATION.—It shall be the duty of the United States Court 

of Appeals for the District of Columbia and the Supreme Court of the United States 

to advance on the docket and to expedite to the greatest possible extent the disposition of any matter brought under subsection (a). 

SEC. 214. DELIVERY POINT MODERNIZATION. 

(a) DEFINITIONS.—For purposes of this section— 

(1) the term ‘‘delivery point’’ means a mailbox or other receptacle to which 

mail is delivered; 

(2) the term ‘‘primary mode of delivery’’ means the typical method by which 

the Postal Service delivers letter mail to the delivery point of a postal patron; 

(3) the term ‘‘door delivery’’ means a primary mode of mail delivery whereby 

mail is placed into a slot or receptacle at or near the postal patron’s door or 

is hand delivered to a postal patron, but does not include curbside or centralized 

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(4) the term ‘‘centralized delivery’’ means a primary mode of mail delivery 

whereby mail receptacles are grouped or clustered at a single location; and 

(5) the term ‘‘curbside delivery’’ means a primary mode of mail delivery 

whereby a mail receptacle is situated at the edge of a roadway or curb. 

(b) REDUCTION IN TOTAL NUMBER OF DELIVERY POINTS.—The Authority shall, during the first control period commencing under this title, take such measures as may 

be necessary and appropriate so that— 

(1) in each fiscal year beginning at least 2 years after the commencement date 

of such first control period— 

(A) the total number of delivery points for which door delivery is the primary mode of mail delivery does not exceed 25 percent of the corresponding 

number for the fiscal year last ending before such commencement date; and 

(B) the total annual costs attributable to door delivery, centralized delivery, and curbside delivery combined will be at least $3,500,000,000 less 

than the corresponding total annual costs for the fiscal year last ending before such commencement date; and 

(2) in each fiscal year beginning at least 4 years after the commencement date 

of such first control period, the total number of delivery points for which door 

delivery is the primary mode of mail delivery does not exceed 10 percent of the 

corresponding number for the fiscal year last ending before such commencement 

date. 

In making any decision under this subsection involving the continuation or termination of door delivery with respect to any locality or addresses within a locality, 

the Authority shall consider rates of poverty, population density, historical value, 

whether such locality is in a registered historic district (as that term is defined in 

section 47(c)(3)(B) of the Internal Revenue Code of 1986), whether such address is 

another place on the National Register of Historic Places, and other appropriate factors. 

(c) ORDER OF PRECEDENCE.—In order to carry out subsection (b)— 

(1) in making conversions from door delivery to other primary modes of delivery— 

(A) conversion shall be to centralized delivery; except 

(B) if subparagraph (A) is impractical, conversion shall be to curbside delivery; and 

(2) in the case of delivery points established after the commencement date of 

the first control period under this title— 

(A) centralized delivery shall be the primary mode of delivery; except 

(B) if subparagraph (A) is impractical, curbside delivery shall be the primary mode of delivery. 

(d) WAIVER FOR PHYSICAL HARDSHIP.—The Postal Service shall establish and 

maintain a waiver program under which, upon application, door delivery may be 

continued or provided in any case in which— 

(1) centralized or curbside delivery would, but for this subsection, otherwise 

be the primary mode of delivery; and 

(2) door delivery is necessary in order to avoid causing significant physical 

hardship to a postal patron. 

(e) CENTRALIZED DELIVERY PLACEMENT.—It is the sense of the Congress that the 

Postal Service should negotiate with State and local governments, businesses, local 

associations, and property owners to place centralized delivery units in locations 

that maximize delivery efficiency, ease of use for postal patrons, and respect for private property rights. 

(f) VOUCHER PROGRAM.— 

(1) IN GENERAL.—The Postal Service may, in accordance with such standards 

and procedures as the Postal Service shall by regulation prescribe, provide for 

a voucher program under which— 

(A) upon application, the Postal Service may defray all or any portion of 

the costs associated with conversion from door delivery under this section 

which would otherwise be borne by postal patrons; and 

(B) the Postal Service Competitive Products Fund is made available for 

that purpose. 

(2) CONFORMING AMENDMENT.—Section 2011(a)(2) is amended— 

(A) in subparagraph (A), by striking ‘‘and’’ after the semicolon; 

(B) in subparagraph (B), by striking the period and inserting ‘‘; and’’; and 

(C) by adding at the end the following: 

‘‘(C) vouchers under the program described in section 214(f)(1) of the Postal 

Reform Act of 2011.’’. 

(g) AUDITS.— 

(1) IN GENERAL.—The Inspector General of the United States Postal Service— 


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(A) shall conduct an annual audit to determine whether the Postal Service is in compliance with the requirements of subsection (b); and 

(B) shall make such recommendations as the Inspector General considers 

appropriate to improve the administration of such subsection. 

(2) SUBMISSION.—The audit and recommendations under paragraph (1) shall 

be submitted by the Inspector General to— 

(A) the Committee on Oversight and Government Reform of the House of 

Representatives; and 

(B) the Committee on Homeland Security and Governmental Affairs of 

the Senate. 

(3) INFORMATION.—Upon request, the Postal Service shall furnish such information as the Inspector General may require in order to carry out this subsection. 

(h) SAVINGS REPORT.— (1) IN GENERAL.—In the event that a reduction in door delivery points is required under this section, the Authority shall submit a report to Congress, not 

later than 1 year after the date on which such reductions commence, describing 

the cost savings realized to the date of such submission and the estimated additional cost savings anticipated as a result of such reductions occurring after 

such submission. The report shall include— 

(A) the measures taken to achieve the realized savings and the assumptions and methodologies used to compute the estimated cost savings; and 

(B) information with respect to what additional measures might be necessary to achieve the cost savings required under this section. 

(2) REDUCTION LIMITATION.—Notwithstanding any other provision of this Act, 

if the Authority determines that the measures described pursuant to subparagraphs (A) and (B) of paragraph (1) are not feasible, not cost effective, or otherwise detrimental to the mail delivery policy of the Postal Service, the Authority 

shall submit a report to Congress stating any legislative changes recommended 

for door delivery modernization procedures under this section, including increasing flexibility of this section’s requirements or the postponement of further conversion. 

Subtitle C—Establishment and Enforcement of 

Financial Plan and Budget for the Postal Service 

SEC. 221. DEVELOPMENT OF FINANCIAL PLAN AND BUDGET FOR THE POSTAL SERVICE. 

(a) DEVELOPMENT OF FINANCIAL PLAN AND BUDGET.—For each fiscal year for 

which the Postal Service is in a control period, the Postmaster General shall develop 

and submit to the Authority a financial plan and budget for the Postal Service in 

accordance with this section. 

(b) CONTENTS OF FINANCIAL PLAN AND BUDGET.—A financial plan and budget for 

the Postal Service for a fiscal year shall specify the budget for the Postal Service 

as required by section 2009 of title 39, United States Code, for the applicable fiscal 

year and the next 3 fiscal years, in accordance with the following requirements: 

(1) The financial plan and budget shall meet the requirements described in 

subsection (c) to promote the financial stability of the Postal Service. 

(2) The financial plan and budget shall— 

(A) include the Postal Service’s annual budget program (under section 

2009 of title 39, United States Code) and the Postal Service’s plan commonly referred to as its ‘‘Integrated Financial Plan’’; 

(B) describe lump-sum expenditures by all categories traditionally used 

by the Postal Service; 

(C) describe capital expenditures (together with a schedule of projected 

capital commitments and cash outlays of the Postal Service and proposed 

sources of funding); 

(D) contain estimates of overall debt (both outstanding and anticipated to 

be issued); and 

(E) contain cash flow and liquidity forecasts for the Postal Service at such 

intervals as the Authority may require. 

(3) The financial plan and budget shall include a statement describing methods of estimations and significant assumptions. 

(4) The financial plan and budget shall include any other provisions and shall 

meet such other criteria as the Authority considers appropriate to meet the purposes of this title, including provisions for— 

(A) changes in personnel policies and levels for each component of the 

Postal Service; and 


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(B) management initiatives to promote productivity, improvement in the 

delivery of services, or cost savings. 

(c) REQUIREMENTS TO PROMOTE FINANCIAL STABILITY.— 

(1) IN GENERAL.—The requirements to promote the financial stability of the 

Postal Service applicable to the financial plan and budget for a fiscal year are 

as follows: 

(A) In each fiscal year (following the first full fiscal year) in a control period, budgeted expenditures of the Postal Service for the fiscal year involved 

may not exceed budgeted revenues of the Postal Service for the fiscal year 

involved. 

(B) In each fiscal year in a control period, the Postal Service shall make 

continuous, substantial progress towards long-term fiscal solvency and shall 

have substantially greater net income than in the previous fiscal year. 

(C) The Postal Service shall provide for the orderly liquidation of any supplementary debt under section 222. 

(D) The financial plan and budget shall assure the continuing long-term 

financial stability of the Postal Service, as indicated by factors such as the 

efficient management of the Postal Service’s workforce and the effective 

provision of services by the Postal Service. 

(2) APPLICATION OF SOUND BUDGETARY PRACTICES.—In meeting the requirement described in paragraph (1) with respect to a financial plan and budget for 

a fiscal year, the Postal Service shall apply sound budgetary practices, including 

reducing costs and other expenditures, improving productivity, increasing revenues, or a combination of such practices. 

(3) ASSUMPTIONS BASED ON CURRENT LAW.—In meeting the requirements described in paragraph (1) with respect to a financial plan and budget for a fiscal 

year, the Postal Service shall base estimates of revenues and expenditures on 

Federal law as in effect at the time of the preparation of such financial plan 

and budget. 

SEC. 222. SUPPLEMENTARY BORROWING AUTHORITY DURING A CONTROL PERIOD. 

(a) IN GENERAL.—Upon the commencement of a control period, subject to the approval of the Authority, the Postal Service is authorized to borrow money and issue 

and sell such obligations as may be necessary to carry out the purposes of this title, 

to the same extent, in the same manner, and subject to the same terms and conditions as if the maximum amount allowable under the provisions of section 2005(a)(2) 

of title 39, United States Code, for the fiscal year involved were equal to the maximum amount which (but for this section) would otherwise be allowable under such 

provisions, increased by $10,000,000,000. The authorization to issue obligations 

under this section shall extend for a period of not more than 10 years beginning 

on the date of commencement of a control period, as described in section 202(b). At 

the end of such a 10-year period, the Postal Service shall dispose of real property 

of the Postal Service generating sufficient proceeds to repay any outstanding obligation incurred under this subsection in its entirety. 

(b) EXCLUSION.—The last sentence of section 2005(a)(1) of title 39, United States 

Code, shall not apply with respect to any amounts borrowed or obligations issued 

or sold under authority of this section (which, but for subsection (a), would not otherwise have been allowable). 

(c) DEPOSIT.—Any amounts received under this section shall be deposited in the 

Postal Service Fund. 

(d) COLLATERAL.—For the purposes of funds acquired under subsection (a), the 

Postal Service shall provide an appropriate level of collateral in the form of pledged 

Postal Service property assets. For each fiscal year in which there remain funds 

made available to the Postal Service under subsection (a), the Postal Service shall 

dispose of real property equal to an amount that is at least 10 percent of the total 

funds obligated by the Postal Service under subsection (a), and the proceeds of such 

disposal shall be used to repay any outstanding obligation made by the Postal Service under subsection (a) in its entirety. 

SEC. 223. PROCESS FOR SUBMISSION AND APPROVAL OF FINANCIAL PLAN AND BUDGET. 

(a) IN GENERAL.—For each fiscal year for which the Postal Service is in a control 

period, the Postmaster General shall submit to the Authority— 

(1) by February 1 before the start of such fiscal year, a preliminary financial 

plan and budget under section 221 for such fiscal year; and 

(2) by August 1 before the start of such fiscal year, a final financial plan and 

budget under section 221 for such fiscal year. 

(b) REVIEW BY AUTHORITY.—Upon receipt of a financial plan and budget under 

subsection (a) (whether preliminary or final), the Authority shall promptly review 

such financial plan and budget. In conducting the review, the Authority may request 


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any additional information it considers necessary and appropriate to carry out its 

duties under this subtitle. 

(c) APPROVAL OF POSTMASTER GENERAL’S FINANCIAL PLAN AND BUDGET.— (1) IN GENERAL.—If the Authority determines that the final financial plan and 

budget for the fiscal year submitted by the Postmaster General under subsection (a) meets the requirements of section 221— 

(A) the Authority shall approve the financial plan and budget and shall 

provide the Postmaster General, the President, and Congress with a notice 

certifying its approval; and 

(B) the Postmaster General shall promptly submit the annual budget program to the Office of Management and Budget pursuant to section 2009 of 

title 39, United States Code. 

(2) DEEMED APPROVAL AFTER 30 DAYS.— (A) IN GENERAL.—If the Authority has not provided the Postmaster General, the President, and Congress with a notice certifying approval under 

paragraph (1)(A) or a statement of disapproval under subsection (d) before 

the expiration of the 30-day period which begins on the date the Authority 

receives the financial plan and budget from the Postmaster General under 

subsection (a), the Authority shall be deemed to have approved the financial 

plan and budget and to have provided the Postmaster General, the President, and Congress with the notice certifying approval under paragraph 

(1)(A). 

(B) EXPLANATION OF FAILURE TO RESPOND.—If subparagraph (A) applies 

with respect to a financial plan and budget, the Authority shall provide the 

Postmaster General, the President and Congress with an explanation for its 

failure to provide the notice certifying approval or the statement of disapproval during the 30-day period described in such subparagraph. 

(d) DISAPPROVAL OF POSTMASTER GENERAL’S BUDGET.—If the Authority determines that the final financial plan and budget for the fiscal year submitted by the 

Postmaster General under subsection (a) does not meet the requirements applicable 

under section 221, the Authority shall disapprove the financial plan and budget, and 

shall provide the Postmaster General, the President, and Congress with a statement 

containing— 

(1) the reasons for such disapproval; 

(2) the amount of any shortfall in the budget or financial plan; and 

(3) any recommendations for revisions to the budget the Authority considers 

appropriate to ensure that the budget is consistent with the financial plan and 

budget. 

(e) AUTHORITY REVIEW OF POSTMASTER GENERAL’S REVISED FINAL FINANCIAL

PLAN AND BUDGET.— 

(1) SUBMISSION OF POSTMASTER GENERAL’S REVISED FINAL FINANCIAL PLAN AND

BUDGET.—Not later than 15 days after receiving the statement from the Authority under subsection (d), the Postmaster General shall promptly adopt a revised 

final financial plan and budget for the fiscal year which addresses the reasons 

for the Authority’s disapproval cited in the statement, and shall submit such 

financial plan and budget to the Authority. 

(2) APPROVAL OF POSTMASTER GENERAL’S REVISED FINAL FINANCIAL PLAN AND

BUDGET.—If, after reviewing the revised final financial plan and budget for a 

fiscal year submitted by the Postmaster General under paragraph (1) in accordance with the procedures described in this section, the Authority determines 

that the revised final financial plan and budget meets the requirements applicable under section 221— 

(A) the Authority shall approve the financial plan and budget and shall 

provide the Postmaster General, the President, and Congress with a notice 

certifying its approval; and 

(B) the Postmaster General shall promptly submit the annual budget program to the Office of Management and Budget pursuant to section 2009 of 

title 39, United States Code. 

(3) DISAPPROVAL OF POSTMASTER GENERAL’S REVISED FINAL FINANCIAL PLAN

AND BUDGET.— 

(A) IN GENERAL.—If, after reviewing the revised final financial plan and 

budget for a fiscal year submitted by the Postmaster General under paragraph (1) in accordance with the procedures described in this subsection, 

the Authority determines that the revised final financial plan and budget 

does not meet the applicable requirements under section 221, the Authority 

shall— 

(i) disapprove the financial plan and budget; 

(ii) provide the Postmaster General, the President, and Congress 

with a statement containing the reasons for such disapproval and deVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00021 Fmt 6659 Sfmt 6621 E:\HR\OC\HR363P1.XXX HR363P1

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scribing the amount of any shortfall in the financial plan and budget; 

and 

(iii) approve and recommend a financial plan and budget for the Postal Service which meets the applicable requirements under section 221, 

and submit such financial plan and budget to the Postmaster General, 

the President, and Congress. 

(B) SUBMISSION TO OMB.—Upon receipt of the recommended financial 

plan and budget under subparagraph (A)(iii), the Postmaster General shall 

promptly submit the recommended annual budget program to the Office of 

Management and Budget pursuant to section 2009 of title 39, United States 

Code. 

(4) DEEMED APPROVAL AFTER 15 DAYS.— 

(A) IN GENERAL.—If the Authority has not provided the Postmaster General, the President, and Congress with a notice certifying approval under 

paragraph (2)(A) or a statement of disapproval under paragraph (3) before 

the expiration of the 15-day period which begins on the date the Authority 

receives the revised final financial plan and budget submitted by the Postmaster General under paragraph (1), the Authority shall be deemed to have 

approved the revised final financial plan and budget and to have provided 

the Postmaster General, the President, and Congress with the notice certifying approval described in paragraph (2)(A). 

(B) EXPLANATION OF FAILURE TO RESPOND.—If subparagraph (A) applies 

with respect to a financial plan and budget, the Authority shall provide the 

Postmaster General, the President and Congress with an explanation for its 

failure to provide the notice certifying approval or the statement of disapproval during the 15-day period described in such subparagraph. 

(f) DEADLINE FOR TRANSMISSION OF FINANCIAL PLAN AND BUDGET BY AUTHOR- ITY.—Notwithstanding any other provision of this section, not later than September 

30th before each fiscal year which is in a control period, the Authority shall— 

(1) provide Congress with a notice certifying its approval of the Postmaster 

General’s initial financial plan and budget for the fiscal year under subsection 

(c); 

(2) provide Congress with a notice certifying its approval of the Postmaster 

General’s revised final financial plan and budget for the fiscal year under subsection (e)(2); or 

(3) submit to Congress an approved and recommended financial plan and 

budget of the Authority for the Postal Service for the fiscal year under subsection (e)(3)(A)(iii). 

(g) REVISIONS TO FINANCIAL PLAN AND BUDGET.— 

(1) PERMITTING POSTMASTER GENERAL TO SUBMIT REVISIONS.—The Postmaster 

General may submit proposed revisions to the financial plan and budget for a 

control period to the Authority at any time during the year. 

(2) PROCESS FOR REVIEW, APPROVAL, DISAPPROVAL, AND POSTMASTER GENERAL

ACTION.—Except as provided in paragraph (3), the procedures described in subsections (b), (c), (d), and (e) shall apply with respect to a proposed revision to 

a financial plan and budget in the same manner as such procedures apply with 

respect to the original financial plan and budget. 

(3) EXCEPTION FOR REVISIONS NOT AFFECTING SPENDING.—To the extent that 

a proposed revision to a financial plan and budget adopted by the Postmaster 

General pursuant to this subsection does not increase the amount of spending 

with respect to any account of the Postal Service, the revision shall become effective upon the Authority’s approval of such revision. 

SEC. 224. RESPONSIBILITIES OF THE AUTHORITY. 

(a) IN GENERAL.—The Authority shall direct the exercise of the powers of the 

Postal Service, including— 

(1) determining its overall strategies (both long-term and short-term); 

(2) determining its organizational structure, particularly for senior management at the level of vice president and higher; 

(3) hiring, monitoring, compensating, and, when necessary, replacing senior 

management at the level of vice president and higher, as well as ensuring adequate succession planning for these positions; 

(4) approving major policies, particularly those that have an important effect 

on the Postal Service’s financial position and the provision of universal postal 

service; 

(5) approving corporate budgets, financial and capital plans, operational and 

service performance standards and targets, human resources strategies, collective bargaining strategies, negotiation parameters, and collective bargaining 

agreements, and the compensation structure for nonbargaining employees; 


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(6) approving substantial capital projects and any substantial disposition of 

capital assets, such as surplus property; 

(7) approving changes in rates and classifications, new products and services, 

policy regarding other substantial matters before the Postal Regulatory Commission, and any appeals of its decisions or orders to the Federal courts; 

(8) approving the Postal Service Annual Report, Annual Comprehensive 

Statement, and strategic plans, performance plans, and performance program 

reports under chapter 28 of title 39, United States Code; 

(9) formulating and communicating organizational policy and positions on legislative and other public policy matters to Congress and the public; 

(10) ensuring organizational responsiveness to oversight by Congress, the 

Postal Regulatory Commission, the Treasury of the United States, and other 

audit entities; 

(11) ensuring adequate internal controls and selecting, monitoring, and compensating an independent public accounting firm to conduct an annual audit of 

the Postal Service; and 

(12) carrying out any responsibility, not otherwise listed in this subsection, 

that was the responsibility of the Board of Governors at any time during the 

5-year period ending on the date of the enactment of this Act. 

(b) REVIEW OF POSTAL SERVICE PROPOSALS.— 

(1) SUBMISSION OF POSTAL SERVICE PROPOSALS TO THE AUTHORITY.—During a 

control period, the Postmaster General shall submit to the Authority any proposal that has a substantial effect on any item listed in subsection (a). 

(2) PROMPT REVIEW BY AUTHORITY.—Upon receipt of a proposal from the Postmaster General under paragraph (1), the Authority shall promptly review the 

proposal to determine whether it is consistent with the applicable financial plan 

and budget approved under this title. 

(3) ACTIONS BY AUTHORITY.— 

(A) APPROVAL.—If the Authority determines that a proposal is consistent 

with the applicable financial plan and budget, the Authority shall notify the 

Postmaster General that it approves the proposal. 

(B) FINDING OF INCONSISTENCY.—If the Authority determines that a proposal is significantly inconsistent with the applicable financial plan and 

budget, the Authority shall— 

(i) notify the Postmaster General of its finding; 

(ii) provide the Postmaster General with an explanation of the reasons for its finding; and 

(iii) to the extent the Authority considers appropriate, provide the 

Postmaster General with recommendations for modifications to the proposal. 

(4) DEEMED APPROVAL.—If the Authority does not notify the Postmaster General that it approves or disapproves a proposal submitted under this subsection 

during the 7-day period which begins on the date the Postmaster General submits the proposal to the Authority, the Authority shall be deemed to have approved the proposal in accordance with paragraph (3)(A). At the option of the 

Authority, the previous sentence shall be applied as if the reference in such sentence to ‘‘7-day period’’ were a reference to ‘‘14-day period’’ if, during the 7-day 

period referred to in the preceding sentence, the Authority so notifies the Postmaster General. 

(c) EFFECT OF APPROVED FINANCIAL PLAN AND BUDGET ON CONTRACTS AND

LEASES.— 

(1) MANDATORY PRIOR APPROVAL FOR CERTAIN CONTRACTS AND LEASES.— 

(A) IN GENERAL.—In the case of a contract or lease described in subparagraph (B) which is proposed to be entered into, renewed, modified, or extended by the Postal Service during a control period, the Postmaster General (or the appropriate officer or agent of the Postal Service) shall submit 

the proposed contract or lease to the Authority. The Authority shall review 

each contract or lease submitted under this subparagraph, and the Postmaster General (or the appropriate officer or agent of the Postal Service) 

may not enter into the contract or lease unless the Authority determines 

that the proposed contract or lease is consistent with the financial plan and 

budget for the fiscal year. 

(B) CONTRACTS AND LEASES DESCRIBED.—A contract or lease described in 

this subparagraph is— 

(i) a labor contract entered into through collective bargaining; or 

(ii) such other type of contract or lease as the Authority may specify 

for purposes of this subparagraph. 

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(A) IN GENERAL.—In addition to the prior approval of certain contracts 

and leases, the Postal Service shall submit to the Authority— 

(i) any Level-Two Post Career Executive Service employee contract 

that is in effect during a control period; and 

(ii) any collective bargaining agreement entered into by the Postal 

Service that is in effect during a control period. 

Any such contract or agreement shall be submitted to the Authority upon 

the commencement of a control period and at such other times as the Authority may require. 

(B) REVIEW BY AUTHORITY.—The Authority shall review each contract 

submitted under subparagraph (A) to determine if the contract is consistent 

with the financial plan and budget for the fiscal year. If the Authority determines that the contract is not consistent with the financial plan and 

budget, the Authority shall take such actions as are within the Authority’s 

powers to revise the contract. 

SEC. 225. EFFECT OF FINDING NONCOMPLIANCE WITH FINANCIAL PLAN AND BUDGET. 

(a) SUBMISSION OF REPORTS.—Not later than 30 days after the expiration of each 

quarter of each fiscal year beginning in a control period, the Postmaster General 

shall submit reports to the Authority describing the actual revenues obtained and 

expenditures made by the Postal Service during the quarter with its cash flows during the quarter, and comparing such actual revenues, expenditures, and cash flows 

with the most recent projections for these items. 

(b) ADDITIONAL INFORMATION.—If the Authority determines, based on reports submitted by the Postmaster General under subsection (a), independent audits, or such 

other information as the Authority may obtain, that the revenues or expenditures 

of the Postal Service during a control period are not consistent with the financial 

plan and budget for the year, the Authority shall require the Postmaster General 

to provide such additional information as the Authority determines to be necessary 

to explain the inconsistency. 

(c) CERTIFICATION OF VARIANCE.— 

(1) IN GENERAL.—After requiring the Postmaster General to provide additional information under subsection (b), the Authority shall certify to the Postmaster General, the President, the Secretary of the Treasury, and Congress 

that the Postal Service is at variance with the financial plan and budget unless— 

(A) the additional information provides an explanation for the inconsistency which the Authority finds reasonable and appropriate; or 

(B)(i) the Postal Service adopts or implements remedial action (including 

revising the financial plan and budget pursuant to section 223(g)) to correct 

the inconsistency which the Authority finds reasonable and appropriate, 

taking into account the terms of the financial plan and budget; and 

(ii) the Postmaster General agrees to submit the reports described in subsection (a) on a monthly basis for such period as the Authority may require. 

(2) SPECIAL RULE FOR INCONSISTENCIES ATTRIBUTABLE TO ACTS OF CONGRESS.— 

(A) DETERMINATION BY AUTHORITY.—If the Authority determines that the 

revenues or expenditures of the Postal Service during a control period are 

not consistent with the financial plan and budget for the year as approved 

by the Authority under section 223 as a result of the terms and conditions 

of any law enacted by Congress which affects the Postal Service, the Authority shall so notify the Postmaster General. 

(B) CERTIFICATION.—In the case of an inconsistency described in subparagraph (A), the Authority shall certify to the Postmaster General, the President, the Secretary of the Treasury, and Congress that the Postal Service 

is at variance with the financial plan and budget unless the Postal Service 

adopts or implements remedial action (including revising the financial plan 

and budget pursuant to section 202(e)) to correct the inconsistency which 

the Authority finds reasonable and appropriate, taking into account the 

terms of the financial plan and budget. 

(d) EFFECT OF CERTIFICATION.—If the Authority certifies to the Secretary of the 

Treasury that a variance exists, the Authority or the Secretary may withhold access 

by the Postal Service to additional supplementary debt authorized by this title. 

SEC. 226. RECOMMENDATIONS REGARDING FINANCIAL STABILITY, ETC. 

(a) IN GENERAL.—The Authority may at any time submit recommendations to the 

Postmaster General, the President, and Congress on actions the Postal Service or 

any other entity of the Federal Government should take to ensure compliance by 

the Postal Service with a financial plan and budget or to otherwise promote the fiVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00024 Fmt 6659 Sfmt 6621 E:\HR\OC\HR363P1.XXX HR363P1

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nancial stability, management responsibility, and service delivery efficiency of the 

Postal Service, including recommendations relating to— 

(1) the management of the Postal Service’s financial affairs, including cash 

forecasting, information technology, placing controls on expenditures for personnel, reducing benefit costs, reforming procurement practices, and placing 

other controls on expenditures; 

(2) the relationship between the Postal Service and other entities of the Federal Government; 

(3) the structural relationship of subdivisions within the Postal Service; 

(4) the modification of existing revenue structures, or the establishment of additional revenue structures; 

(5) the establishment of alternatives for meeting obligations to pay for the 

pensions and retirement benefits of current and future Postal Service retirees; 

(6) modifications of services which are the responsibility of and are delivered 

by the Postal Service; 

(7) modifications of the types of services which are delivered by entities other 

than the Postal Service under alternative service delivery mechanisms; 

(8) the effects of Federal Government laws and court orders on the operations 

of the Postal Service; 

(9) the increased use of a personnel system for employees of the Postal Service which is based upon employee performance standards; and 

(10) the improvement of personnel training and proficiency, the adjustment 

of staffing levels, and the improvement of training and performance of management and supervisory personnel. 

(b) RESPONSE TO RECOMMENDATIONS FOR ACTIONS WITHIN AUTHORITY OF POSTAL

SERVICE.— 

(1) IN GENERAL.—In the case of any recommendations submitted under subsection (a) during a control period which are within the authority of the Postal 

Service to adopt, not later than 90 days after receiving the recommendations, 

the Postmaster General shall submit a statement to the Authority, the President, and Congress which provides notice as to whether the Postal Service will 

adopt the recommendations. 

(2) IMPLEMENTATION PLAN REQUIRED FOR ADOPTED RECOMMENDATIONS.—If the 

Postmaster General notifies the Authority and Congress under paragraph (1) 

that the Postal Service will adopt any of the recommendations submitted under 

subsection (a), the Postmaster General shall include in the statement a written 

plan to implement the recommendation which includes— 

(A) specific performance measures to determine the extent to which the 

Postal Service has adopted the recommendation; and 

(B) a schedule for auditing the Postal Service’s compliance with the plan. 

(3) EXPLANATIONS REQUIRED FOR RECOMMENDATIONS NOT ADOPTED.—If the 

Postmaster General notifies the Authority, the President, and Congress under 

paragraph (1) that the Postal Service will not adopt any recommendation submitted under subsection (a) which the Postal Service has authority to adopt, the 

Postmaster General shall include in the statement explanations for the rejection 

of the recommendations. 

(c) IMPLEMENTATION OF REJECTED RECOMMENDATIONS BY AUTHORITY.— 

(1) IN GENERAL.—If the Postmaster General notifies the Authority, the President, and Congress under subsection (b)(1) that the Postal Service will not 

adopt any recommendation submitted under subsection (a) which the Postal 

Service has authority to adopt, the Authority may by a majority vote of its 

members take such action concerning the recommendation as it deems appropriate, after consulting with the Committee on Oversight and Government Reform of the House of Representatives and the Committee on Homeland Security 

and Governmental Affairs of the Senate. 

(2) EFFECTIVE DATE.—This subsection shall apply with respect to recommendations of the Authority made after the expiration of the 6-month period 

which begins on the date of the commencement of a control period. 

SEC. 227. SPECIAL RULES FOR FISCAL YEAR IN WHICH CONTROL PERIOD COMMENCES. 

(a) ADOPTION OF TRANSITION BUDGET.—Notwithstanding any provision of section 

223 to the contrary, in the case of a fiscal year in which a control period commences, 

the following rules shall apply: 

(1) Not later than 45 days after the appointment of its members, the Authority shall review the proposed Integrated Financial Plan for the Postal Service 

for such fiscal year and shall submit any recommendations for modifications to 

such plan to promote the financial stability of the Postal Service to the Postmaster General, the President, and Congress. 


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(2) Not later than 15 days after receiving the recommendations of the Authority submitted under paragraph (1), the Postmaster General shall promptly 

adopt a revised budget for the fiscal year (in this section referred to as the 

‘‘transition budget’’), and shall submit the transition budget to the Authority, 

the President, and Congress. 

(3) Not later than 15 days after receiving the transition budget from the Postmaster General under paragraph (2), the Authority shall submit a report to the 

Postmaster General, the President, and Congress analyzing the budget (taking 

into account any items or provisions disapproved by the Postmaster General) 

and shall include in the report such recommendations for revisions to the transition budget as the Authority considers appropriate to promote the financial 

stability of the Postal Service during the fiscal year. 

(b) FINANCIAL PLAN AND BUDGET.— 

(1) DEADLINE FOR SUBMISSION.—For purposes of section 223, the Postmaster 

General shall submit the financial plan and budget for the applicable fiscal year 

as soon as practicable after the commencement of a control period (in accordance with guidelines established by the Authority). 

(2) ADOPTION BY POSTMASTER GENERAL.—In accordance with the procedures 

applicable under section 223 (including procedures providing for review by the 

Authority) the Postmaster General shall adopt the financial plan and budget for 

the applicable fiscal year (including the transition budget incorporated in the 

financial plan and budget). 

(3) TRANSITION BUDGET AS TEMPORARY FINANCIAL PLAN AND BUDGET.—Until 

the approval of the financial plan and budget for the applicable fiscal year by 

the Authority under this subsection, the transition budget established under 

subsection (a) shall serve as the financial plan and budget adopted under this 

subtitle for purposes of this Act (and any provision of law amended by this Act) 

for the applicable fiscal year. 

SEC. 228. ASSISTANCE IN ACHIEVING FINANCIAL STABILITY, ETC. 

In addition to any other actions described in this title, the Authority may undertake cooperative efforts to assist the Postal Service in achieving financial stability 

and management efficiency, including— 

(1) assisting the Postal Service in avoiding defaults, eliminating and liquidating deficits, maintaining sound budgetary practices, and avoiding interruptions in the delivery of services; 

(2) assisting the Postal Service in improving the delivery of services, the 

training and effectiveness of personnel of the Postal Service, and the efficiency 

of management and supervision; and 

(3) making recommendations to the President for transmission to Congress on 

changes to this Act or other Federal laws, or other actions of the Federal Government, which would assist the Postal Service in complying with an approved 

financial plan and budget under subtitle B. 

SEC. 229. OBTAINING REPORTS. 

The Authority may require the Postmaster General, the Chief Financial Officer 

of the Postal Service, and the Inspector General of the Postal Service, to prepare 

and submit such reports as the Authority considers appropriate to assist it in carrying out its responsibilities under this title, including submitting copies of any reports regarding revenues, expenditures, budgets, costs, plans, operations, estimates, 

and other financial or budgetary matters of the Postal Service. 

SEC. 230. REPORTS AND COMMENTS. 

(a) ANNUAL REPORTS TO CONGRESS.—Not later than 30 days after the last day of 

each fiscal year which is a control year, the Authority shall submit a report to Congress describing— 

(1) the progress made by the Postal Service in meeting the objectives of this 

title during the fiscal year; 

(2) the assistance provided by the Authority to the Postal Service in meeting 

the purposes of this title for the fiscal year; and 

(3) any other activities of the Authority during the fiscal year. 

(b) REVIEW AND ANALYSIS OF PERFORMANCE AND FINANCIAL ACCOUNTABILITY REPORTS.—The Authority shall review each yearly report prepared and submitted by 

the Postmaster General to the Postal Regulatory Commission and Congress and 

shall submit a report to Congress analyzing the completeness and accuracy of such 

reports. 

(c) COMMENTS REGARDING ACTIVITIES OF POSTAL SERVICE.—At any time during a 

control period, the Authority may submit a report to Congress describing any action 

taken by the Postal Service (or any failure to act by the Postal Service) which the 

Authority determines will adversely affect the Postal Service’s ability to comply with 


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an approved financial plan and budget under subtitle B or will otherwise have a 

significant adverse impact on the best interests of the Postal Service. 

(d) REPORTS ON EFFECT OF FEDERAL LAWS ON THE POSTAL SERVICE.—At any time 

during any year, the Authority may submit a report to the Postmaster General, the 

President, and Congress on the effect of laws enacted by Congress on the financial 

plan and budget for the year and on the financial stability and management efficiency of the Postal Service in general. 

(e) MAKING REPORTS PUBLICLY AVAILABLE.—The Authority shall make any report 

submitted under this section available to the public, except to the extent that the 

Authority determines that the report contains confidential material. 

Subtitle D—Termination of a Control Period 

SEC. 231. TERMINATION OF CONTROL PERIOD, ETC. 

(a) IN GENERAL.—After the completion of the requirements for the termination of 

a control period described in section 202(b)(4), the Authority shall submit a recommendation to Congress requesting the termination of such control period, the dissolution of the Authority, and the reinstatement to the Board of Governors (and the 

individual Governors) of the Postal Service of the authorities and responsibilities referred to in section 202(b)(2)(A). 

(b) CONGRESSIONAL APPROVAL.— (1) IN GENERAL.—A control period shall not be terminated unless a joint resolution approving of the recommendation in subsection (a) is enacted, in accordance with section 232, before the earlier of— 

(A) the end of the 30-day period beginning on the date on which the Authority transmits the recommendation to Congress under subsection (a); or 

(B) the adjournment of the Congress sine die for the session during which 

such recommendation is transmitted. 

(2) DAYS OF SESSION.—For purposes of paragraph (1) and subsections (a) and 

(c) of section 232, the days on which either House of Congress is not in session 

because of an adjournment of more than 3 days to a day certain shall be excluded in the computation of a period. 

SEC. 232. CONGRESSIONAL CONSIDERATION OF RECOMMENDATION. 

(a) TERMS OF THE RESOLUTION.—For purposes of this subtitle, the term ‘‘joint resolution’’ means only a joint resolution which is introduced within the 10-day period 

beginning on the date on which the recommendation referred to in section 231(a) 

is received by Congress— 

(1) the matter after the resolving clause of which is as follows: ‘‘That Congress 

approves the recommendation of the Postal Service Financial Responsibility and 

Management Assistance Authority, submitted by such Authority on ll.’’, the 

blank space being filled in with the appropriate date; 

(2) the title of which is as follows: ‘‘Joint resolution approving the recommendation of Postal Service Financial Responsibility and Management Assistance Authority.’’; and 

(3) which does not have a preamble. 

(b) REFERRAL.—A resolution described in subsection (a) that is introduced in the 

House of Representatives or the Senate shall be referred to the appropriate committees of the House of Representatives or the Senate, respectively. 

(c) DISCHARGE.—If the committee to which a resolution described in subsection (a) 

is referred has not reported such resolution (or an identical resolution) by the end 

of the 20-day period beginning on the date on which the Authority transmits its recommendation to Congress under section 231(a) such committee shall, at the end of 

such period, be discharged from further consideration of such resolution, and such 

resolution shall be placed on the appropriate calendar of the House involved. 

(d) CONSIDERATION.— 

(1) IN GENERAL.—On or after the third day after the date on which the committee to which such a resolution is referred has reported, or has been discharged (under subsection (c)) from further consideration of, such a resolution, 

it is in order (even though a previous motion to the same effect has been disagreed to) for any Member of the respective House to move to proceed to the 

consideration of the resolution. A Member may make the motion only on the 

day after the calendar day on which the Member announces to the House concerned the Member’s intention to make the motion, except that, in the case of 

the House of Representatives, the motion may be made without such prior announcement if the motion is made by direction of the committee to which the 

resolution was referred. All points of order against the resolution (and against 

consideration of the resolution) are waived. The motion is highly privileged in 


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the House of Representatives and is privileged in the Senate and is not debatable. The motion is not subject to amendment, or to a motion to postpone, or 

to a motion to proceed to the consideration of other business. A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in 

order. If a motion to proceed to the consideration of the resolution is agreed to, 

the respective House shall immediately proceed to consideration of the joint resolution without intervening motion, order, or other business, and the resolution 

shall remain the unfinished business of the respective House until disposed of. 

(2) DEBATE.—Debate on the resolution, and on all debatable motions and appeals in connection therewith, shall be limited to not more than 2 hours, which 

shall be divided equally between those favoring and those opposing the resolution. An amendment to the resolution is not in order. A motion further to limit 

debate is in order and not debatable. A motion to postpone, or a motion to proceed to the consideration of other business, or a motion to recommit the resolution is not in order. A motion to reconsider the vote by which the resolution is 

agreed to or disagreed to is not in order. 

(3) VOTE ON FINAL PASSAGE.—Immediately following the conclusion of the debate on a resolution described in subsection (a) and a single quorum call at the 

conclusion of the debate if requested in accordance with the rules of the appropriate House, the vote on final passage of the resolution shall occur. 

(4) APPEALS.—Appeals from the decisions of the Chair relating to the application of the rules of the Senate or the House of Representatives, as the case may 

be, to the procedure relating to a resolution described in subsection (a) shall be 

decided without debate. 

(e) CONSIDERATION BY OTHER HOUSE.— (1) IN GENERAL.—If, before the passage by one House of a resolution of that 

House described in subsection (a), that House receives from the other House a 

resolution described in subsection (a), then the following procedures shall apply: 

(A) The resolution of the other House shall not be referred to a committee 

and may not be considered in the House receiving it except in the case of 

final passage as provided in subparagraph (B)(ii). 

(B) With respect to a resolution described in subsection (a) of the House 

receiving the resolution— 

(i) the procedure in that House shall be the same as if no resolution 

had been received from the other House; but 

(ii) the vote on final passage shall be on the resolution of the other 

House. 

(2) DISPOSITION OF A RESOLUTION.—Upon disposition of the resolution received from the other House, it shall no longer be in order to consider the resolution that originated in the receiving House. 

(f) RULES OF THE SENATE AND HOUSE.—This section is enacted by Congress— 

(1) as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and as such it is deemed a part of the rules of each 

House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of a resolution described in subsection (a), and 

it supersedes other rules only to the extent that it is inconsistent with such 

rules; and 

(2) with full recognition of the constitutional right of either House to change 

the rules (so far as relating to the procedure of that House) at any time, in the 

same manner, and to the same extent as in the case of any other rule of that 

House. 

TITLE III—POSTAL SERVICE WORKFORCE 

Subtitle A—General Provisions 

SEC. 301. MODIFICATIONS RELATING TO DETERMINATION OF PAY COMPARABILITY. 

(a) POSTAL POLICY.—The first sentence of section 101(c) is amended— 

(1) by inserting ‘‘total’’ before ‘‘rates and types of compensation’’; and 

(2) by inserting ‘‘entire’’ before ‘‘private sector’’. 

(b) EMPLOYMENT POLICY.—The second sentence of section 1003(a) is amended— 

(1) by inserting ‘‘total’’ before ‘‘compensation and benefits’’ each place it appears; and 

(2) by inserting ‘‘entire’’ before ‘‘private sector’’. 

(c) CONSIDERATIONS.—For purposes of the amendments made by this section, any 

determination of ‘‘total rates and types of compensation’’ or ‘‘total compensation and 

benefits’’ shall, at a minimum, take into account pay, health benefits, retirement 


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benefits, life insurance benefits, leave, holidays, and continuity and stability of employment. 

SEC. 302. LIMITATION ON POSTAL CONTRIBUTIONS UNDER FEGLI AND FEHBP. 

Section 1003 is amended by adding at the end the following: 

‘‘(e)(1) At least 1 month before the start of each fiscal year as described in paragraph (2), the Postmaster General shall transmit to the Postal Regulatory Commission certification (together with such supporting documentation as the Postal Regulatory Commission may require) that contributions of the Postal Service for such fiscal year will not exceed— 

‘‘(A) in the case of life insurance under chapter 87 of title 5, the Government 

contributions determined under section 8708 of such title; and 

‘‘(B) in the case of health insurance under chapter 89 of title 5, the Government contributions determined under 8906 of such title. 

‘‘(2) This subsection applies with respect to— 

‘‘(A) except as provided in subparagraph (B), each fiscal year beginning after 

September 30, 2013; and 

‘‘(B) in the case of officers and employees of the Postal Service covered by a 

collective bargaining agreement which is in effect on the date of the enactment 

of this subsection— 

‘‘(i) each fiscal year beginning after the expiration date of such agreement, including 

‘‘(ii) for the fiscal year in which such expiration date occurs, any portion 

of such fiscal year remaining after such expiration date. 

‘‘(3)(A) If, after reasonable notice and opportunity for hearing is afforded to the 

Postal Service, the Postal Regulatory Commission finds that the contributions of the 

Postal Service for a fiscal year will exceed or are exceeding the limitation specified 

in subparagraph (A) or (B) of paragraph (1), the Commission shall order that the 

Postal Service take such action as the Commission considers necessary to achieve 

full and immediate compliance with the applicable limitation or limitations. 

‘‘(B) Sections 3663 and 3664 shall apply with respect to any order issued by the 

Postal Regulatory Commission under subparagraph (A). 

‘‘(C) Nothing in this paragraph shall be considered to permit the issuance of an 

order requiring reduction of contributions below the level specified by the provision 

of law cited in subparagraph (A) or (B) of paragraph (1), as applicable.’’. 

SEC. 303. REPEAL OF PROVISION RELATING TO OVERALL VALUE OF FRINGE BENEFITS. 

The last sentence of section 1005(f) is repealed. 

SEC. 304. APPLICABILITY OF REDUCTION-IN-FORCE PROCEDURES. 

Section 1206 is amended by adding at the end the following: 

‘‘(d) Collective-bargaining agreements between the Postal Service and bargaining 

representatives recognized under section 1203, ratified after the date of enactment 

of this subsection, shall contain no provision restricting the applicability of reduction-in-force procedures under title 5 with respect to members of the applicable bargaining unit. 

‘‘(e) Any collective-bargaining agreement between the Postal Service and the bargaining representatives recognized under section 1203 ratified before the date of enactment of this Act that contain any provision violating subsection (d) shall be renegotiated with a new collective-bargaining agreement to be ratified or imposed 

through an arbitration decision under section 1207 within 9 months after such date 

of enactment. 

‘‘(f)(1) If a collective-bargaining agreement between the Postal Service and bargaining representatives recognized under section 1203, ratified after the date of enactment of this subsection, includes reduction-in-force procedures which can be applied in lieu of reduction-in-force procedures under title 5, the Postal Service may, 

in its discretion, apply with respect to members of the applicable bargaining unit— 

‘‘(A) the alternative procedures (or, if 2 or more are agreed to, 1 of the alternative procedures); or 

‘‘(B) the reduction-in-force procedures under title 5. 

‘‘(2) In no event may, if procedures for the resolution of a dispute or impasse arising in the negotiation of a collective-bargaining agreement (whether through binding 

arbitration or otherwise) are invoked under this chapter, the award or other resolution reached under such procedures provide for the elimination of, or the substitution of any alternative procedures in lieu of, reduction-in-force procedures under 

title 5.’’. 

SEC. 305. MODIFICATIONS RELATING TO COLLECTIVE BARGAINING. 

Section 1207 is amended by striking subsections (c) and (d) and inserting the following: 


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‘‘(c)(1) If no agreement is reached within 30 days after the appointment of a mediator under subsection (b), or if the parties decide upon arbitration before the expiration of the 30-day period, an arbitration board shall be established consisting of 1 

member selected by the Postal Service (from the list under paragraph (2)), 1 member selected by the bargaining representative of the employees (from the list under 

paragraph (2)), and the mediator appointed under subsection (b). 

‘‘(2) Upon receiving a request from either of the parties referred to in paragraph 

(1), the Director of the Federal Mediation and Conciliation Service shall provide a 

list of not less than 9 individuals who are well qualified to serve as neutral arbitrators. Each person listed shall be an arbitrator of nationwide reputation and professional nature, a member of the National Academy of Arbitrators, and an individual 

whom the Director has determined to be willing and available to serve. If, within 

7 days after the list is provided, either of the parties has not selected an individual 

from the list, the Director shall make the selection within 3 days. 

‘‘(3) The arbitration board shall give the parties a full and fair hearing, including 

an opportunity to present evidence in support of their claims, and an opportunity 

to present their case in person, by counsel, or by other representative as they may 

elect. The hearing shall be concluded no more than 40 days after the arbitration 

board is established. 

‘‘(4) No more than 7 days after the hearing is concluded, each party shall submit 

to the arbitration board 2 offer packages, each of which packages shall specify the 

terms of a proposed final agreement. 

‘‘(5) If no agreement is reached within 7 days after the last day date for the submission of an offer package under paragraph (4), each party shall submit to the arbitration board a single final offer package specifying the terms of a proposed final 

agreement. 

‘‘(6) No later than 3 days after the submission of the final offer packages under 

paragraph (5), the arbitration board shall select 1 of those packages as its tentative 

award, subject to paragraph (7). 

‘‘(7)(A) The arbitration board may not select a final offer package under paragraph 

(6) unless it satisfies each of the following: 

‘‘(i) The offer complies with the requirements of sections 101(c) and 1003(a). 

‘‘(ii) The offer takes into account the current financial condition of the Postal 

Service. 

‘‘(iii) The offer takes into account the long-term financial condition of the Postal Service. 

‘‘(B)(i) If the board unanimously determines, based on clear and convincing evidence presented during the hearing under paragraph (3), that neither final offer 

package satisfies the conditions set forth in subparagraph (A), the board shall by 

majority vote— 

‘‘(I) select the package that best meets such conditions; and 

‘‘(II) modify the package so selected to the minimum extent necessary to satisfy such conditions. 

‘‘(ii) If modification (as described in subparagraph (B)(i)(II)) is necessary, the 

board shall have an additional 7 days to render its tentative award under this subparagraph. 

‘‘(8) The parties may negotiate a substitute award to replace the tentative award 

selected under paragraph (6) or rendered under paragraph (7) (as the case may be). 

If no agreement on a substitute award is reached within 10 days after the date on 

which the tentative award is so selected or rendered, the tentative award shall become final. 

‘‘(9) The arbitration board shall review any substitute award negotiated under 

paragraph (8) to determine if it satisfies the conditions set forth in paragraph (7)(A). 

If the arbitration board, by a unanimous vote taken within 3 days after the date 

on which the agreement on the substitute award is reached under paragraph (8), 

determines that the substitute award does not satisfy such conditions, the tentative 

award shall become final. In the absence of a vote, as described in the preceding 

sentence, the substitute agreement shall become final. 

‘‘(10) If, under paragraph (5), neither party submits a final offer package by the 

last day allowable under such paragraph, the arbitration board shall develop and 

issue a final award no later than 20 days after such last day. 

‘‘(11) A final award or agreement under this subsection shall be conclusive and 

binding upon the parties. 

‘‘(12) Costs of the arbitration board and mediation shall be shared equally by the 

Postal Service and the bargaining representative. 

‘‘(d) In the case of a bargaining unit whose recognized collective-bargaining representative does not have an agreement with the Postal Service, if the parties fail 

to reach agreement within 90 days after the commencement of collective bargaining, 

a mediator shall be appointed in accordance with the provisions of subsection (b), 


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unless the parties have previously agreed to another procedure for a binding resolution of their differences. If the parties fail to reach agreement within 180 days after 

the commencement of collective bargaining, an arbitration board shall be established to provide conclusive and binding arbitration in accordance with the provisions of subsection (c).’’. 

SEC. 306. ONE-TIME TRANSFER OF NET SURPLUS POSTAL RETIREMENT CONTRIBUTIONS. 

(a) TRANSFER REQUIREMENT.—Not later than 2 weeks after the date of enactment 

of this Act, there shall be appropriated to the Postal Service Fund, from the Postal 

Service Federal Employee Retirement System account within the Civil Service Retirement and Disability Fund, an amount equal to the absolute value of the amount 

computed as of September 30, 2010, under section 8423(b)(1)(B) of title 5, United 

States Code, less the sum of— 

(1) the Postal supplemental liability, calculated as of September 30, 2010, 

under section 8348(h) of title 5, United States Code; and 

(2) any contribution required by section 8423 of such title that the Postal 

Service has not made during fiscal years 2011 or 2012, as determined by the 

Office of Personnel Management no later than one week after the date of enactment of this Act 

(b) LIMITATIONS ON USE.—The amount transferred to the Postal Service Fund 

under this section— 

(1) may be used for such purposes as the Postal Service considers appropriate; 

except that 

(2) if any amounts so transferred remain in the Postal Service Fund after 

September 30, 2015, such amounts shall be used— 

(A) first, to satisfy any supplemental liability computed under section 

8423(b)(1)(B) of title 5, United States Code; 

(B) second, to satisfy any supplemental liability computed under section 

8348(h) of title 5, United States Code; and 

(C) third, to satisfy any obligations of the Postal Service under section 

2005 of title 39, United States Code. 

(c) DEFINITIONS.—For purposes of this section— 

(1) the term ‘‘Civil Service Retirement and Disability Fund’’ refers to the fund 

under section 8348 of title 5, United States Code; and 

(2) the term ‘‘Postal Service Fund’’ refers to the fund under section 2003 of 

title 39, United States Code. 

(d) SENSE OF CONGRESS.—It is the sense of Congress that the Postal Service 

should use any funds under subsection (b)(1) for separation incentives for Postal employees. 

Subtitle B—Postal Service Workers’ Compensation 

Reform 

SEC. 311. POSTAL SERVICE WORKERS’ COMPENSATION REFORM. 

(a) IN GENERAL.—Effective 12 months after the triggering date of this section (as 

defined in subsection (e)(2)), section 1005 is amended by striking subsection (c) and 

inserting the following: 

‘‘(c)(1) For purposes of this subsection— 

‘‘(A) the term ‘postal employee’ means an officer or employee of the Postal 

Service or the former Post Office Department; 

‘‘(B) the term ‘retirement age’ has the meaning given such term under section 

216(l)(1) of the Social Security Act; and 

‘‘(C) the term ‘appropriate committees of Congress’ means— 

‘‘(i) the Committee on Oversight and Government Reform of the House of 

Representatives; and 

‘‘(ii) the Committee on Homeland Security and Governmental Affairs of 

the Senate. 

‘‘(2) The Postal Service shall design and administer a program for the payment 

of benefits for the disability or death of an individual resulting from personal injury 

sustained while in the performance of such individual’s duties as a postal employee. 

‘‘(3) The program under this subsection— 

‘‘(A) shall be designed by the Postal Service in consultation with appropriate 

employee representatives; 

‘‘(B) shall not provide for any amount payable to a disabled postal employee 

to be augmented on the basis of number of dependents; and 


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‘‘(C) shall include provisions for automatic transition, upon attainment of retirement age, to benefits involving, coordinated with, or otherwise determined 

by reference to retirement benefits.’’. 

(b) RECOMMENDATIONS.—Not later than 6 months after the triggering date— 

(1) the Office of Personnel Management shall submit to the appropriate committees of Congress recommendations for any legislation or administrative actions which the Office considers necessary to carry out the purposes of this section with respect to any matter within the jurisdiction of the Office, including 

any amendments which may be necessary with respect to chapter 87 or 89 of 

title 5, United States Code; and 

(2) the Postal Service shall submit to the appropriate committees of Congress 

recommendations for any legislation which the Postal Service considers necessary to carry out the purposes of this section with respect to any matter within the jurisdiction of the Postal Service. 

(c) NOTIFICATION REQUIREMENTS.—Not later than 9 months after the triggering 

date, the Postal Service shall submit to the appropriate committees of Congress and 

shall cause to be published in the Federal Register a description of the program proposed by the Postal Service for implementation under section 1005(c) of title 39, 

United States Code, as amended by subsection (a). Included in the notification provided under the preceding sentence shall be— 

(1) a detailed statement of the benefits to be offered and the persons eligible 

to receive those benefits; 

(2) provisions to ensure an orderly transition to the system proposed to be implemented; and 

(3) such other information as the Postal Service considers appropriate. 

(d) COMMENCEMENT DATE.—The program under section 1005(c) of title 39, United 

States Code, as amended by this section— 

(1) shall begin to operate on such date as the Postmaster General shall determine, except that such date shall be a date occurring— 

(A) not earlier than 12 months after the triggering date; and 

(B) not later than 24 months after the triggering date; and 

(2) shall apply with respect to amounts payable for periods beginning on or 

after the date on which the program begins to operate, irrespective of date of 

the disability or death to which such amounts relate. 

(e) CONDITION PRECEDENT.— 

(1) IN GENERAL.—The preceding provisions of this section shall not become effective until the date on which a Postal Service Financial Responsibility and 

Management Assistance Authority (established under section 202)— 

(A) makes a written determination that conditions warrant their implementation; and 

(B) submits such written determination to the Postal Service, the Office 

of Personnel Management, and the appropriate committees of Congress 

(within the meaning of the amendment made by subsection (a)). 

(2) TRIGGERING DATE.—For purposes of this section, the term ‘‘triggering date 

of this section’’ or ‘‘triggering date’’ means the date described in paragraph (1). 

TITLE IV—POSTAL SERVICE REVENUE 

SEC. 401. ADEQUACY, EFFICIENCY, AND FAIRNESS OF POSTAL RATES. 

(a) IN GENERAL.—Section 3622(d) is amended— 

(1) in paragraph (1)— 

(A) by redesignating subparagraphs (B) through (E) as subparagraph (D) 

through (G), respectively; and 

(B) by inserting after subparagraph (A) the following: 

‘‘(B) subject to the limitation under subparagraph (A), establish postal 

rates to fulfill the requirement that each market-dominant class, product, 

and type of mail service (except for an experimental product or service) bear 

the direct and indirect postal costs attributable to such class, product, or 

type through reliably identified causal relationships plus that portion of all 

other costs of the Postal Service reasonably assignable to such class, product, or type; 

‘‘(C) establish postal rates for each group of functionally equivalent agreements between the Postal Service and users of the mail that— 

‘‘(i) cover attributable cost; and 

‘‘(ii) improve the net financial position of the Postal Service; 

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lent to each other within the same market-dominant product, but shall not 

include agreements within an experimental product;’’; and 

(2) by adding at the end the following: 

‘‘(4) PRC STUDY.— 

‘‘(A) IN GENERAL.—Within 90 days after the end of the first fiscal year 

beginning after the date of enactment of the Postal Reform Act of 2011, the 

Postal Regulatory Commission shall complete a study to determine the 

quantitative impact of the Postal Service’s excess capacity on the direct and 

indirect postal costs attributable to any class that bears less than 100 percent of its costs attributable (as described in paragraph (1)(B)), according 

to the most recent annual determination of the Postal Regulatory Commission under section 3653. 

‘‘(B) REQUIREMENTS.—The study required under subparagraph (A) shall— 

‘‘(i) be conducted pursuant to regulations that the Postal Regulatory 

Commission shall prescribe within 90 days after the date of enactment 

of the Postal Reform Act of 2011, taking into account existing regulations for proceedings to improve the quality, accuracy, or completeness 

of ratemaking information under section 3652(e)(2) in effect on such 

date; and 

‘‘(ii) for any year in which any class of mail bears less than 100 percent of its costs attributable (as described in paragraph (1)(B)), be updated annually by the Postal Service and included in its annual report 

to the Commission under section 3652, using such methodologies as the 

Commission shall by regulation prescribe. 

‘‘(5) ADDITIONAL RATES.—Starting not earlier than 12 months and not later 

than 18 months after the date on which the first study described in paragraph 

(4) is completed, and at least once in each subsequent 12-month period, the 

Postal Service shall establish postal rates for each loss-making class of mail to 

eliminate such losses (other than those caused by the Postal Service’s excess capacity) by exhausting all unused rate authority as well as maximizing incentives to reduce costs and increase efficiency, subject to the following: 

‘‘(A) The term ‘loss-making’, as used in this paragraph with respect to a 

class of mail, means a class of mail that bears less than 100 percent of its 

costs attributable (as described in paragraph (1)(B)), according to the most 

recent annual determination of the Postal Regulatory Commission under 

section 3653, adjusted to account for the quantitative effect of excess capacity on the costs attributable of the class (as described in paragraph (1)(C)). 

‘‘(B) Unused rate authority shall be annually increased by 2 percent for 

each class of mail that bears less than 90 percent of its costs attributable 

(as described in paragraph (1)(B)), according to the most recent annual determination of the Postal Regulatory Commission under section 3653, adjusted to account for the quantitative effect of excess capacity on the costs 

attributable of the class (as described in paragraph (1)(C)), with such increase in unused rate authority to take effect 30 days after the date that 

the Commission issues such determination.’’. 

(b) CONFORMING AMENDMENT.—Subparagraph (A) of section 3622(c)(10) is amended to read as follows: 

‘‘(A) improve the net financial position of the Postal Service through reducing Postal Service costs or increasing the overall contribution to the institutional costs of the Postal Service; and’’. 

(c) EXCEPTION.—Section 3622(d) is amended by adding after paragraph (5) (as 

added by subsection (a)(2)) the following: 

‘‘(6) EXCEPTION.—The requirements of paragraph (1)(B) shall not apply to a 

market-dominant product for which a substantial portion of the product’s mail 

volume consists of inbound international mail with terminal dues rates determined by the Universal Postal Union (and not by bilateral agreements or other 

arrangements).’’. 

SEC. 402. REPEAL OF RATE PREFERENCES FOR QUALIFIED POLITICAL COMMITTEES. 

Subsection (e) of section 3626 is repealed. 

SEC. 403. RATE PREFERENCES FOR NONPROFIT ADVERTISING. 

(a) PROVISIONS RELATING TO FORMER SECTION 4358(f).—Section 3626(a)(5) is 

amended by adding at the end the following: ‘‘Notwithstanding any other provision 

of this paragraph, the percentage specified in the preceding sentence shall be increased by an additional 2 percentage points as of the first day of each calendar 

year beginning at least 3 years after the date of the enactment of the Postal Reform 

Act of 2011, until such percentage reaches 80 percent.’’. 


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(b) PROVISIONS RELATING TO FORMER SECTION 4452 (b) AND (c).—Section 

3626(a)(6) is amended by inserting after subparagraph (C) the following (as a flush 

left sentence): 

‘‘Notwithstanding any other provision of this paragraph, the percentage specified 

in subparagraph (A) shall be increased by an additional 2 percentage points as of 

the first day of each calendar year beginning at least 3 years after the date of the 

enactment of the Postal Reform Act of 2011, until such percentage reaches 80 percent.’’. 

SEC. 404. STREAMLINED REVIEW OF QUALIFYING SERVICE AGREEMENTS FOR COMPETITIVE 

PRODUCTS. 

Section 3633 is amended by adding at the end the following: 

‘‘(c) STREAMLINED REVIEW.—Within 90 days after the date of the enactment of this 

subsection, after notice and opportunity for public comment, the Postal Regulatory 

Commission shall promulgate (and may from time to time thereafter revise) regulations for streamlined after-the-fact review of new agreements between the Postal 

Service and users of the mail that provide rates not of general applicability for competitive products, and are functionally equivalent to existing agreements that have 

collectively covered attributable costs and collectively improved the net financial position of the Postal Service. Streamlined review will be concluded within 5 working 

days after the agreement is filed with the Commission and shall be limited to approval or disapproval of the agreement as a whole based on the Commission’s determination of its functional equivalence. Agreements not approved may be resubmitted without prejudice under section 3632(b)(3).’’. 

SEC. 405. SUBMISSION OF SERVICE AGREEMENTS FOR STREAMLINED REVIEW. 

Section 3632(b) is amended— 

(1) by redesignating paragraph (4) as paragraph (5); and 

(2) by inserting after paragraph (3) the following: 

‘‘(4) RATES FOR STREAMLINED REVIEW.—In the case of rates not of general applicability for competitive products that the Postmaster General considers eligible for streamlined review under section 3633(c), the Postmaster General shall 

cause each agreement to be filed with the Postal Regulatory Commission by 

such date, on or before the effective date of any new rate, as the Postmaster 

General considered appropriate.’’. 

SEC. 406. TRANSPARENCY AND ACCOUNTABILITY FOR SERVICE AGREEMENTS. 

Section 3653 is amended— 

(1) by redesignating subsections (c) through (e) as subsections (d) through (f), 

respectively; and 

(2) by inserting after subsection (b) the following: 

‘‘(c) Each annual written determination of the Commission under section 3653 

shall include the following written determinations: 

‘‘(1) Whether each product covered its costs, and if it did not, the determination shall state that such product is in noncompliance under section 3653(c). 

‘‘(2) For each group of functionally equivalent agreements between the Postal 

Service and users of the mail, whether it fulfilled requirements to— 

‘‘(A) cover attributable costs; and 

‘‘(B) improve the net financial position of the Postal Service. 

‘‘(3) Any group of functionally equivalent agreements (as referred to in subparagraph (B)) not meeting subparagraphs (A) and (B) of paragraph (2) shall 

be determined to be in noncompliance under this subsection. 

‘‘(4) For purposes of this subsection, a group of functionally equivalent agreements (as referred to in paragraph (2)) shall consist of all service agreements 

that are functionally equivalent to each other within the same market-dominant 

or competitive product, but shall not include agreements within an experimental product.’’. 

SEC. 407. NONPOSTAL SERVICES. 

(a) NONPOSTAL SERVICES.— 

(1) IN GENERAL.—Part IV is amended by adding after chapter 36 the following: 

‘‘CHAPTER 37—NONPOSTAL SERVICES 

‘‘Sec. 

‘‘3701. Purpose. 

‘‘3702. Definitions. 

‘‘3703. Postal Service advertising program. 

‘‘3704. Postal Service program for State governments. 

‘‘3705. Postal Service program for other government agencies. 

‘‘3706. Transparency and accountability for nonpostal services. 


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‘‘§ 3701. Purpose 

‘‘This chapter is intended to enable the Postal Service to increase its net revenues 

through specific nonpostal products and services that are expressly authorized by 

this chapter. Postal Service revenues and expenses under this chapter shall be funded through the Postal Service Fund. 

‘‘§ 3702. Definitions 

‘‘As used in this chapter— 

‘‘(1) the term ‘nonpostal services’ is limited to services offered by the Postal 

Service that are expressly authorized by this chapter and are not postal products or services; 

‘‘(2) the term ‘Postal Service advertising program’ means a program, managed 

by the Postal Service, by which the Postal Service receives revenues from entities which advertise at Postal Service facilities and on Postal Service vehicles; 

‘‘(3) the term ‘Postal Service program for State governments’ means a program, managed by the Postal Service, by which the Postal Service receives revenue from State governments (including their agencies) for providing services 

on their behalf at Postal Service facilities; 

‘‘(4) the term ‘attributable costs’ has the same meaning as is given such term 

in section 3631; and 

‘‘(5) the term ‘year’ means a fiscal year. 

‘‘§ 3703. Postal Service advertising program 

‘‘Notwithstanding any other provision of this title, the Postal Service may establish and manage a program that allows entities to advertise at Postal Service facilities and on Postal Service vehicles. Such a program shall be subject to the following 

requirements: 

‘‘(1) The Postal Service shall at all times ensure advertising it permits is consistent with the integrity of the Postal Service. 

‘‘(2) Any advertising program is required to cover a minimum of 200 percent 

of its attributable costs in each year. 

‘‘(3) All advertising expenditures and revenues are subject to annual compliance determination (including remedies for noncompliance) applicable to nonpostal products. 

‘‘(4) Total advertising expenditures and revenues must be disclosed in Postal 

Service annual reports. 

‘‘§ 3704. Postal Service program for State governments 

‘‘(a) IN GENERAL.—Notwithstanding any other provision of this title, the Postal 

Service may establish a program to provide services for agencies of State governments within the United States, but only if such services— 

‘‘(1) shall provide enhanced value to the public, such as by lowering the cost 

or raising the quality of such services or by making such services more accessible; 

‘‘(2) do not interfere with or detract from the value of postal services, including— 

‘‘(A) the cost and efficiency of postal services; and 

‘‘(B) access to postal retail service, such as customer waiting time and access to parking; and 

‘‘(3) provide a reasonable contribution to the institutional costs of the Postal 

Service, defined as reimbursement for each service and to each agency covering 

at least 150 percent of the attributable costs of such service in each year. 

‘‘(b) PUBLIC NOTICE.—At least 90 days before offering any services under this section, the Postal Service shall make each agreement with State agencies readily 

available to the public on its website, including a business plan that describes the 

specific services to be provided, the enhanced value to the public, terms of reimbursement, the estimated annual reimbursement to the Postal Service, and the estimated percentage of attributable Postal Service costs that will be covered by reimbursement (with documentation to support these estimates). The Postal Service 

shall solicit public comment for at least 30 days, with comments posted on its 

website, followed by its written response posted on its website at least 30 days before offering such services. 

‘‘(c) APPROVAL REQUIRED.—The Governors of the Postal Service shall approve the 

provision of services under this section by a recorded vote, with at least 2⁄3 of its 

membership voting for approval, with the vote publicly disclosed on the Postal Service website. 

‘‘(d) CLASSIFICATION OF SERVICES.—All services for a given agency provided under 

this section shall be classified as a separate activity subject to the requirements of 

annual reporting under section 3706. Such reporting shall also include information 

on the quality of service and related information to demonstrate that it satisfied the 


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requirements of subsection (a). Information provided under this section shall be according to requirements that the Postal Regulatory Commission shall by regulation 

prescribe. 

‘‘(e) DEFINITIONS.—For the purpose of this section— 

‘‘(1) the term ‘State’ includes the District of Columbia, the Commonwealth of 

Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the 

Commonwealth of the Northern Mariana Islands, and any other territory or 

possession of the United States; and 

‘‘(2) the term ‘United States’, when used in a geographical sense, means the 

States. 

‘‘§ 3705. Postal Service program for other government agencies 

‘‘(a) IN GENERAL.—The Postal Service may establish a program to provide property and services for other government agencies within the meaning of section 411, 

but only if such program provides a reasonable contribution to the institutional 

costs of the Postal Service, defined as reimbursement by each agency that covers 

at least 100 percent of the attributable costs of all property and service provided 

by the Postal Service in a each year to such agency. 

‘‘(b) CLASSIFICATION OF SERVICES.—For each agency, all property and services provided by the Postal Service under this section shall be classified as a separate activity subject to the requirements of annual reporting under section 3706. Information 

provided under this section shall be according to requirements that the Postal Regulatory Commission shall by regulation prescribe. 

‘‘§ 3706. Transparency and accountability for nonpostal services 

‘‘(a) ANNUAL REPORTS TO THE COMMISSION.— ‘‘(1) IN GENERAL.—The Postal Service shall, no later than 90 days after the 

end of each year, prepare and submit to the Postal Regulatory Commission a 

report (together with such nonpublic annex to the report as the Commission 

may require under subsection (b)) which shall analyze costs, revenues, rates, 

and quality of service for this chapter, using such methodologies as the Commission shall by regulation prescribe, and in sufficient detail to demonstrate compliance with all applicable requirements of this chapter. 

‘‘(2) AUDITS.—The Inspector General shall regularly audit the data collection 

systems and procedures utilized in collecting information and preparing such 

report. The results of any such audit shall be submitted to the Postal Service 

and the Postal Regulatory Commission. 

‘‘(b) SUPPORTING MATTER.—The Postal Regulatory Commission shall have access, 

in accordance with such regulations as the Commission shall prescribe, to the working papers and any other supporting matter of the Postal Service and the Inspector 

General in connection with any information submitted under this section. 

‘‘(c) CONTENT AND FORM OF REPORTS.— ‘‘(1) IN GENERAL.—The Postal Regulatory Commission shall, by regulation, 

prescribe the content and form of the public reports (and any nonpublic annex 

and supporting matter relating to the report) to be provided by the Postal Service under this section. Such reports shall be included with the annual compliance determination reported under section 3653. In carrying out this subsection, 

the Commission shall give due consideration to— 

‘‘(A) providing the public with timely, adequate information to assess 

compliance; 

‘‘(B) avoiding unnecessary or unwarranted administrative effort and expense on the part of the Postal Service; and 

‘‘(C) protecting the confidentiality of information that is commercially sensitive or is exempt from public disclosure under section 552(b) of title 5. 

‘‘(2) REVISED REQUIREMENTS.—The Commission may, on its own motion or on 

request of any interested party, initiate proceedings (to be conducted in accordance with regulations that the Commission shall prescribe) to improve the quality, accuracy, or completeness of Postal Service data required by the Commission under this subsection whenever it shall appear that— 

‘‘(A) the attribution of costs or revenues to property or services under this 

chapter has become significantly inaccurate or can be significantly improved; 

‘‘(B) the quality of service data provided to the Commission for annual reports under this chapter has become significantly inaccurate or can be significantly improved; or 

‘‘(C) such revisions are, in the judgment of the Commission, otherwise necessitated by the public interest. 

‘‘(d) CONFIDENTIAL INFORMATION.— 

‘‘(1) IN GENERAL.—If the Postal Service determines that any document or portion of a document, or other matter, which it provides to the Postal Regulatory 


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Commission in a nonpublic annex under this section contains information which 

is described in section 410(c) of this title, or exempt from public disclosure 

under section 552(b) of title 5, the Postal Service shall, at the time of providing 

such matter to the Commission, notify the Commission of its determination, in 

writing, and describe with particularity the documents (or portions of documents) or other matter for which confidentiality is sought and the reasons 

therefor. 

‘‘(2) TREATMENT.—Any information or other matter described in paragraph (1) 

to which the Commission gains access under this section shall be subject to 

paragraphs (2) and (3) of section 504(g) in the same way as if the Commission 

had received notification with respect to such matter under section 504(g)(1). 

‘‘(e) ANNUAL COMPLIANCE DETERMINATION.— ‘‘(1) OPPORTUNITY FOR PUBLIC COMMENT.—After receiving the reports required 

under subsection (a) for any year, the Postal Regulatory Commission shall 

promptly provide an opportunity for comment on such reports by any interested 

party, and an officer of the Commission who shall be required to represent the 

interests of the general public. 

‘‘(2) DETERMINATION OF COMPLIANCE OR NONCOMPLIANCE.—Not later than 90 

days after receiving the submissions required under subsection (a) with respect 

to a year, the Postal Regulatory Commission shall make a written determination as to whether any nonpostal activities during such year were or were not 

in compliance with applicable provisions of this chapter (or regulations promulgated under this chapter). The Postal Regulatory Commission shall issue a determination of noncompliance if the requirements for coverage of attributable 

costs are not met. If, with respect to a year, no instance of noncompliance is 

found to have occurred in such year, the written determination shall be to that 

effect. 

‘‘(3) NONCOMPLIANCE.—If, for a year, a timely written determination of noncompliance is made under this chapter, the Postal Regulatory Commission shall 

take appropriate action. If the requirements for coverage of attributable costs 

specified by this chapter are not met, the Commission shall, within 60 days 

after the determination, prescribe remedial action to restore compliance as soon 

as practicable, which shall also include the full restoration of revenue shortfalls 

during the following fiscal year. The Commission may order the Postal Service 

to discontinue a nonpostal service under section 3703 or 3704 that persistently 

fails to meet cost coverage requirements. 

‘‘(4) ANY DELIBERATE NONCOMPLIANCE.—In addition, in cases of deliberate 

noncompliance by the Postal Service with the requirements of this chapter, the 

Postal Regulatory Commission may order, based on the nature, circumstances, 

extent, and seriousness of the noncompliance, a fine (in the amount specified 

by the Commission in its order) for each incidence of noncompliance. All receipts from fines imposed under this subsection shall be deposited in the general fund of the Treasury of the United States.’’. 

(2) CLERICAL AMENDMENT.—The table of chapters at the beginning of part IV 

is amended by adding after the item relating to chapter 36 the following: 

‘‘37. Nonpostal Services .................................................................................................................................... 3701’’. 

(b) CONFORMING AMENDMENTS.— (1) SECTION 404(e).—Section 404(e) is amended by adding at the end the following: 

‘‘(6) Nothing in this section shall be considered to prevent the Postal Service from 

establishing nonpostal products and services that are expressly authorized by chapter 37.’’. 

(2) SECTION 411.—The last sentence of section 411 is amended by striking ‘‘including reimbursability’’ and inserting ‘‘including reimbursability within the 

limitations of chapter 37’’. 

(3) TREATMENT OF EXISTING NONPOSTAL SERVICES.—All nonpostal services continued pursuant to section 404(e) of title 39, United States Code, shall be considered to be expressly authorized by chapter 37 of such title (as added by subsection (a)(1)) and shall be subject to the requirements of such chapter. 

SEC. 408. REIMBURSEMENT OF ALASKA BYPASS MAIL COSTS. 

(a) COST ESTIMATES BY POSTAL REGULATORY COMMISSION.—Section 3651(b) is 

amended— 

(1) by redesignating paragraph (2) as paragraph (3); and 

(2) by inserting after paragraph (1) the following: 

‘‘(2) ALASKA BYPASS MAIL COSTS.—In addition to the information required 

under subsection (a), each report under this section shall also include, with respect to the period covered by such report, an estimate of the costs incurred by 

the Postal Service in providing Alaska bypass mail service under section 5402.’’. 


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(b) REIMBURSEMENTS.— 

(1) IN GENERAL.—Chapter 54 is amended by adding at the end the following: 

‘‘§ 5404. Reimbursement of Alaska bypass mail costs 

‘‘(a) IN GENERAL.—The State of Alaska, on an annual basis, shall make a payment 

to the Postal Service to reimburse the Postal Service for its costs in providing Alaska bypass mail service under section 5402 of this title. 

‘‘(b) DATE OF FIRST PAYMENT.—The State of Alaska shall make its first payment 

under subsection (a) on or before the last day of the first fiscal year of the State 

of Alaska beginning after the date of enactment of this section. 

‘‘(c) PAYMENT AMOUNTS.— 

‘‘(1) DETERMINATION OF AMOUNTS.—The amount of a payment under subsection (a) shall be determined based on the most recent cost estimate prepared 

by the Postal Regulatory Commission under section 3651(b)(2) of this title (in 

this subsection referred to as the ‘cost estimate’). 

‘‘(2) FIRST PAYMENT.—The first payment under subsection (a) shall be in an 

amount equal to 20 percent of the cost estimate. 

‘‘(3) SUBSEQUENT PAYMENTS.—Each subsequent payment under subsection (a) 

shall be in an amount equal to a percentage of the cost estimate determined 

by adding 20 percent to the percentage due in the prior year, except that no 

payment shall exceed 100 percent of the cost estimate. 

‘‘(d) NOTICE OF PAYMENT AMOUNTS.—Not later than 30 days after the date of 

issuance of a cost estimate by the Postal Regulatory Commission under section 

3651(b)(2) of this title, the Postal Service shall furnish the State of Alaska with 

written notice of the amount of the next payment due under subsection (a). 

‘‘(e) DEPOSIT OF PAYMENTS.—Not later than the last day of the fiscal year of the 

State of Alaska in which notice of a payment is provided under subsection (d)— 

‘‘(1) the State of Alaska shall transmit the payment to the Postal Service; and 

‘‘(2) the Postal Service shall deposit the payment in the Postal Service Fund.’’. 

(2) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 

54 is amended by adding at the end the following: 

‘‘5404. Reimbursement of Alaska bypass mail costs.’’. 

SEC. 409. APPROPRIATIONS MODERNIZATION. 

(a) IN GENERAL.—Section 2401 is amended by striking subsections (b) through (d). 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall be effective 

with respect to fiscal years beginning after the date of enactment of this Act. 

SEC. 410. RETIREE HEALTH CARE BENEFIT PAYMENT DEFERRAL. 

Section 8909a of title 5, United States Code, is amended— 

(1) in the section heading, by striking ‘‘Benefit’’ and inserting ‘‘Benefits’’; 

(2) in subsection (d)(3)(A)(v), by striking ‘‘$5,500,000,000’’ and inserting 

‘‘$1,000,000,000’’; 

(3) in subsection (d)(3)(A)(ix), by striking ‘‘$5,700,000,000’’ and inserting 

‘‘$7,950,000,000’’; and 

(4) in subsection (d)(3)(A)(x), by striking ‘‘$5,800,000,000’’ and inserting 

‘‘$8,050,000,000’’. 

TITLE V—POSTAL CONTRACTING REFORM 

SEC. 501. CONTRACTING PROVISIONS. 

(a) IN GENERAL.—Part I is amended by adding at the end the following: 

‘‘CHAPTER 7—CONTRACTING PROVISIONS 

‘‘Sec. 

‘‘701. Definitions. 

‘‘702. Advocate for competition. 

‘‘703. Delegation of contracting authority. 

‘‘704. Posting of noncompetitive purchase requests for noncompetitive contracts. 

‘‘705. Review of ethical issues. 

‘‘706. Ethical restrictions on participation in certain contracting activity. 

‘‘§ 701. Definitions 

‘‘In this chapter— 

‘‘(1) the term ‘contracting officer’ means an employee of a covered postal entity 

who has authority to enter into a postal contract; 

‘‘(2) the term ‘covered postal entity’ means— 

‘‘(A) the Postal Service; or 

‘‘(B) the Postal Regulatory Commission; 


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‘‘(3) the term ‘head of a covered postal entity’ means— 

‘‘(A) in the case of the Postal Service, the Postmaster General; or 

‘‘(B) in the case of the Postal Regulatory Commission, the Chairman of 

the Postal Regulatory Commission; 

‘‘(4) the term ‘postal contract’ means— 

‘‘(A) in the case of the Postal Service, any contract (including any agreement or memorandum of understanding) entered into by the Postal Service 

for the procurement of goods or services; or 

‘‘(B) in the case of the Postal Regulatory Commission, any contract (including any agreement or memorandum of understanding) in an amount exceeding the simplified acquisition threshold (as defined in section 134 of 

title 41 and adjusted under section 1908 of such title) entered into by the 

Postal Regulatory Commission for the procurement of goods or services; and 

‘‘(5) the term ‘senior procurement executive’ means the senior procurement executive of a covered postal entity. 

‘‘§ 702. Advocate for competition 

‘‘(a) ESTABLISHMENT AND DESIGNATION.— 

‘‘(1) There is established in each covered postal entity an advocate for competition. 

‘‘(2) The head of each covered postal entity shall designate for the covered 

postal entity 1 or more officers or employees (other than the senior procurement 

executive) to serve as the advocate for competition. 

‘‘(b) RESPONSIBILITIES.—The advocate for competition of a covered postal entity 

shall— 

‘‘(1) be responsible for promoting— 

‘‘(A) the contracting out of functions of the covered postal entity that the 

private sector can perform equally well or better, and at lower cost; and 

‘‘(B) competition to the maximum extent practicable consistent with obtaining best value by promoting the acquisition of commercial items and 

challenging barriers to competition; 

‘‘(2) review the procurement activities of the covered postal entity; and 

‘‘(3) prepare and transmit the annual report required under subsection (c). 

‘‘(c) ANNUAL REPORT.— 

‘‘(1) PREPARATION.—The advocate for competition of a covered postal entity 

shall prepare an annual report describing the following: 

‘‘(A) The activities of the advocate under this section. 

‘‘(B) Initiatives required to promote contracting out and competition. 

‘‘(C) Barriers to contracting out and competition. 

‘‘(D) In the case of the report prepared by the competition advocate of the 

Postal Service, the number of waivers made by the Postal Service under 

section 704(c). 

‘‘(2) TRANSMISSION.—The report under this subsection shall be transmitted— 

‘‘(A) to Congress; 

‘‘(B) to the head of the postal entity; 

‘‘(C) to the senior procurement executive of the entity; 

‘‘(D) in the case of the competition advocate of the Postal Service, to each 

member of the Postal Service Board of Governors; and 

‘‘(E) in the case of the competition advocate of the Postal Regulatory Commission, to each of the Commissioners of the Commission. 

‘‘§ 703. Delegation of contracting authority 

‘‘(a) IN GENERAL.— 

‘‘(1) POLICY.—Not later than 60 days after the date of enactment of this chapter, the head of each covered postal entity shall issue a policy on contracting 

officer delegations of authority for postal contracts for the covered postal entity. 

‘‘(2) CONTENTS.—The policy issued under paragraph (1) shall require that— 

‘‘(A) notwithstanding any delegation of authority with respect to postal 

contracts, the ultimate responsibility and accountability for the award and 

administration of postal contracts resides with the senior procurement executive; and 

‘‘(B) a contracting officer shall maintain an awareness of and engagement 

in the activities being performed on postal contracts of which that officer 

has cognizance, notwithstanding any delegation of authority that may have 

been executed. 

‘‘(b) POSTING OF DELEGATIONS.— 

‘‘(1) IN GENERAL.—The head of each covered postal entity shall make any delegation of authority for postal contracts outside the functional contracting unit 

readily available and accessible on the website of the covered postal entity. 


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‘‘(2) EFFECTIVE DATE.—This paragraph shall apply to any delegation of authority made on or after 30 days after the date of enactment of this chapter. 

‘‘§ 704. Posting of noncompetitive purchase requests for noncompetitive 

contracts 

‘‘(a) POSTING REQUIRED.— 

‘‘(1) POSTAL REGULATORY COMMISSION.—The Postal Regulatory Commission 

shall make the noncompetitive purchase request for any noncompetitive award 

for any contract (including any agreement or memorandum of understanding) 

entered into by the Postal Regulatory Commission for the procurement of goods 

and services, in an amount of $20,000 or more, including the rationale supporting the noncompetitive award, publicly available on the website of the Postal Regulatory Commission— 

‘‘(A) not later than 14 days after the date of the award of the noncompetitive contract; or 

‘‘(B) not later than 30 days after the date of the award of the noncompetitive contract, if the basis for the award was a compelling business interest. 

‘‘(2) POSTAL SERVICE.—The Postal Service shall make the noncompetitive purchase request for any noncompetitive award of a postal contract in an amount 

of $250,000 or more, including the rationale supporting the noncompetitive 

award, publicly available on the website of the Postal Service— 

‘‘(A) not later than 14 days after the date of the award; or 

‘‘(B) not later than 30 days after the date of the award, if the basis for 

the award was a compelling business interest. 

‘‘(3) ADJUSTMENTS TO THE POSTING THRESHOLD FOR THE POSTAL SERVICE.— 

‘‘(A) REVIEW AND DETERMINATION.—Not later than January 31 of each 

year, the Postal Service shall— 

‘‘(i) review the $250,000 threshold established under paragraph (2); 

and 

‘‘(ii) based on any change in the Consumer Price Index for all-urban 

consumers of the Department of Labor, determine whether an adjustment to the threshold shall be made. 

‘‘(B) AMOUNT OF ADJUSTMENTS.—An adjustment under subparagraph (A) 

shall be made in increments of $5,000. If the Postal Service determines that 

a change in the Consumer Price Index for a year would require an adjustment in an amount that is less than $5,000, the Postal Service may not 

make an adjustment to the threshold for the year. 

‘‘(4) EFFECTIVE DATE.—This subsection shall apply to any noncompetitive contract awarded on or after the date that is 90 days after the date of enactment 

of this chapter. 

‘‘(b) PUBLIC AVAILABILITY.— 

‘‘(1) IN GENERAL.—Subject to paragraph (2), the information required to be 

made publicly available by a covered postal entity under subsection (a) shall be 

readily accessible on the website of the covered postal entity. 

‘‘(2) PROTECTION OF PROPRIETARY INFORMATION.—A covered postal entity 

shall— 

‘‘(A) carefully screen any description of the rationale supporting a noncompetitive award required to be made publicly available under subsection 

(a) to determine whether the description includes proprietary data (including any reference or citation to the proprietary data) or security-related information; and 

‘‘(B) remove any proprietary data or security-related information before 

making publicly available a description of the rationale supporting a noncompetitive award. 

‘‘(c) WAIVERS.— 

‘‘(1) WAIVER PERMITTED.—If the Postal Service determines that making a noncompetitive purchase request for a postal contract of the Postal Service publicly 

available would risk placing the Postal Service at a competitive disadvantage 

relative to a private sector competitor, the senior procurement executive, in consultation with the advocate for competition of the Postal Service, may waive the 

requirements under subsection (a). 

‘‘(2) FORM AND CONTENT OF WAIVER.— 

‘‘(A) FORM.—A waiver under paragraph (1) shall be in the form of a written determination placed in the file of the contract to which the noncompetitive purchase agreement relates. 

‘‘(B) CONTENT.—A waiver under paragraph (1) shall include— 

‘‘(i) a description of the risk associated with making the noncompetitive purchase request publicly available; and 


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‘‘(ii) a statement that redaction of sensitive information in the noncompetitive purchase request would not be sufficient to protect the 

Postal Service from being placed at a competitive disadvantage relative 

to a private sector competitor. 

‘‘(3) DELEGATION OF WAIVER AUTHORITY.—The Postal Service may not delegate 

the authority to approve a waiver under paragraph (1) to any employee having 

less authority than the senior procurement executive. 

‘‘§ 705. Review of ethical issues 

‘‘If a contracting officer identifies any ethical issues relating to a proposed contract 

and submits those issues and that proposed contract to the designated ethics official 

for the covered postal entity before the awarding of that contract, that ethics official 

shall— 

‘‘(1) review the proposed contract; and 

‘‘(2) advise the contracting officer on the appropriate resolution of ethical 

issues. 

‘‘§ 706. Ethical restrictions on participation in certain contracting activity 

‘‘(a) DEFINITIONS.—In this section— 

‘‘(1) the term ‘covered employee’ means— 

‘‘(A) a contracting officer; or 

‘‘(B) any employee of a covered postal entity whose decision making affects a postal contract as determined by regulations prescribed by the head 

of a covered postal entity; 

‘‘(2) the term ‘final conviction’ means a conviction, whether entered on a verdict or plea, including a plea of nolo contendere, for which a sentence has been 

imposed; and 

‘‘(3) the term ‘covered relationship’ means a covered relationship described in 

section 2635.502(b)(1) of title 5, Code of Federal Regulations, or any successor 

thereto. 

‘‘(b) IN GENERAL.— ‘‘(1) REGULATIONS.—The head of each covered postal entity shall prescribe 

regulations that— 

‘‘(A) require a covered employee to include in the file of any noncompetitive purchase request for a noncompetitive postal contract a written certification that— 

‘‘(i) discloses any covered relationship of the covered employee; and 

‘‘(ii) states that the covered employee will not take any action with 

respect to the noncompetitive purchase request that affects the financial interests of a friend, relative, or person with whom the covered employee is affiliated in a nongovernmental capacity, or otherwise gives 

rise to an appearance of the use of public office for private gain, as described in section 2635.702 of title 5, Code of Federal Regulations, or 

any successor thereto; 

‘‘(B) require a contracting officer to consult with the ethics counsel for the 

covered postal entity regarding any disclosure made by a covered employee 

under subparagraph (A)(i), to determine whether participation by the covered employee in the noncompetitive purchase request would give rise to a 

violation of part 2635 of title 5, Code of Federal Regulations (commonly referred to as the Standards of Ethical Conduct for Employees of the Executive Branch), or any successor thereto; 

‘‘(C) require the ethics counsel for a covered postal entity to review any 

disclosure made by a contracting officer under subparagraph (A)(i) to determine whether participation by the contracting officer in the noncompetitive 

purchase request would give rise to a violation of part 2635 of title 5, Code 

of Federal Regulations (commonly referred to as the Standards of Ethical 

Conduct for Employees of the Executive Branch), or any successor thereto; 

‘‘(D) under subsections (d) and (e) of section 2635.502 of title 5, Code of 

Federal Regulations, or any successor thereto, require the ethics counsel for 

a covered postal entity to— 

‘‘(i) authorize a covered employee that makes a disclosure under subparagraph (A)(i) to participate in the noncompetitive postal contract; or 

‘‘(ii) disqualify a covered employee that makes a disclosure under 

subparagraph (A)(i) from participating in the noncompetitive postal 

contract; 

‘‘(E) require a contractor to timely disclose to the contracting officer in a 

bid, solicitation, award, or performance of a postal contract any conflict of 

interest with a covered employee; and 

‘‘(F) include authority for the head of the covered postal entity to grant 

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terest, if the head of the covered postal entity determines that the waiver 

or mitigation is in the best interests of the covered postal entity. 

‘‘(2) POSTING OF WAIVERS.—Not later than 30 days after the head of a covered 

postal entity grants a waiver described in paragraph (1)(F), the head of the covered postal entity shall make the waiver publicly available on the website of the 

covered postal entity. 

‘‘(c) CONTRACT VOIDANCE AND RECOVERY.— 

‘‘(1) UNLAWFUL CONDUCT.—In any case in which there is a final conviction for 

a violation of any provision of chapter 11 of title 18 relating to a postal contract, 

the head of a covered postal entity may— 

‘‘(A) void that contract; and 

‘‘(B) recover the amounts expended and property transferred by the covered postal entity under that contract. 

‘‘(2) OBTAINING OR DISCLOSING PROCUREMENT INFORMATION.— 

‘‘(A) IN GENERAL.—In any case in which a contractor under a postal contract fails to timely disclose a conflict of interest to the appropriate contracting officer as required under the regulations promulgated under subsection (b)(1)(E), the head of a covered postal entity may— 

‘‘(i) void that contract; and 

‘‘(ii) recover the amounts expended and property transferred by the 

covered postal entity under that contract. 

‘‘(B) CONVICTION OR ADMINISTRATIVE DETERMINATION.—A case described 

under subparagraph (A) is any case in which— 

‘‘(i) there is a final conviction for an offense punishable under section 

2105 of title 41; or 

‘‘(ii) the head of a covered postal entity determines, based upon a preponderance of the evidence, that the contractor or someone acting for 

the contractor has engaged in conduct constituting an offense punishable under section 2105 of such title.’’. 

(b) CLERICAL AMENDMENT.—The table of chapters at the beginning of part I is 

amended by adding at the end the following: 

‘‘7. Contracting Provisions .............................................................................................................................. 701’’. 

SEC. 502. TECHNICAL AMENDMENT TO DEFINITION. 

Section 7101(8) of title 41, United States Code, is amended— 

(1) by striking ‘‘and’’ at the end of subparagraph (C); 

(2) by striking the period at the end of subparagraph (D) and inserting ‘‘; 

and’’; and 

(3) by adding at the end the following: 

‘‘(E) the United States Postal Service and the Postal Regulatory Commission.’’. 

COMMITTEE STATEMENT AND VIEWS

PURPOSE AND SUMMARY

H.R. 2309, the Postal Reform Act of 2011, would restore the financial solvency of the United States Postal Service (‘‘the Postal 

Service’’ or ‘‘USPS’’) and ensure the efficient and affordable nationwide delivery of mail. The bill makes the reforms necessary to return the Postal Service to solvency and to protect the universal 

service mandate without creating a one-time or ongoing taxpayer 

subsidy, or reneging on obligations to postal employees and retirees. To accomplish these objectives, the bill establishes a receiverlike entity to enable the Postal Service—in the event of a default 

on obligations to the Federal Government—to bring expenses in 

line with revenues in an expedited manner. Other provisions of the 

bill ensure the long-term sustainability of the Postal Service by 

eliminating a number of unfunded Congressional mandates, modernizing the postal workforce, rightsizing postal infrastructure to 

correspond with diminishing demand, and streamlining postal regulation. 


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BACKGROUND AND NEED FOR LEGISLATION

The Postal Service is at a critical juncture. Just since fiscal year 

2007, annual mail volume is down 21% and annual revenue is 

down more than $9 billion. The Postal Service lost a record $10.6 

billion in Fiscal Year 2011, including a $5.5 billion retiree health 

care payment that was deferred. The $10.6 billion deficit comes on 

the heels of an $8.5 billion deficit in fiscal year 2010. On June 24, 

2011, the Postal Service began defaulting to the Federal Government on payments due for the employer portion of workers’ pension 

contribution. The Postal Service is also unable to make a statutorily required $5.5 billion payment to prefund retiree health expenses for current employees originally due on September 30, 2011. 

With its $15 billion line of credit with the U.S. Treasury virtually 

exhausted, the Postal Service—by its own admission—will likely 

not be able to make payroll by next fall. 

This is not a temporary cash-flow problem. The Postal Service 

expects the electronic diversion of mail to continue indefinitely. Despite shedding more than 100,000 workers through attrition over 

the last five years, the Postal Service has failed to cut costs fast 

enough to offset the drop-off in mail and revenue. Consequently, 

this venerable American institution rests on the brink of insolvency. Without the significant structural reforms prescribed by this 

legislation, eight million American jobs tied to the mailing industry 

could be put at risk. 

HISTORY

The existence of an American postal service predates our Constitution. As section 101 of title 39 of the U.S. Code states: ‘‘The 

Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the 

people.’’ 

While this basic mission remains unchanged today, the Postal 

Service has from its inception evolved to meet changing needs—primarily via the extension of new services and the reduction of unnecessary services. One major step toward our modern Postal Service came in 1863, when free home delivery first began in urban 

areas, which almost always involved letter carriers personally 

handing mail to customers. Prior to that date, Americans were required to venture to a post office in order to collect their mail. 

While it took several more decades, free home delivery began to be 

extended to rural areas in 1902. Additionally, in the early decades 

of the 20th Century, many residential addresses received mail delivery twice a day, and businesses received mail up to four times 

per day. 

As the use of mail changed, however, these services changed as 

well. With letter carriers waiting as long as an hour per day for 

patrons to answer the door, by 1923 the Postal Service required a 

mail slot or box for delivery. By 1950, the Postal Service had 

phased out the second residential delivery, and multiple deliveries 

to businesses disappeared soon after. Importantly, these changes 

enabled the Postal Service to become more efficient, keep prices 

down, and ultimately better serve the customer. 


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The 1970 reform 

Despite the best efforts of many involved, the postal system by 

1970 was edging toward disarray. Conditions deteriorated to such 

a degree that in March 1970 postal worker strikes broke out 

around the nation, eventually involving more than 150,000 postal 

employees. The workers were protesting low wages and unsafe 

working conditions, but it was clear to all observers that the Post 

Office Department needed fundamental reform in order to properly 

address both the valid concerns of the workers and crumbling postal infrastructure. In response to these problems, Congress enacted 

the most significant postal reform in the Nation’s history. This law, 

known as the Postal Reorganization Act, fundamentally transformed the institution from a taxpayer subsidized cabinet-level 

agency to a self-supporting, independent entity within the executive branch. 

On July 1, 1971, the United States Postal Service replaced the 

Post Office Department as the Nation’s mail service. While much 

of the customer-facing infrastructure remained unchanged, the institution was now essentially chartered to act in a business-like 

fashion. Prior to the 1970 reform, the law stated that the Post Office Department ‘‘should be operated in an efficient manner,’’ but 

‘‘it clearly is not a business enterprise.’’ The 1970 law reversed this 

paradigm and, in the words of the House report on the legislation, 

provided the ‘‘authority to conduct the affairs of the Postal Establishment on a business-like basis.’’ As a result, business principles 

largely replaced political influence in the decision-making of the 

postal establishment. After the 1970 reforms, postmasters were no 

longer appointed by the President, Congress no longer determined 

postage rate increases, and the taxpayer subsidy of postal operations was phased out. Under the new policy, postmasters began 

to be selected on merit rather than by patronage; the Postal Rate 

Commission was created to properly adjudicate rate increases; and 

the break-even standard came into force, requiring postage rates to 

cover the operating expenses of the Postal Service. Finally, postal 

workers were granted the right to collectively bargain over wages 

and benefits, a privilege that few federal employees enjoy even 

today. 

The ultimate result of the 1970 act was a ‘‘grand bargain’’ of 

sorts. To the extent practicable, it divorced the day-to-day operations of the Postal Service from political control as it gave the new 

entity billions of dollars of taxpayer-owned assets. The bargain 

also, however, protected the taxpayers from subsidizing operating 

costs of the new agency. Upon the creation of the Postal Service, 

the Federal Government handed over to the newly created Postal 

Service—free of charge—all of the assets of its predecessor, the 

Post Office Department. The transfer of assets to the Postal Service 

included more than 30,000 post offices, tens of thousands of vehicles, a trained workforce of 700,000 employees, and a monopoly on 

the use of the mailbox. Once invested with postal assets, the Postal 

Service was expected to maintain universal access to postal services, run the institution at a break-even rate, pay the pension and 

retiree health care benefits of all postal workers, and operate without taxpayer subsidy. 


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The 2006 reform 

In many ways, the 1970 reform was incredibly successful. Labor 

issues were fairly addressed, and the postal infrastructure was 

modernized and automated. The break-even mandate, however, 

had the unfortunate effect of discouraging the Postal Service from 

making difficult decisions as mail usage began to change. The Postal Service could break even by choosing to raise rates rather than 

cut costs—the latter being a painful option that necessarily entailed confronting specific and vocal interests. At a time when the 

postal monopoly had great value, raising rates was an economically 

viable strategy: Even if postage rates increased, individuals and 

businesses often had little choice but to continue to use mail. By 

the late 1990s, however, the power of the postal monopoly became 

increasingly diluted by the emergence of more alternatives to the 

mail. 

The volume of profitable First-Class Mail peaked in 2001 as customers increasingly substituted electronic alternatives for hardcopy letters, placing the Postal Service under growing financial 

pressure. Meanwhile, USPS faced mounting obligations for retiree 

health benefits for its aging workforce because those benefits were 

financed only on a pay-as-you-go basis. Further, a growing consensus began to conclude that the lengthy rate-setting process 

under the 1970 law was preventing the Postal Service from responding quickly to an increasingly competitive marketplace. In 

short, the world was changing and it was becoming clear the Postal 

Service and postal laws would have to change with it. 

In 2006, after more than a decade of debate, Congress passed the 

Postal Accountability and Enhancement Act, a law specifically designed to prepare the Postal Service for the likelihood of continued 

declines in profitable mail volume in a competitive marketplace 

where the postal monopoly on delivery of hard copy mail would 

steadily decrease in value. The 2006 law built on the 1970 reform 

by enabling the Postal Service to operate even more like a business. This was done by essentially creating a profit motive for the 

Postal Service. The break-even mandate in place since 1971 was 

eliminated and replaced with a price cap on postage rate increases. 

The cap prevented unchecked rate increases, but it also allowed the 

Postal Service to turn a profit by increasing efficiency and cutting 

costs. The cap was designed to make the Postal Service to begin 

looking inward to address budget shortfalls in the exact way the 

Postal Service would if the monopoly were to lose its value and if 

rate increases were to fail to generate the necessary revenue. Further, the 2006 law gave the Postal Service greater flexibility to set 

and change postal rates, especially for its competitive products 

such as Express Mail and Priority Mail. This greater price flexibility was balanced with protections to ensure fair competition, 

transparency, and accountability. With liabilities for retiree expenses continuing to accrue, the law required the Postal Service to 

begin prefunding retiree health care benefits for current and 

former employees, beginning with a series of ten annual lump sum 

‘‘catch-up’’ payments to significantly reduce the unfunded liability 

of the retiree health care benefit. After the ten-year catch-up period, the remaining liability would be amortized over a forty year 

period, and the Postal Service would begin paying the ‘‘normal 

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crual basis in order that the Postal Service would have fully funded 

the workers’ retiree health care costs by the time of their retirement. This is the manner in which the Postal Service had long paid 

for retirees’ pension benefits. 

Taken as a whole, the reforms packaged in the 2006 law were 

designed to prepare the Postal Service for a future where profitable 

First-Class Mail would be increasingly supplanted by electronic alternatives and the postal monopoly could no longer be counted on 

to provide additional revenue with every increase in postage rates. 

Unfortunately, what legislators could not have known at the time 

was that the very challenge they were preparing the Postal Service 

to face would take place far sooner than anyone anticipated. During the first decade of the new century, the internet matured, technology rapidly evolved, and the average consumer quickly grew to 

rely on and trust electronic communication. As a result, electronic 

bill payment has boomed since 2001. The recent recession also 

spurred business mailers to adopt less costly alternatives to mail 

and to encourage customers to do likewise. Thus, after steadily increasing for more than 200 years, mail volume began to fall. In fiscal year 2006, total mail volume peaked at 213 billion pieces; now, 

just five years later, mail volume is at levels unseen since the late 

1980’s and continues to fall at an unforeseen rate exceeding all expectations. The economic realization of significant productivity 

gains from the increasing use of e-commerce signals almost no 

chance that mail volume will return. 

The mailing industry 

While the Postal Service is the second largest civilian employer 

in the United States, with more than 600,000 employees and more 

than $65 billion in revenue for fiscal year 2011, the institution is 

a relatively small part of the mailing industry as a whole. According to a 2010 industry-sponsored study, the mailing industry generated more than $1.1 trillion in economic activity in 2009 and was 

responsible for 8.7 million American jobs. This tremendous economic force, however, is very tightly interrelated with, and highly 

dependent on, a functional Postal Service for its continued success. 

Many Americans are unaware of the breadth of the mailing industry, which features jobs associated directly or indirectly with 

virtually every business, nonprofit organization, and government 

entity in the United States. The vast majority of all mail volume 

is generated by these entities, with only eleven percent generated 

by households and three percent representing consumer to consumer communication. The mailing industry is now operating on 

razor-thin margins after being hit hard by both the recession and 

electronic diversion. The fallout is stark. From June 2008 to June 

2009, the paper industry lost 9.5% of its workforce, the publishing 

industry lost 10.4%, and the printing industry lost 13%. If the Postal Service destabilizes for even a short period of time, these industries will be seriously imperiled, with dramatic consequences for 

the broader economy in which jobs are already too scarce. 

The challenge facing the Postal Service 

The decline in mail is not a temporary, recession-driven phenomenon. So far, Postal Service revenue has declined over $9 billion (12%) from its peak of $75 billion in fiscal year 2007, and the 


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Postal Service itself projects further declines for the foreseeable future. This revenue decrease is driven by the relentless decline in 

First-Class Mail, the Postal Service’s highly profitable core product. 

First-Class Mail volume peaked ten years ago and has been declining at an increasingly rapid rate as mailed bills, statements, and 

communications migrate to electronic alternatives. First-Class Mail 

volume declined 25% in the last five years and is projected to decline an additional 50% by the end of the decade. Meanwhile, the 

volume of Standard Mail (primarily advertising) declined 17% over 

the past five years and is projected to stagnate for the remainder 

of this decade, in part due to increased competition from internetbased advertising. Importantly, while Standard Mail is also highly 

profitable, its lower total cost compared to First-Class Mail means 

that it takes three pieces of Standard Mail to generate the revenue 

of one piece of First-Class Mail. Further, although the volume of 

packages delivered by the Postal Service is growing, they generate 

only a small part of revenues and cannot offset declines in FirstClass Mail. Most troubling of all is that even the Postal Service’s 

dire projections could prove overly optimistic if communication continues to move to digital technologies as quickly as in the recent 

past. GAO recently reported that such mail volume trends underscore the need for the Postal Service business model to undergo 

fundamental changes to reduce personnel and network-related 

costs. 

Eighty percent of the Postal Service’s costs are workforce-related, 

a proportion that has remained steady for many years despite vast 

changes in automation and information technology. These costs 

must be addressed as part of any serious reform effort. A longstanding, statutorily-mandated collective bargaining process tilted 

against Postal Service management has historically hindered the 

ability of the Postal Service to control these costs. This process has 

yielded contracts providing guaranteed wage increases, benefits exceeding those of other federal workers, and no-layoff protections 

that virtually no other federal employees enjoy. The most recent 

contract, ratified this spring by the Postal Service and the American Postal Workers Union (APWU), again provided guaranteed 

wage increases, failed to bring Postal Service coverage of health 

and life insurance benefits into parity with other federal agencies, 

and actually expanded no-layoff protections. With mail volume declining, the inability of the Postal Service to rightsize its workforce 

due to no-layoff protections has left the Postal Service in a situation where it must pay more and more workers to sit idle. The 

Postal Service has no mechanism to transition unneeded workers 

off the rolls and no money to provide incentives for employees to 

retire voluntarily. The ability to rightsize the Postal Service workforce is a vital component of a sustainable business model that will 

continue to provide attractive jobs and universal postal service. A 

statutory change is thus urgently needed to permit difficult but 

necessary workforce restructuring. 

The alleged CSRS ‘‘overpayment’’ 

One item initially left unclear by the 1970 postal reform was the 

division of responsibility for the pension obligations of individuals 

who worked for both the Post Office Department and its successor 

entity, the Postal Service. This issue was clarified in 1974, with the 


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enactment of P.L. 93–349. The 1974 law created an explicit cost allocation method requiring that the taxpayer pay pension costs generated by the Post Office Department and that the postal ratepayer 

pay pension costs generated by the Postal Service. Specifically, the 

law required the Postal Service to pay for ‘‘any estimated increase 

in the unfunded liability’’ of postal workers’ pensions that was the 

result of any action on the part of the Postal Service. Due to the 

‘‘high three’’ salary years federal pensions are based on and because the ‘‘high three’’ almost always occurs in the last three years 

of service, the Postal Service under this formula ultimately pays a 

greater portion of the applicable employee pensions than if the cost 

of the pensions were divided between the two entities based on the 

proportion of years an employee worked at each entity. Importantly, at the time this allocation formula was established, the parties involved recognized it as equitable in light of the tremendous 

free asset transfer of postal infrastructure to the Postal Service as 

well as the granting of the postal monopoly to the new entity. In 

a letter included in House Committee Report 93–120 to the bill 

that became P.L. 93–349, the Postal Service General Counsel 

wrote: 

After careful consideration—and in full awareness of the 

financial burdens enactment of this bill will impose—the 

Postal Service has concluded that it is proper, as a matter 

of principle, for these costs to be imposed on postal ratepayers rather than the taxpayers. Properly understood, the 

principle of postal self-sufficiency calls for those who use 

postal services to bear the costs of those services. 

That quote addresses the fundamental point of P.L. 93–349: the 

taxpayer should not pay for raises and pension increases unilaterally granted by the Postal Service to postal employees. 

Even so, both the USPS Office of Inspector General (USPS OIG) 

and Postal Regulatory Commission (PRC) issued reports in recent 

years alleging that the Office of Personnel Management’s (OPM) 

current method of allocating responsibility for Civil Service Retirement System (CSRS) pension benefits under P.L. 93–349 requires 

the Postal Service to shoulder an excessive share of employee retirement obligations. The USPS OIG and the PRC proposed alternate methodologies that they estimated would return $56 billion to 

$85 billion in pension ‘‘overpayments’’ from the Federal Government back to the Postal Service. The USPS IG claimed that amendments Congress made in the 2003 legislation actually required the 

Office of Personnel Management (OPM) to alter its allocation formula. Still, OPM, under both President Bush and President 

Obama, has stood by the existing allocation methodology and refutes the notion that there has been any CSRS ‘‘overpayment’’ by 

the Postal Service. Additionally, in February of this year, the OPM 

Inspector General (OPM IG) released a detailed report directly refuting the allegations raised by the USPS OIG and the PRC. 

Nevertheless, many legislators and interest groups continued to 

allege the existence of a CSRS ‘‘overpayment’’ and advocated that 

the return of the overpayment be made a central feature of any 

postal reform bill. In an effort to resolve the dispute, a bipartisan, 

bicameral group of legislators from the House and Senate committees of jurisdiction over the Postal Service requested that the nonVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00048 Fmt 6659 Sfmt 6602 E:\HR\OC\HR363P1.XXX HR363P1

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1 U.S. Government Accountability Office: U.S. Postal Service: Allocation of Responsibility for 

Pension Benefits between the Postal Service and the Federal Government, GAO–12–146, highlights, pages 9, 18, 19. October 17, 2011. Available at http://www.gao.gov/new.items/d12146.pdf. 

partisan U.S. Government Accountability Office (GAO) look into 

the issue. 

GAO’s report, released this past October, refuted the ‘‘overpayment’’ argument unequivocally. It found that: OPM’s current methodology complies with current law; no CSRS refund is owed to the 

Postal Service; and any change in the pension cost allocation formula that puts more of the funding burden on the Government 

would come at a dollar for dollar cost to the taxpayer. The GAO 

report stated: 1

• ‘‘The current methodology used by OPM for allocating responsibility for CSRS benefits between USPS and the federal government 

is consistent with applicable law. Congress created USPS in 1971 

as an independent, self-sustaining entity with a package of assets 

and obligations as well as competitive advantages and disadvantages. In 1974, Congress explicitly allocated responsibility to USPS 

for CSRS benefits attributable to post-1971 USPS pay increases 

and, although it revised aspects of the CSRS funding process in 

2003 and 2006, it did not alter the fundamental allocation of responsibility for CSRS benefits.’’ 

• ‘‘Although the USPS OIG and PRC reports present alternative 

methodologies for determining the allocation of pension costs, this 

determination is ultimately a policy choice rather than a question 

of accounting or actuarial standards.’’ 

• ‘‘Some have referred to overpayments that USPS has made to 

the CSRS fund. The term ‘‘overpayment’’ can imply an error of 

some type—mathematical, actuarial, or accounting. We have not 

found evidence of error of these types. Hence, any reallocation of 

CSRS benefit responsibility would be a significant change from a 

policy that has been in place since 1974 and not a correction of any 

actuarial or accounting methodological error.’’ 

• ‘‘While the USPS OIG and PRC reports make judgments about 

fairness, the 1974 law also implicitly reflected fairness. Congress 

considered that USPS was to be self-sustaining and that the Federal Government, which had no control over USPS pay increases, 

should not be liable for pension benefits attributable to those increases. Also, the USPS OIG and PRC reports assess the fairness 

of the allocation in isolation, looking only at pension costs. In the 

private sector, the fairness of the allocation of pension obligations 

between two businesses depends on the total package of assets and 

obligations—both pension and non-pension. Finally, the cost of 

USPS’s CSRS pension allocation based on the 1974 law has already 

been reflected in postal rates for most of the past four decades.’’ 

• ‘‘The key impacts of transferring assets out of the CSRS fund 

to USPS based on the current proposals would be to increase the 

Federal Government’s current and future unfunded pension liability by an estimated $56 billion to $85 billion. This liability would 

then be funded by the Federal Government using tax revenue, borrowing, or both. Also, CSRS beneficiaries would continue to receive 

their benefits under current law, even if the Federal Government’s 

unfunded CSRS liability increases, but this could indirectly create 

pressure to reduce pension benefits.’’ 


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• ‘‘Any change in the USPS’s share of responsibility for CSRS 

benefits would provide some temporary relief from the pressures 

USPS faces because of declining volume, revenue, and inflexible 

costs, but would not by itself address USPS’s long-term financial 

outlook. Such a transfer of CSRS funds would not be sufficient to 

repay all of USPS’s debt and address current and future operating 

deficits related to USPS’s inability to cut costs quickly enough to 

match declining mail volume and revenue.’’ • ‘‘The decline of First-Class Mail—USPS’s most profitable product—has accelerated as Americans shift to using electronic communications and other payment alternatives. This trend exposes 

weaknesses in USPS’s business model, which has relied on volume 

growth to help cover costs. To meet these changing customer needs, 

become more efficient, control costs, and keep rates affordable, 

USPS must modernize and restructure. To do so, it will need to become much leaner and more flexible.’’ 

Oversight hearings on postal reform 

To determine how best to ensure the solvency and viability of the 

Postal Service, the Oversight and Government Reform Committee 

and its Subcommittee on the Federal Workforce, the U.S. Postal 

Service, and Labor Policy held four hearings on topics related to 

the Postal Service between March and June of this year. The first 

hearing, entitled ‘‘Pushing the Envelope: The Looming Crisis at 

USPS,’’ was held by the subcommittee on March 2, 2011. It provided a broad overview of the major challenges facing the Postal 

Service. Members of the Subcommittee heard testimony from Postmaster General Patrick Donahoe, and Phillip Herr, a Director with 

the Government Accountability Office, along with other prominent 

members of the postal community. 

A reduction in workforce costs, the testimony made clear, was 

necessary in order for the Postal Service to remain financially viable in the coming years. Soon after the hearing, however, the Postal Service announced a tentative collective bargaining agreement 

with one of its largest unions, the American Postal Workers Union 

(APWU), which appeared to move in the wrong direction. In order 

to allow the Postal Service to explain how the agreement was in 

line with the financial and strategic goals of postal management, 

a full committee hearing was held on April 5, 2011, entitled ‘‘Are 

Postal Workforce Costs Sustainable?’’ At the hearing, members of 

the Committee heard from two members of the Postal Service 

Board of Governors, the Postmaster General, and Cliff Guffey, 

President of APWU. At this hearing, two important facts emerged. 

The first was that the Postal Service hoped to reduce its career 

workforce by more than 200,000 employees by 2020. The second 

was that the collective bargaining arbitration system is effectively 

broken and that the Postal Service has repeatedly agreed to contracts that do not provide Postal Service management the flexibility necessary to adapt to changing realities. 

The Federal Workforce Subcommittee followed up with two additional hearings. On May 12, 2011, the hearing entitled, ‘‘Where 

Have All the Letters Gone?—The Mailing Industry and Its Future,’’ 

brought together witnesses from across the mailing industry to 

help understand how they viewed the Postal Service and what 

types of reform they hoped to see. The witnesses, who represented 


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paper companies, printers, First-Class mailers, and marketing/ 

Standard mailers, all discussed the significant downsizing their industries had gone through, the importance of a viable Postal Service to their business models, and the need for the Postal Service to 

rapidly rightsize its infrastructure to keep costs down. The final 

hearing, entitled, ‘‘Postal Infrastructure: How Much Can We Afford?’’ was held on June 15, 2011. Testimony was heard from the 

Postal Service on its plans for facility rightsizing and from industry 

experts who provided analysis on the benefits and drawbacks of different infrastructure-related proposals. 

H.R. 2309, the Postal Reform Act of 2011 

Just one week after the Federal Workforce Subcommittee held its 

hearing on postal infrastructure, the Postal Service announced its 

intention to cease making its required employer contributions to 

the Federal Employee Retirement System as part of what it termed 

a ‘‘cash conservation’’ effort. These employer contributions are necessary in order to fully fund the pensions of postal employees. In 

foregoing these payments, the Postal Service effectively announced 

that its fiscal woes were beginning to yield real victims. Chairman 

Issa and Subcommittee Chairman Dennis Ross responded immediately. The next day, June 23, 2011, they introduced the Postal 

Reform Act (PRA). The PRA is the most comprehensive proposed 

reform of the Postal Service since its creation in 1970. The product 

of several months of drafting efforts, the bill attempts to give the 

Postal Service the tools necessary to succeed in the 21st Century. 

The PRA is designed to meet a core group of objectives by using 

a balanced, multifaceted approach. Drawn in part from the testimony received at the Committee’s hearings on the issue, as well as 

findings and recommendations dating back to the 2003 Presidential 

Commission on the Postal Service, the objectives include: (1) ensuring the Postal Service can continue to provide effective, affordable 

universal service; (2) ensuring the Postal Service will continue to 

meet all of its obligations to its employees and retirees; (3) addressing the short-term liquidity crisis facing the Postal Service; (4) enabling the Postal Service to bring expenses into line with revenues 

to ensure medium- and long-term viability; (5) streamlining regulation and enable the Postal Service to act like a business; and (6) 

protecting the self-funding nature of the Postal Service while preventing a taxpayer funded bailout that would defer and complicate 

the process of instituting the necessary fundamental reforms. 

Given the severity of the Postal Service’s financial situation, the 

Committee saw fit to implement an array of reforms, including: 

rightsizing the postal infrastructure; rate increases for subsidized 

mail; granting flexibility for the Postal Service to shift to 5-day delivery of mail; bankruptcy-like restructuring; modernization of collective bargaining; workers’ compensation reform; regulatory 

streamlining; elimination of Congressional mandates; and contracting reform. This multi-pronged approach resulted in a bill 

with five titles, which address, in sequence: infrastructure and deregulation reforms; short-term solvency and restructuring; workforce flexibility; revenue enhancement and regulatory streamlining; 

and contracting reform. 

With the wide-ranging nature of the needed reforms, the Committee drew on many sources to help craft the text of the PRA. 


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To facilitate rightsizing and to limit Congressional and stakeholder interference that has stymied past efforts, the bill creates 

the Commission on Postal Reorganization (CPR) based on the effective Base Realignment and Closure (BRAC) programs used to reduce our military footprint after the end of the Cold War. The CPR 

will be a bipartisan entity that uses a holistic approach to help 

mitigate the dangers of piecemeal closings’ impact on service quality and to ensure that all Americans continue to have proper access 

to postal services. Importantly, the bill does not pre-empt or discourage any actions taken by the Postal Service to rightsize infrastructure on its own. Savings achieved by the Postal Service 

through facility rightsizing before the CPR acts will reduce dollarfor-dollar the savings the CPR is required to achieve. Furthermore, 

in recognition of its unique knowledge of its own network, the Postal Service will develop all of the initial plans for closures and consolidations under the CPR. This gives the Postal Service the greatest control possible over rightsizing while ensuring that rightsizing 

will be implemented in a timely manner. 

Any entity that defaults on its obligations should face consequences. The Postal Service is on the verge of default. As the 

Postal Service is not subject to private sector bankruptcy rules, the 

Committee drew on the example of the highly successful D.C. Control Board. The Control Board, formally known as the District of 

Columbia Financial Responsibility and Management Assistance 

Authority, was a receiver-like entity put in place during the 1990s 

in order to restore D.C.’s solvency after a period of financial mismanagement. As amended during full committee consideration, the 

PRA provides the Postal Service with a temporary $10 billion increase in its line of credit to finance restructuring. If, after two 

years, the Postal Service fails to reduce its annual losses to less 

than $2 billion, including any defaults or missed payments, a new 

Financial Responsibility and Management Assistance Authority 

will take full control over the Postal Service. This is not a new 

management layer. The Authority would actually replace the Postal Service’s existing Board of Governors as the management unit 

of the Postal Service. The Authority is given a series of aggressive 

cost-cutting targets and provided with tools to ensure adequate restructuring and financial improvement. For example, the Authority 

will be empowered to move the Postal Service away from door delivery at an annual savings of at least $3.5 billion, and it will be 

empowered to direct the Postal Service to create its own workers’ 

compensation program for postal employees independent of the existing federal workers’ compensation program. Once the Authority 

returns the Postal Service to profitability and promised retirement 

benefits to its employees are ensured, the Authority will become 

dormant, and the previous authority of the Board of Governors will 

be restored. 

To ensure the $10 billion in temporary borrowing is repaid, the 

Postal Service is required to repay a portion of the loan each year 

through property sales until the entire loan is repaid after ten 

years. The Postal Service owns more than $50 billion in real property by most estimates. 

In addressing workforce modernization, the Committee drew on 

three primary sources: its own hearings, the 2003 President’s Commission on the United States Postal Service, and lessons from the 


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broader federal workforce. At the Committee’s April 5th hearing, 

the Postal Service’s statutorily prescribed arbitration process was 

described by Postmaster General Donahoe as a ‘‘roll of the dice.’’ 

Many describe it as biased in favor of postal unions, and a key historical factor influencing Postal Service management to enter into 

union contracts that jeopardize the institution’s financial condition 

and long-term viability. 

To modernize the collective bargaining process, which largely 

dates back to the 1970 Act, the Committee draws on the recommendations of the 2003 President’s Commission by changing the 

process to a mediation-arbitration process with a defined timeline 

and requiring the arbitrator to take into account long neglected pay 

comparability requirements. The PRA process also includes a requirement that arbitrators take into account the financial condition 

of the Postal Service in any decision. The goal of this reform is to 

ensure that the Postal Service has the necessary flexibility to remain a self-sustaining entity under a fair collective bargaining 

process that benefits both postal workers and the Postal Service in 

both the short- and long-term. 

Lessons from the non-postal federal workforce are also reflected 

in the PRA. For instance, Section 304 of the PRA includes a prohibition on any provision in a collective bargaining agreement restricting the Postal Service’s ability to use title 5 reduction-in-force 

procedures. Postal employees are virtually the only federal workers 

who enjoy such protections. This is no longer tenable, since the 

Postal Service is now in a position where it is unable to achieve 

necessary workforce reductions through attrition alone. The bill 

also specifically allows unions to negotiate alternate reduction-inforce methods that achieve needed rightsizing. In fact, the Committee believes that the ideal way to rightsize the postal workforce 

is to convert retirement-eligible employees to retirement. Since 

250,000 postal employees are eligible for full retirement by 2015, 

nearly all needed workforce reductions can be achieved via retirement. Further, the Postal Service is already authorized to re-employ annuitants on a part-time basis, meaning retirees could work 

the minimal hours necessary to keep their pre-retirement pay. 

These reemployed annuitants could also provide the Postal Service 

with a trained, flexible pool of labor at an affordable cost. 

The PRA further requires that postal employees pay at least the 

same share of health and life insurance premiums as other federal 

employees. Enjoying access to the federal health and life insurance 

programs—which are generally more generous than plans available 

in the private sector for comparable jobs—postal employees currently pay only about 21 percent of their health insurance premiums, as compared to 28 percent for other federal employees, and 

they pay nothing toward their life insurance premiums, as compared to 66 percent for other federal employees. Equalizing the premium contributions would save the Postal Service $700 million per 

year. This PRA provision only takes effect once the collective bargaining agreements currently being negotiated expire. In that way, 

it takes effect for all postal employees at about the same time, is 

implemented with sufficient lead time, and does not break any collective bargaining agreements. 

The PRA also makes an in-depth effort to unburden the Postal 

Service from unfunded mandates and over-burdensome regulations. 


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It removes restrictions on the Postal Service’s ability to manage its 

retail network, streamlines the post office closure appeal process, 

streamlines review of competitive Negotiated Service Agreements, 

and expedites PRC review of a number of Postal Service proposals. 

These specific, targeted provisions of the PRA are designed to improve utility and quality for the consumer and to help keep rates 

affordable while also giving greater flexibility to the Postal Service. 

For instance, the PRA incentivizes the shifting of brick-and-mortar post offices to more cost-effective and consumer-accessible Contract Postal Units (CPUs) by eliminating post office closure appeals 

if a CPU replaces the post office. To protect the consumer if a CPU 

that replaced a post office closes, individuals are empowered to petition for the post office’s restoration. CPU’s can have as little as 

one-tenth the overhead cost of a post office. Greater use of CPUs 

can improve customer accessibility while reducing expenses. A local 

grocery store that also serves as a CPU is likely to keep much 

longer hours than a stand-alone post office and is likely to be a frequent destination point more convenient to visit than the local post 

office. Alternative access entities such as CPUs will not work everywhere, particularly in some rural areas where there is no alternative to a post office. But there is great promise of savings and 

consumer benefit in a prudent shift toward non-traditional forms of 

access. To that end, the PRA encourages a retail modernization effort, albeit one in which proper consumer protections for postal access remain. 

The PRA also streamlines the oversight of Negotiated Service 

Agreements (NSAs) while putting in clear cost-coverage requirements. Currently, NSAs help the Postal Service compete in the 

package delivery market, but a complicated legal framework that 

involves both the Postal Service Board of Governors and the PRC 

restricts the Postal Service’s responsiveness and hurts its competitiveness. The PRA amends NSAs to allow review of substantially 

similar competitive NSAs to be considered expeditiously after the 

fact, and allows profitability to be measured across all similar 

NSAs rather than on a one-by-one basis. Additionally, the PRA 

eliminates an existing loophole that allows the Postal Service to 

enter into NSAs that can be to the net financial harm of the Postal 

Service. Together, these two NSA reforms will enable the Postal 

Service to react in a more agile fashion when competing for business while also strengthening transparency and cost coverage requirements that protect other ratepayers, competitors, and the taxpayer. 

The PRA enhances the Postal Service’s ability to generate revenue from those non-postal endeavors that are appropriately pursued by a Federal Government entity. A number of bills introduced 

this Congress give the Postal Service a more or less free hand to 

offer non-postal products; the PRA takes a noticeably more restrictive approach. It allows the Postal Service to sell state services, 

provided they do not inhibit postal business; to sell advertising on 

vehicles and property; and it grandfathers in those specific products and services approved under the 2006 reform. To manage nonpostal products, the PRA creates a new well-defined regulatory 

framework that clarifies which non-postal services are authorized 

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nizes the Postal Service’s unique status as an establishment of the 

Federal Government. As a federal agency, the Postal Service enjoys 

a number of benefits the private sector does not. These benefits include exemptions from income tax and property tax, the ability to 

exercise eminent domain, preferential borrowing access, and implicit taxpayer backing in the event of a default. Serious fair competition issues arise if the Postal Service is permitted to leverage 

its property and assets—including property received for free from 

the Federal Government when the Postal Service was created in 

1971—to compete in areas well-served by the private sector. The 

Postal Service possesses inherent unfair advantages over the private sector in many potential non-postal arenas. Moreover, the 

Postal Service has an unfortunate history of taking large losses in 

its forays into new enterprises, such as e-commerce. The PRA’s 

non-postal provisions therefore contain strict, but achievable cost 

coverage requirements: 150% cost coverage for state services and 

200% cost coverage for advertising. While non-postal services may 

never produce a tremendous amount of new revenue for the Postal 

Service, the PRA maximizes whatever potential exists while avoiding unfair competition with the private sector. 

The PRA also enables the Postal Service to increase revenue or 

avoid losses by altering the manner in which some postage rates 

are determined. This includes a requirement that all products within a class cover attributable costs—to the extent that is possible 

under the existing price caps that limit annual rate hikes to rises 

in the Consumer Price Index (CPI). This change addresses an unfair status quo in which some businesses that use mail products 

which cover costs are effectively forced to subsidize competitors 

who use products that are significantly below cost coverage. For instance, the Standard Mail Flats product covered only 82% of its attributable costs in fiscal year 2010. Another PRA reform requires 

entire mail classes that fail to cover attributable costs to eventually 

reach a minimum of ninety percent cost coverage—even if that 

means small, gradual rate increases that exceed the CPI price cap. 

As part of an effort to ensure that attributable cost measures are 

accurate, the PRA permits a two-year delay before the increases in 

excess of CPI are implemented. Ultimately, this change will ensure 

that the Periodicals class moves toward greater cost coverage in a 

fair manner. In fiscal year 2010, this class cost the Postal Service 

more than $600 million and lost money for the 14th straight year. 

A third significant pricing change in the PRA reduces the nonprofit 

advertising discount by 50 percent over a 13-year period while leaving the discount for nonprofit editorial matter in place. Specifically, 

starting three years after the PRA’s enactment, the nonprofit advertising discount will decrease by two percent per year until it is 

reduced from its current level of 40 percent to 20 percent. Over the 

long-term, this should enable the Postal Service to recoup some of 

the more than $1 billion in revenue it foregoes each year due to the 

steep discounts nonprofits receive compared to normal postage 

rates. At the same time, the provision maintains a significant 

major rate preference for nonprofits and provides a long time-line 

for adaptation to a new pricing structure. One preference that is 

terminated immediately, however, is one allowing state and national political committees to use the nonprofit discount. Finally, 

the PRA will require the State of Alaska to reimburse the Postal 


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Service for the additional costs it incurs to provide for bypass 

mail—a provision that is phased in over a 5-year period. Bypass 

mail is a unique system in the State of Alaska that heavily subsidizes the shipment of large and commercial items to the rural 

areas of the state, including groceries and construction supplies. 

According to PRC data, the program costs the Postal Service more 

than $100 million per year. The Committee views this unfunded 

mandate on the Postal Service as unfair. By asking the State itself 

to sponsor the program, the PRA protects delivery at no cost to the 

Postal Service and rural Alaskans. Altogether, the Committee estimates the changes made to the rate structures will improve the fiscal standing of the Postal Service by a minimum of $1 billion annually, once all provisions are fully phased in. 

Postal reform should increase the Postal Service’s flexibility to 

operate in a more efficient, businesslike manner while providing 

appropriate accountability and oversight to ensure fair and transparent operations. When the Postal Service was created as an independent establishment of the Federal Government, it was authorized to operate more like a business and exempted from most federal laws and regulations applicable to purchasing. Notably, the 

Postal Service is exempt from the Federal Acquisition Regulation 

(FAR) that establishes acquisition policies and procedures for all 

executive branch agencies, including the requirement that each 

agency maintain a competition advocate responsible for promoting 

full and open competition, transparency in the public reporting of 

noncompetitive contract awards and their justifications, and limitations on delegations of contracting authority. The Postal Service is 

also exempt from the Competition in Contracting Act that establishes the federal policy of ‘‘full and open competition’’ for most federal contracts. 

The Postal Service has, however, repeatedly abused its contracting flexibility in recent years, with numerous postal officials 

implicated in conflicts of interest involving noncompetitive contract 

awards to their friends and former associates. Other contracting 

problems include poor business practices, inadequate transparency, 

lax internal oversight, lack of accountability, and misuse of delegations of contracting authority. 

Considering this history, the statutory reforms in this bill are 

necessary to improve Postal Service contracting practices, to reduce 

costs through contracting out and competition, and to prevent the 

recurrence of poor contracting practices, lax oversight, and improper ethical behavior. The PRA requires the Postal Service and 

Postal Regulatory Commission to establish competition advocates 

to promote contracting out of functions that the private sector can 

perform equally well or better and at lower cost, to obtain best 

value, and to review procurement activities. Other reforms require 

high ethical standards, transparency for noncompetitive contracts, 

policies for delegations of contracting authority, and accountability. 

A few unfinished provisions were not included in the text of the 

PRA as introduced. This includes a planned reform to the workers’ 

compensation program for postal employees, which was only included in the original text as a sense of Congress provision. Other 

provisions that were added after introduction are delivery point 

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gaining postal employees. These provisions were included in the 

amendment in the nature of a substitute offered by Federal Workforce Subcommittee Chairman Dennis Ross during Subcommittee 

consideration of the PRA. 

As reported from committee, the PRA would stem the growing 

tide of red ink at the Postal Service, and restores its solvency. In 

fiscal year 2011, the Postal Service estimated its loss to be approximately $10 billion, including the statutorily required retiree health 

care prefunding payment. Once fully implemented, the PRA contains $10.7 billion in annual cost reductions and revenue increases 

and billions more in other reforms which cannot be readily quantified. Quantifiable savings include a minimum annual savings of 

$3.5 billion from delivery point modernization, $2.5 billion from allowing the Postal Service to shift to 5-day delivery of mail, $2 billion from the mail processing CPR report, $1 billion from the postal 

retail CPR report, $1 billion from changes in the rate structure, 

and $700 million from the change in the premium share for health 

and life insurance for postal employees. Other provisions with considerable long-term savings potential include the enhanced control 

the Postal Service is granted over its retail network, the modernization of the collective bargaining process, and the streamlining of PRC regulatory oversight. Taken together, the various 

savings measures in the PRA are designed to be more than enough 

to restore the Postal Service’s financial viability. 

The Postal Reform Act will fundamentally reshape the Postal 

Service to meet the challenges of the digital age. Americans are increasingly less reliant on the mail. The Postal Service, however, remains an indelible American institution, and its continued financial viability is essential to the health of our economy. On its current financial trajectory, the Postal Service will be unable to make 

payroll in a matter of months. If nothing is done, either mail delivery will come to a stop, or Congress will be forced to reinstate a 

direct taxpayer subsidy to the Postal Service. The American people 

will not support either of these options. Thus, inaction is not acceptable. The Committee crafted the Postal Reform Act to make the 

hard decisions necessary to bring the Postal Service back from the 

brink of fiscal ruin. By refusing to kick the can down the road, the 

PRA gives the Postal Service the tools it needs to rightsize its 

workforce and infrastructure and develop a business model that 

will return the institution to profitability, primarily by loosening 

Congressional control and enabling the Postal Service to act more 

like a business. For the Postal Service to endure as it has for the 

last two hundred years, it must make major adaptations. But its 

fundamental mission need not be sacrificed. Proper Congressional 

action now will enable the Postal Service to continue to provide 

necessary and important services to those who depend on the mail. 

Legislative history 

H.R. 2309, the Postal Reform Act of 2011, was introduced on 

June 23, 2011 by Representative Darrell E. Issa and was referred 

to the House Committee on Oversight and Government Reform and 

the House Committee on Rules. On June 30, 2011, the bill was referred to Oversight and Government Reform’s Subcommittee on 

Federal Workforce, U.S. Postal Service, and Labor Policy. 


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On September 21, 2011, the Subcommittee on Federal Workforce, 

U.S. Postal Service, and Labor Policy considered H.R. 2309. At the 

business meeting, Subcommittee Chairman Dennis Ross offered an 

amendment in the nature of a substitute (ANS) to be considered in 

place of H.R. 2309. The ANS added provisions to the bill, including: 

delivery point modernization and the phase-out of door delivery of 

mail; modified reduction-in-force powers for the Authority enabling 

it to convert retirement-eligible employees to retirement; a requirement that the State of Alaska reimburse the Postal Service for the 

unfunded mandate imposed upon it by the Alaska Bypass mail program; and modernization of the federal workers’ compensation program as it applies to postal employees. The Subcommittee accepted 

the ANS and rejected a number of amendments that would have 

removed all infrastructure and workforce-related reforms from the 

bill. On a roll call vote of 8–5, the Subcommittee favorably reported 

H.R. 2309, as amended, to the full committee for consideration. 

On October 13, 2011, the Oversight and Government Reform 

Committee held a business meeting to consider H.R. 2309, as reported by the Subcommittee. During consideration of the bill, Subcommittee Chairman Ross offered an ANS to the reported text. The 

ANS made a few substantial changes, the most significant being 

the addition of a section prospectively prohibiting any restrictions 

on the Postal Service’s use of title 5 U.S.C. reduction-in-force procedures in any future postal collective bargaining agreements. The 

ANS also replaced the workers’ compensation reform included at 

Subcommittee with a new provision giving the Authority the discretion to remove postal employees from the existing federal workers’ compensation program and placing them in a new program developed by the Postal Service. Finally, the ANS also postponed the 

phase-out of most door delivery until two years after the initiation 

of a Control Period. A total of 13 amendments to the ANS were accepted—12 by voice vote—during the Business Meeting. A total of 

eight amendments were defeated and two others were withdrawn. 

As in Subcommittee, most of the defeated amendments would have 

struck large portions of the bill text. This included two amendments to strike the entire text of the bill; one would have inserted 

in its place the text of H.R. 1351, the other the text of H.R. 2967. 

At the conclusion of debate on amendments, the Committee, by a 

22–18 vote, ordered H.R. 2309, as amended, favorably reported to 

the full House for consideration. 

SECTION-BY-SECTION

TITLE I—POSTAL SERVICE MODERNIZATION 

Subtitle A—Commission on Postal Reorganization 

Sec. 1. Short title; table of contents; references 

Identifies that the bill may be referred to as the Postal Reform 

Act of 2011, lists the table of contents, and provides that any references not expressly provided refer to title 39, United States Code. 

Sec. 101. Short title 

Identifies that the subtitle may be referred to as the ‘‘Commission on Postal Reorganization Act,’’ or the ‘‘CPR Act.’’ 


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Sec. 102. Definitions 

Defines a number of terms used in the title. This includes the 

terms ‘‘postal retail facility,’’ ‘‘mail processing facility,’’ ‘‘district office,’’ ‘‘area office,’’ ‘‘baseline year,’’ and ‘‘Member of Congress.’’ 

Sec. 103. Commission on Postal Reorganization 

Establishes the Commission on Postal Reorganization (CPR) not 

later than 90 days after enactment. The CPR will be composed of 

five members appointed by the President. One member shall be selected by each of the following: the Speaker of the House, the Majority Leader of the Senate, the Minority Leader of the House, the 

Minority Leader of the Senate, and the Comptroller General of the 

United States. The Chairman of the CPR shall be selected by the 

President during the selection of CPR members. 

No member of the CPR may be representative of specific interests using the Postal Service and no member may serve if they are 

a Member of Congress or have worked for the United States Postal 

Service (USPS), the Postal Regulatory Commission (PRC), or any 

USPS-related labor organization in the previous three years. Additionally, no more than three commissioners may be of the same political party. The Commissioners are appointed for the life of the 

CPR and are paid at a per diem rate of $40,000 per year. 

Provides for CPR staff and CPR procedures. Includes the authorization for a Director and other employees as the Director finds appropriate. Additionally authorizes federal employees to be detailed 

to the CPR for more than one year, at the request of the Director, 

and limits the number of individuals detailed from USPS or the 

PRC to a combined number of no more than one-third of the total 

staff. 

Allows the CPR to hire consultants and lease space and acquire 

property to the extent funds are available. Requires the CPR to 

issue annual financial statements and establish proper controls 

over its financial reporting, including internal audits and annual 

certification from an independent certified public accounting firm. 

The Comptroller General is also authorized to audit the CPR at 

such times as the Comptroller General deems necessary. Provides a one-time appropriation of $20,000,000 from the Postal 

Service Fund to pay for all expenses of the CPR during its existence. Terminates the CPR sixty days after the submission of its 

final reports. 

Sec. 104. Recommendations for closures and consolidations 

Requires the Postal Service to prepare a plan, in consultation 

with the PRC, to close or consolidate Postal Service retail facilities 

in order to achieve a minimum $1 billion reduction in retail expenditures relative to the last full fiscal year prior to enactment. 

The plan is due not later than 120 days after enactment. 

Requires the Postal Service to prepare a plan, in consultation 

with the USPS Inspector General (IG), to close or consolidate Postal Service processing facilities in order to achieve a minimum annual reduction of $2 billion in mail processing expenditures relative 

to the last full fiscal year prior to enactment. The plan must include sufficient closures and consolidations to limit Postal Service 

excess mail processing capacity to no more than ten percent of total 

mail processing capacity. Subsection (b)(4) requires the CPR to noVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00059 Fmt 6659 Sfmt 6602 E:\HR\OC\HR363P1.XXX HR363P1

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tice a proposed definition of ‘‘excess mail processing capacity’’ in 

the Federal Register within 120 days of enactment and to allow for 

a thirty day notice and comment period, with a final definition noticed within 180 days of enactment. The plan is due 300 days after 

enactment. 

Requires the Postal Service to prepare a plan, in consultation 

with the USPS IG, to reduce the number of Postal Service Area 

and District Offices by at least thirty percent relative to the last 

full fiscal year before enactment. The plan is due 300 days after enactment. 

Each completed plan is submitted to the CPR, which has the opportunity to review and amend the plans. After the submission of 

a plan to the CPR, the CPR issues an Initial Report to Congress 

on its findings. The CPR has sixty days to issue its report for the 

retail plan and ninety days to do so for both the mail processing 

plan and the Area and District office plan. In the initial reports, 

the CPR is required to explain and justify any changes it makes 

to the plans proposed by the Postal Service. The CPR must hold 

at least five public hearings on each Initial Report within sixty 

days of its filing, with the hearings to be held in geographically distinct locations. Hearing testimony must be taken under oath. 

Once the final public hearing is held on a plan, the CPR must 

issue a Final Report on that plan within sixty days. The Final Report must contain a summary of the results of the hearings and the 

final closure and consolidation recommendations for Congress. Recommendations of each Final Report, including any CPR modifications to the Postal Service’s plan, must be approved by a minimum 

of four members of the Commission. If the $2 billion mail processing savings goal or the 30 percent Area and District office closure goal are not met, however, the CPR may, by a unanimous 

vote, lower the requirements by not more than 25 percent. Upon 

approval, plans are submitted to Congress. 

Under the Postal Service plan and the CPR reports on postal retail closure and consolidation, no more than ten percent of the facilities recommended for closure or consolidation may be post offices determined to be within K or L cost ascertainment groupings 

combined. Such post offices have the least revenues and generally 

are small post offices located in rural areas. 

Requires the Postal Service to report on the impacts of Postal 

Service closures and consolidations on the employment of preference-eligible veterans within the Postal Service. Reports must be 

issued annually for five years. 

Sec. 105. Implementation of closures and consolidations 

Closures and consolidations recommended by the CPR must be 

completed within two years of the submission of the relevant plan 

to Congress. Congress may prevent the implementation of all recommendations in a CPR Final Report if a Joint Resolution of disapproval is enacted within thirty days of the submission of a plan 

to Congress. 

Sec. 106. Congressional consideration of final CPR Reports 

Provides for the construction of a Joint Resolution of disapproval 

and sets the terms for the debate and consideration of such a resolution. 


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Sec. 107. Nonappealability of decisions 

Provides that the closure or consolidation of a facility carried out 

as a result of this Act shall not be subject to appeal to the PRC 

or the subject of an advisory opinion issued by the PRC. Exempts 

all processes, reports, recommendations, and other actions by the 

CPR from judicial review. 

Sec. 108. Rules of construction 

Expressly allows the Postal Service to continue the closing or 

consolidation of any existing postal facilities in accordance with 

non-CPR authority before, during, and after CPR activity. 

Sec. 109. GAO study and report 

Requires the Comptroller General to conduct a study of the effect 

on the unemployment rate of minority communities of the proposed 

closures and consolidations of postal facilities under this subtitle. 

Requires the Comptroller General to submit a report on the findings of the study within one year of enactment. 

Subtitle B—Other Provisions 

Sec. 111. Implementation of discretionary non-mail delivery days 

Amends section 404 of title 39 to allow the Postal Service to select up to twelve non-mail holidays per year in any year for which 

six-day delivery is otherwise required. The Postal Service must 

submit the requested days to the Postal Service Board of Governors. The days may not be: Sundays, legal public holidays, or 

within the thirty-day period prior to a general election for Federal 

office. 

Allows the Postal Service to submit a proposal under section 

3661 of title 39 for a nationwide change in service to reduce mail 

delivery from six to five days per week not less than six months 

after enactment. The Postal Service is required to maintain six-day 

delivery service until ninety days after the rendering of an advisory 

opinion on five-day delivery by the Postal Regulatory Commission. 

After such period, the Postal Service may adopt five-day delivery 

as the standard mail delivery schedule. 

Sec. 112. Efficient and flexible universal postal service 

Removes a Postal Service prohibition on closing a post office solely for operating at a deficit. 

Requires the Postal Service to provide effective and regular postal services to rural areas, communities, and small towns where 

post offices are not self-sustaining. 

Reduces the deadline for PRC review of post office closures from 

120 days to sixty days. 

Excludes any post office from the PRC appeals process if a contract postal unit (CPU) is opened within two miles of the applicable 

post office. Any exclusion must take place on a one-for-one basis. 

The CPU must be opened within fifteen days of the post office’s closure and must stay open for a minimum of two years. If the CPU 

is closed before the end of a two-year period, an appeal may be 

made to the PRC for the reopening of the post office. 

Expedites PRC advisory opinions concerning Postal Service plans 

to close or consolidate post offices on a level affecting service on a 


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nationwide basis and on matters that are substantially identical to 

matters on which the PRC has issued an opinion within the preceding five years. 

Sec. 113. Enhanced reporting on Postal Service efficiency 

Requires the Postal Service to use a PRC-recommended formula 

to determine changes in Postal Service productivity and the resulting effect on overall costs. 

Sec. 114. Applicability of procedures relating to closures and consolidations 

Defines ‘‘post office’’ in subsection 404(d) of title 39 as any Postal 

Service operated retail facility as described by section 102(2) of this 

bill, which includes post offices, branches, and stations. This 

change is effective sixty days after enactment. 

TITLE II—POSTAL SERVICE FINANCIAL RESPONSIBILITY 

AND MANAGEMENT ASSISTANCE AUTHORITY 

Subtitle A—Establishment and Organization 

Sec. 201. Purposes 

States the purposes of the title. The purposes include eliminating 

Postal Service budget deficits, protecting the universal service 

mandate during a period of fiscal emergency, determining the fiscal 

status and operational efficiency of the Postal Service, helping the 

Postal Service to implement necessary rightsizing and to meet all 

fiscal obligations, providing a temporary increase in borrowing authority to fund restructuring, and ensuring the long-term vitality 

of the Postal Service. 

Clarifies that nothing in this title may be construed as relieving 

any existing obligations of the Postal Service or limiting the authority of Congress to exercise ultimate legislative authority over 

the Postal Service. 

Sec. 202. Establishment of the Authority 

Creates the ‘‘Postal Service Financial Responsibility and Management Assistance Authority,’’ an entity referred to in the bill as the 

‘‘Authority.’’ 

Defines a Control Period as any period where the Postal Service 

is in default to the Federal Government for more than thirty days. 

Upon the commencement of a Control Period, the Authority is established. The Authority immediately takes over all roles and responsibilities of the Postal Service Board of Governors and becomes 

the top management agent of the Postal Service. For the remainder 

of a Control Period, the Board of Governors may act only in an advisory capacity. 

For the purposes of the first Control Period, an advisory period 

is put into effect upon triggering of the Control Period. During the 

advisory period the Authority is constituted, but operates exclusively in an advisory capacity for two full fiscal years. At the completion of the second full fiscal year, or any year thereafter during 

the first Control Period, if the Postal Service annual deficit is 

greater than $2,000,000,000, the Authority shall be given full control over the Postal Service. During an advisory period, the AuthorVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00062 Fmt 6659 Sfmt 6602 E:\HR\OC\HR363P1.XXX HR363P1

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ity may not employ staff and the Postal Service is ordered to designate a Level-Two Postal Service Executive as a liaison with the 

members of the Authority. 

During an advisory period, any provision of this title requiring 

action on the part of the Postal Service or the Authority shall be 

delayed. Should the Authority be given full control due to the Postal Service’s failure to make sufficient budgetary progress, the Control Period (excluding limitations specific to the advisory period) 

shall be deemed to have started on the date of the Authority’s assumption of power. Also, during an advisory period, the Postal 

Service is authorized to access funds made available under section 

222 without the approval of the Authority. Whether or not the Authority takes full effect, the process for ending a Control Period 

must be completed. 

Provides that during the length of a Control Period, Postal Service senior executives are ineligible for any deferred compensation 

or bonus and that, notwithstanding any employment contracts, 

they serve at the pleasure of the Authority. 

Provides for the termination of a Control Period once the following requirements are satisfied: (1) two consecutive years of profit; (2) an Authority-approved budget forecast showing profits for 

the next three fiscal years; and (3) a financial plan that repays any 

supplemental debt acquired via section 222 of this title and properly funds employee pensions and retiree health benefits. The Authority must certify that these requirements are satisfied with the 

concurrence of the Secretary of the Treasury and the Director of 

the Office of Personnel Management. 

Sec. 203. Membership and qualification requirements 

Sets up the Authority as a five-member panel appointed by the 

President. One member each shall be recommended by the following: the Speaker of the House, the Majority Leader in the Senate, the Minority Leader in the House, the Minority Leader in the 

Senate, and the Comptroller General of the United States. Authorizes the President to designate one member as Chair. No more 

than three members may be of the same political party and it is 

the sense of Congress that the President shall appoint all members 

within thirty days of the commencement of a Control Period. 

Provides for an initial appointment for members of three years. 

The subsequent terms are staggered before returning to three-year 

terms for all future appointments to ensure that no more than two 

members are appointed in any one year. Members are to serve 

without pay, but are eligible for reimbursement of reasonable and 

necessary expenses incurred due to service with the Authority. No 

member may be representative of specific interests using the Postal 

Service. Any individual who has worked for the Postal Service or 

the PRC in the five years preceding any potential appointment to 

the Authority is disqualified from being a member. 

Sec. 204. Organization 

Provides for the adoption of by-laws for Authority business. 

Identifies actions that require a majority vote of the members of 

the Authority: (1) approval or disapproval a Postal Service financial 

plan; (2) implementation of recommendations authorized by section 

226; (3) removal of a senior Postal Service executive; and (4) initiVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00063 Fmt 6659 Sfmt 6602 E:\HR\OC\HR363P1.XXX HR363P1

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ation of the establishment of a new workers’ compensation program. 

Sec. 205. Executive director and staff 

Allows for the appointment of an Executive Director and staff of 

the Authority. Allows the Authority to appoint the Executive Director and staff of the Authority without regard to title 5 competitive 

service requirements and compensate such individuals without regard to General Schedule pay rates. Allows staff from other federal 

agencies to be detailed to the Authority on a reimbursable or nonreimbursable basis. 

Sec. 206. Funding 

Sets the maximum funding level for the Authority at $10 million 

per year, to be appropriated from the Postal Service Fund. Requires the Authority to include a budget of its expenses within the 

Postal Service’s annual budgetary submission to Congress. 

Subtitle B—Powers of the Authority 

Sec. 211. Powers 

Authorizes an agent or member of the Authority to take an action which the Authority is authorized to take, upon the approval 

of the Authority. 

Requires the Postal Service to grant the Authority access to any 

records, documents, or data the Authority believes it needs to carry 

out its duties. 

Allows the Authority to accept, use, and dispose of gifts for the 

purpose of aiding or facilitating the work for the Authority. 

Allows the Administrator of General Services to provide support 

services to the Authority on a reimbursable basis, upon the request 

of the Authority. 

Authorizes the Executive Director (subject to the approval of the 

Chair of the Authority) to enter into such contracts as necessary 

to carry out the duties of the Authority. 

Authorizes the Authority to seek judicial enforcement of its authority to carry out its duties under this title. 

Subjects to administrative discipline those Postal Service employees who by action or inaction fail to comply with an order of the 

Authority. 

Expresses the sense of Congress that in making determinations 

that affect prior collective bargaining agreements, or any form of 

restructuring that reduces the workforce, the Postal Service shall 

ensure that employees receive the full benefits to which they are 

entitled. 

Sec. 212. Exemption from liability for claims 

Exempts the Authority and its members from any liability for 

any obligation of, or claim against, the Postal Service resulting 

from actions taken as a result of this title. 

Sec. 213. Treatment of actions arising under this title 

Establishes jurisdiction for petitions against actions of the Authority in the Court of Appeals for the District of Columbia Circuit. 

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cable order or decision. Limits judicial review to whether the Authority acted in excess of its statutory authority. 

Allows an appeal to the Supreme Court of a decision of the Court 

of Appeals if the appeal is filed within ten days of the decision. 

Prohibits declaratory or injunctive relief against the Authority 

during the pendency of the action before a court. 

Indicates that it shall be the duty of the Court of Appeals for the 

District of Columbia and the Supreme Court of the United States 

to advance and expedite to the greatest possible extent any matter 

brought under this section. 

Sec. 214. Delivery point modernization 

Requires the Postal Service to convert 75 percent of addresses 

currently receiving door delivery of mail to curbside delivery or 

clusterbox delivery within two years of the initiation of a Control 

Period fully in effect without the limitations of the advisory period 

specified in section 202. Requires a minimum savings of $3.5 billion 

annually from such transition. Requires 90 percent of door delivery 

points be converted to curb or clusterbox delivery within four years 

of the initiation of a Control Period that is fully in effect. 

In determining which areas shall continue to receive door delivery, the Postal Service shall consider poverty rates, population density, and whether a locality is in a registered historic district or on 

the National Register of Historic Places. 

Establishes clusterbox delivery as the default delivery form for 

new addresses, with curbside to be used where clusterbox delivery 

is impractical. 

Provides for a hardship waiver for individuals with physical 

hardships. Also authorizes the Postal Service to create a voucher 

program to defray conversion costs incurred by postal customers. 

Eligibility is to be based on criteria determined by the Postal Service. Funding for the program may be provided by the Postal Service 

Competitive Products Fund. 

Subtitle C—Establishment and Enforcement of Financial Plan and 

Budget for the Postal Service 

Sec. 221. Development of financial plan and budget for the postal 

service 

Requires the Postmaster General to submit a financial plan to 

the Authority for each fiscal year during a Control Period. The financial plan must include the Congressional budget submission, 

cash flow forecasts, a breakdown of estimations and significant assumptions, and any other criteria the Authority requires. 

Requires that in the second full fiscal year and each subsequent 

fiscal year of a Control Period, budgeted revenues shall exceed 

budgeted expenses. Also requires that the Postal Service make significant progress toward long-term fiscal solvency in each period 

and include a plan for paying off any supplemental debt accrued 

under section 222. 

Sec. 222. Supplementary borrowing authority during a control period 

Authorizes supplemental borrowing authority of the Postal Service in the amount of $10 billion during a Control Period. This auVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00065 Fmt 6659 Sfmt 6602 E:\HR\OC\HR363P1.XXX HR363P1

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thorization expires after ten years, at which time the Postal Service 

is required to dispose of sufficient real property assets to repay any 

obligation still outstanding from this borrowing authority. Any 

amounts received by the Postal Service under this section shall be 

deposited in the Postal Service Fund. 

All borrowing that takes place as a result of this section must be 

approved by the Authority, except as provided under section 202, 

and the Postal Service must provide an appropriate level of Postal 

Service property assets as collateral for any funds received under 

this section. 

Requires that for each fiscal year in which any supplemental 

funds are outstanding, the Postal Service dispose of real property 

of sufficient value to repay at least ten percent of the total outstanding balance. 

Sec. 223. Process of submission and approval of financial plan and 

budget 

Describes the process for the approval of the financial plan and 

budget required by section 221. 

Requires the Postmaster General to develop a preliminary financial plan and budget by February 1 and a final budget by August 

1 of each year. The Authority may approve or disapprove of the 

budget based on whether it satisfies the requirements of section 

221. If it disapproves the budget, the Postmaster General shall 

submit a revised plan. If the revision is also disapproved, the Authority is required to amend the plan so as to satisfy section 221. 

Requires the Authority to submit an approved financial plan and 

budget by September 30 of each year. 

Provides for a process for the Postmaster General to submit revisions to the financial plan throughout the year. 

Sec. 224. Responsibilities of the authority 

Requires the Authority to use its powers to determine overall 

strategies, organizational structure, senior management staffing, 

major policies, budgets, capital projects, rate changes, and new 

products for the Postal Service. It is also responsible for approving 

annual Postal Service reports; formulating positions on postal public policy matters before Congress; ensuring overall responsiveness 

to Congress, the PRC and the rest of the Federal Government; and 

carrying out all responsibilities of the Board of Governors. 

Requires the Postmaster General to submit to the Authority all 

proposals that substantially impact the aforementioned responsibilities. Allows the Authority to approve, deem approved, deny, or 

deny and recommend changes to any proposal. 

Requires the Authority to examine all senior Postal Service management contracts and collective bargaining agreements in effect at 

the commencement of a Control Period. If any senior management 

contract is not in accordance with the fiscal plan of the Postal Service, the Authority is directed to take actions within its powers to 

revise the contract. 

Sec. 225. Effect of finding noncompliance with financial plan and 

budget 

Requires the Postmaster General to file quarterly revenue and 

expense reports with the Authority. If the quarterly results vary 


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from the financial plan, a revision to the plan or remedial action 

to correct the variance is required. 

Sec. 226. Recommendations regarding financial stability, etc. 

Authorizes the Authority to make recommendations to the Postmaster General and Congress concerning actions that could be 

taken to ensure compliance by the Postal Service with its financial 

plan. Includes a list of areas of potential recommendations. 

For Authority recommendations the Postal Service may adopt on 

its own, requires the Postmaster General to indicate within ninety 

days of receipt of the recommendations whether the recommendations will be adopted. If the Postmaster General declines to implement the recommendations, the Authority may, by a majority vote, 

implement the recommendations. 

Sec. 227. Special rules for fiscal year in which control period commences 

Provides for an abbreviated process to adopt a transition budget 

to act as a financial plan until one is approved under the process 

described in section 223. 

Sec. 228. Assistance in achieving financial stability, etc. 

Authorizes the Authority to undertake cooperative efforts to assist the Postal Service in addition to the actions identified elsewhere, including making recommendations to change federal law in 

a manner that would assist the Postal Service in achieving financial sustainability. 

Sec. 229. Obtaining reports 

Authorizes the Authority to require the Postal Service or the 

USPS IG to prepare any reports the Authority considers appropriate to carry out its duties. 

Sec. 230. Reports and comments 

Requires the Authority to submit to Congress annual reports on 

its actions, and on the progress of the Postal Service in returning 

to solvency. 

Requires the Authority to review all annual reports the Postmaster General files with Congress and the PRC, and to submit a 

report to Congress analyzing each report’s accuracy and completeness. 

Authorizes the Authority to report to Congress on any action 

taken by the Postal Service contrary to recommendations of the Authority that are likely to have a significant adverse impact on the 

finances of the Postal Service. 

Authorizes the Authority to report to Congress and the President 

on the impact of newly enacted statutes on the financial plan of the 

Postal Service. 

Requires any report submitted under this section to be made 

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Subtitle D—Termination of a Control Period 

Sec. 231. Termination of a control period, etc. 

Upon the completion of the requirements to end a Control Period 

described in section 202, the Authority is required to submit a recommendation to Congress to terminate the Control Period, disband 

the Authority, and return control of the Postal Service to the Board 

of Governors. A Joint Resolution must be approved by Congress 

within thirty days of the Authority’s recommendation in order that 

the Control Period be terminated. 

Sec. 232. Congressional consideration of recommendation 

Provides for the terms of a Joint Resolution to end a Control Period and establishes rules of consideration of the resolution in each 

chamber. 

TITLE III—POSTAL SERVICE WORKFORCE 

Subtitle A—General Provisions 

Sec. 301. Modifications relating to determination of pay comparability 

Clarifies existing postal pay comparability standards to refer to 

total compensation and the entire private sector. 

Sec. 302. Limitation on postal contributions under FEGLI and 

FEHBP 

Places a cap on the portion of employees’ health and life insurance premiums that the Postal Service can pay. The cap is the 

level that the Federal Government pays on behalf of the broader 

federal workforce, as defined in title 5. The requirement is phased 

in so that it applies to non-bargaining postal employees in 2013 

and for bargaining employees at the beginning of the first fiscal 

year after which applicable contracts in effect in 2013 expire. 

Sec. 303. Repeal of provision relating to overall value of fringe benefits 

Repeals a provision requiring the overall value of fringe benefits 

to be equal to that of fringe benefits available in 1971. 

Sec. 304. Applicability of reduction-in-force procedures 

Prospectively prohibits Postal Service collective bargaining agreements from containing provisions that restrict the use of title 5 reduction-in-force procedures. 

Requires any collective bargaining agreement ratified prior to 

date of enactment to be renegotiated within 9 months of the date 

of enactment if the agreement includes any restrictions on the 

Postal Service’s ability to use title 5 reduction-in-force procedures. 

Authorizes the Postal Service and a union to agree to additional 

forms of reduction-in-force procedures other than those specified in 

title 5. Such non-title 5 procedures are explicitly banned from inclusion in any collective bargaining agreement without the consent 

of the applicable union. 


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Sec. 305. Modifications relating to collective bargaining 

Reforms the collective bargaining process to contain a mediationarbitration process with a defined timeline modeled after recommendations of the 2003 President’s Commission on the Postal 

Service. Creates an arbitration board of three neutral individuals. 

Any arbitration award is required to take into account both pay 

comparability with the private sector and the financial condition of 

the Postal Service. Further, once the arbitration stage has been 

reached, any agreement reached by the Postal Service and a union 

independent of the arbitration panel must also satisfy these same 

requirements. If such an agreement fails to do so, the arbitration 

panel is required to amend the agreement in a manner that does 

satisfy the requirements. 

Sec. 306. One-time transfer of net surplus postal retirement contributions 

Calculates a combined Postal Service pension surplus by subtracting from any projected FERS surplus any projected CSRS deficit and further subtracting the value of any FERS payments the 

Postal Service has failed to make. Any resulting surplus is immediately transferred to the Postal Service. 

The transferred funds are made available for such purposes as 

the Postal Service considers appropriate. If transferred funds remain by 2015, however, the Postal Service must use the funds to 

pay off any extant Postal Service FERS or CSRS pension liability, 

or to pay down Postal Service debt. Expresses the sense of Congress that the Postal Service should use any funds made available 

under this section for separation incentives for postal employees. 

Subtitle B—Postal Service Workers’ Compensation Reform 

Sec. 311. Postal Service workers’ compensation reform 

Following written notification by the Authority established under 

section 202, the Postmaster General is to establish a workers’ compensation program for Postal Service employees. The program, developed in consultation with employee representatives, must transition postal employees receiving workers’ compensation to retirement benefits when the employees reach retirement age, and may 

not provide augmented compensation for dependents. The Postal 

Service must provide the Congressional committees of jurisdiction 

with a detailed description of the program, and publish such information in the Federal Register no later than nine months following 

the Authority’s aforementioned written notification. 

TITLE IV—POSTAL SERVICE REVENUE 

Sec. 401. Adequacy, efficiency, and fairness of postal rates 

Each market-dominant product must cover its costs, while maintaining the statutory price cap based on the Consumer Price Index. 

Rates for any market-dominant class of mail covering less than 

ninety percent of costs must, after a two-year delay, increase annually at a rate of two percent above the rate of inflation. 

Requires the PRC to conduct a study during the two-year delay 

period to determine the impact of Postal Service excess capacity on 

attributable costs of loss-making classes of mail, and to factor this 


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impact into their costs for the purposes of the rate adjustments required by this section. Market-dominant classes include First-Class 

Mail, Standard Mail (mainly advertising), Periodicals (mainly magazines and newspapers), and Package Services (mainly single-piece 

Parcel Post, Media Mail, library mail, and bound printed matter). 

Rates for any market-dominant class that does not cover 100 percent of its costs must be established so as to maximize incentives 

to reduce costs and increase efficiency. 

Sec. 402. Repeal of rate preferences for qualified political committees 

National and state political committees are made ineligible for 

rate preferences that are received by nonprofit organizations. 

Sec. 403. Rate preferences for nonprofit advertising 

Effective the first day of the first calendar year beginning three 

years after enactment, the discount for nonprofit advertising is reduced by two-percent annually, until the current forty percent discount off the most closely corresponding commercial rate is reduced 

to twenty percent. 

Sec. 404. Streamlined review of qualifying service agreements for 

competitive products 

The Postal Regulatory Commission (PRC) is required to conduct 

streamlined after-the-fact review of new negotiated service agreements for competitive products if they are functionally equivalent 

to existing agreements that have collectively covered costs and improved the Postal Service’s net financial position. 

Sec 405. Submission of service agreements for streamlined review 

The Postal Service Board of Governors is given the flexibility to 

delegate to the Postmaster General the submission to the PRC of 

qualifying negotiated service agreements in section 404. 

Sec. 406. Transparency and accountability for service agreements 

Each group of functionally equivalent negotiated service agreements, including those covering market-dominant and competitive 

products, is required to cover its costs and improve the Postal Service’s net financial position. This section is intended to ensure that 

these agreements will cover costs and improve the Postal Service’s 

net financial position. 

Sec. 407. Nonpostal services 

Creates a new Chapter, 37—Nonpostal Services, in title 39: 

§ 3701. Purpose—The purpose of this section is to enable the 

Postal Service to increase its net revenues through specific nonpostal products and services expressly authorized by law. Postal 

Service revenues and expenses for these specific nonpostal products 

and services are required to be funded through the Postal Service 

Fund. 

§ 3702. Definitions—This section defines key terms. One key 

term, ‘‘nonpostal services,’’ is defined as specific nonpostal services 

that are expressly authorized by this legislation and that are not 

postal products or services. 


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§ 3703. Postal Service Advertising Program—The Postal Service 

is authorized under this section to establish and manage a program 

that allows entities to advertise at its facilities and on its vehicles, 

provided that the advertising is consistent with the integrity of the 

Postal Service, covers at least 200 percent of its costs, and is subject to the PRC’s annual compliance review. The Postal Service 

must publicly disclose expenditures and revenues for this program 

in its Annual Reports. 

§ 3704. Postal Service Program for State Governments—This section authorizes the Postal Service to establish a program to provide 

services for State agencies, subject to safeguards to ensure that 

these services provide enhanced value to the public, do not interfere with or detract from the value of postal services, and provide 

a reasonable contribution to Postal Service overhead costs by covering at least 150 percent of costs. To provide transparency and an 

opportunity for stakeholder input, the Postal Service is required to 

publish its business plan for State services it plans to offer, followed by a public comment period and a published Postal Service 

response. At least two-thirds of the presidentially-appointed Postal 

Service Governors must approve of USPS providing specific State 

services by a publicly recorded vote. 

§ 3705. Postal Service Program for Other Government Agencies— 

The Postal Service is authorized to continue providing property and 

services for other federal agencies and the Government Printing 

Office, provided it receives reimbursement covering 100 percent of 

its costs. This cost-coverage requirement is intended to ensure that 

ratepayers do not subsidize services provided for other federal 

agencies. 

§ 3706. Transparency and Accountability for Nonpostal Services—The Postal Service must annually report financial results, 

rates, and the quality of its nonpostal services within ninety days 

after the end of each fiscal year, with proprietary data protected 

from disclosure. The PRC must annually review compliance that 

nonpostal services meet cost-coverage and other requirements; 

order remedial action to remedy any noncompliance; and can initiate proceedings to improve data quality and completeness. The 

Postal Service IG must regularly audit applicable data collection 

systems and procedures. These provisions are modeled after existing provisions for market-dominant products. 

Clarifies that all nonpostal services continued pursuant to 404(e) 

of title 39 are considered expressly authorized by chapter 37 of title 

39 and are subject to the same transparency and accountability requirements as other nonpostal services. 

Sec. 408. Reimbursement of Alaska bypass mail costs 

Requires the State of Alaska to reimburse the Postal Service for 

the expenses incurred in excess of revenue in providing Alaska bypass mail as required under section 5402 of title 39. Alaska is required to pay twenty percent of the full cost in the first year, and 

an additional twenty percent each year until 100 percent cost coverage is attained. The PRC is required to calculate the costs to be 

reimbursed. The PRC has previously estimated these costs as part 

of its annual report on the estimated costs to the Postal Service of 

providing universal service. Its most recent report estimated that 


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bypass mail cost the Postal Service $121 million in FY2009, the 

most recent data available. 

Sec. 409. Appropriations modernization 

Eliminates a provision in law allowing the Postal Service to ask 

for a public service taxpayer subsidy and eliminates two other provisions that constitute the last remaining direct taxpayer expenditures in support of the Postal Service. 

Sec. 410. Retiree health care benefit payment deferral 

Defers $4,500,000,000 of the Postal Service’s retiree health 

prefunding payment of $5,500,000,000 for fiscal year 2011. The retiree health prefunding payment sums scheduled for fiscal year 

2015 and 2016 are each increased by $2,250,000,000. 

TITLE V—POSTAL CONTRACTING REFORM 

Sec. 501. Contracting provisions 

This section is intended to improve Postal Service contracting 

practices and reduce costs. Similar requirements are applied to the 

PRC. 

§ 701. Definitions—Terms used in this title are defined. ‘‘Postal 

contract’’ is defined as any contract for the procurement of goods 

or service, including any agreement or memorandum of understanding entered into by the Postal Service or the PRC. As applied 

to the PRC, postal contracts are defined as those in excess of the 

Simplified Acquisition Threshold, currently $150,000. 

§ 702. Advocate for competition—The Postal Service and PRC 

must establish competition advocates responsible for promoting the 

contracting out of functions that the private sector can perform 

equally well or better and at lower cost. The competition advocates 

are to promote competition to the maximum extent practicable consistent with obtaining best value, and to review procurement activities. Each competition advocate must report annually on initiatives 

to promote outsourcing and competition, and on any existing barriers. Currently, there are no statutory requirements for any officers of these organizations to seek any level of competition. 

§ 703. Delegation of contracting authority—The Postal Service 

and PRC must issue policies on contracting officer delegations of 

authority. Any delegation of authority for postal contracts outside 

the functional contracting unit must be made readily available and 

accessible on its website. No excuses policies clearly establish responsibility and accountability for postal contracts. A contracting 

officer is required to maintain an awareness of and engagement in 

the activities being performed on all postal contracts of which that 

officer has cognizance, including contracts involving delegations of 

authority. The senior procurement executive is given ultimate responsibility and accountability for the award and administration of 

postal contracts. 

§ 704. Posting of noncompetitive purchase requests for noncompetitive contracts—The Postal Service must publicly post the 

noncompetitive purchase request for any noncompetitive award for 

postal contracts of at least $250,000, with this amount adjusted annually based on inflation. These postings are subject to proprietary 

information exceptions and competitive disadvantage waivers. The 


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PRC must post noncompetitive purchase requests of at least 

$20,000. 

§ 705. Review of ethical issues—Ethics officials at the Postal Service and PRC are required to review any ethical issues relating to 

a proposed contract before it is awarded and advise the contracting 

officer on their appropriate resolution. 

§ 706. Ethical restrictions on participation in certain contracting 

activity—The Postal Service and PRC are required to establish regulations that limit contracting officers from entering into a postal 

contract with any party with whom the contracting officer has a 

personal or business relationship, as defined in the Standards of 

Ethical Conduct for Employees of the Executive Branch. The heads 

of these entities may grant waivers for contracts in their respective 

organizations, but such waivers must be posted on their respective 

websites. They also may void any contract and recover amounts expended under the contract in any cases where there is a final conviction of bribery or conflict of interest. 

Sec. 502. Technical amendment to definition 

Corrects a technical amendment made in the 2006 amendments 

to the Contract Disputes Act that inadvertently deleted the Postal 

Service and PRC from the definition of executive agencies covered 

by this act. This correction will resolve any ambiguity and clarify 

that that Act applies to the Postal Service and the PRC, as it has 

since its enactment in 1978. 

EXPLANATION OF AMENDMENTS

The following amendments were offered to the Ross amendment 

in the nature of a substitute during consideration of H.R. 2309 by 

the full committee on October 13, 2011: 

Rep. Lankford offered an amendment reducing from $5.5 billion to $1 billion the statutorily required fiscal year 2011 payment to 

prefund Postal Service retiree health benefits. To recoup this deferral, the amendment requires the Postal Service pay an additional 

$2.25 billion in prefunding in both fiscal years 2015 and 2016. The 

deferral is designed to give the Postal Service an opportunity to implement the reforms in H.R. 2309, enabling it to make all future 

payments. The amendment was agreed to by voice vote. 

Rep. Cummings offered an amendment to strike the text of the 

bill and insert the text of the Innovate to Deliver Act, H.R. 2967. 

This amendment would have broadly authorized the Postal Service 

to offer non-postal services, established a Chief Innovation Officer, 

required postal rates to be raised so as to cover all costs, and revised the retiree health care prefunding schedule, among other provisions. The amendment was defeated by a vote of 16–17. 

Rep. Ross offered an amendment establishing a two-year delay to 

ensure proper cost attribution for underwater classes of mail. It 

stipulates that, after the two year delay, rate hikes of two-percent 

above inflation are implemented annually until these classes reach 

a minimum of ninety-percent cost coverage. The amendment was 

agreed to by voice vote. 

Rep. Lynch offered an amendment to strike the text of the bill 

and insert the text of H.R. 1351. This amendment would have reallocated approximately $50–$75 billion in postal worker pension 

liability from the Postal Service to the taxpayer, using these realloVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00073 Fmt 6659 Sfmt 6602 E:\HR\OC\HR363P1.XXX HR363P1

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cated funds to pay down the unfunded retiree health care liability. 

The amendment was defeated by a vote of 17–20. 

Rep. Chaffetz offered an amendment allowing the Postal Service 

to immediately deem twelve days per year as ‘‘non-mail’’ delivery 

days as long as six-day delivery is the standard mail delivery. The 

amendment authorizes the Postal Service to file, six months after 

enactment, an advisory opinion request with the Postal Regulatory 

Commission (PRC) to shift to five-day delivery. The PRC will have 

no more than ninety days to file its advisory opinion, and ninety 

days after the release of the opinion the Postal Service will be allowed to move to five-day delivery service. The amendment was 

agreed to by voice vote. 

Rep. Clay offered an amendment to strike a provision to the bill 

that would create an advocate for competition within the Postal 

Service. The amendment was defeated by a vote of 16–22. 

Rep. Buerkle offered an amendment limiting to no more than ten 

percent the portion of post offices closed or consolidated by the CPR 

that can be small and rural post offices. Small and rural post offices are defined as those grouped under Cost Ascertainment 

Grouping K and L levels, the traditional groupings of small and 

rural post offices. This amendment was agreed to by a vote of 21– 

17. 

Rep. Norton offered an amendment expressing the sense of Congress that in any postal reform effort, postal employees receive 

their full and proper pensions and benefits, and collective bargaining agreements are honored. The amendment was adopted by 

unanimous consent. 

Rep. Chaffetz offered an amendment defining the term ‘‘economic 

savings’’ in section 211(g) to include savings achieved through the 

prevention of planned in-sourcing of activities currently contracted 

out by the Postal Service. The amendment was agreed to by voice 

vote. Although this amendment was accepted, the provision of the 

bill this amendment modified (section 211(g)) was removed from 

the bill text as a result of the Meehan Amendment; therefore, the 

text of this amendment is not included in the final text of the reported legislation. 

Rep. Norton offered an amendment to strike subsection 112(c) of 

the bill and insert provisions substituting a different method than 

the one in the base bill for providing alternative access to postal 

services. The amendment was defeated by a vote of 16–22. 

Rep. Meehan offered an amendment making several substantive 

changes to the bill. It requires any future collective bargaining 

agreements entered into by the Postal Service to authorize its use 

of title 5 reduction-in-force procedures. It requires the renegotiation 

of any extant collective bargaining agreement prohibiting the use 

of title 5 reduction-in-force procedures with respect to any bargaining unit members. 

The amendment stipulates that the solvency Authority will initially be activated in an advisory capacity only for two years. If the 

Postal Service fails to reduce its deficit to less than $2 billion within two years, the Authority goes into full effect, assuming operational control of the Postal Service. In any subsequent year when 

a control period is still in effect, if the Postal Service deficit exceeds 

$2 billion, the Authority immediately assumes operational control. 

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utable to workers’ compensation and retiree health care prefunding 

obligations. 

Under the advisory period created by the amendment, the Postal 

Service may access the collateralized loan described in the base 

bill. The loan is subject to the same terms and conditions as if the 

Authority were in full effect. 

The amendment deletes the Authority’s power to alter collective 

bargaining agreements, since, under the amendment, the granting 

of such powers is unnecessary to ensure the Postal Service will possess reduction-in-force authority. 

The amendment also returns any combined Postal Service pension surplus to the Postal Service to use as it deems fit. It expresses the sense of Congress, however, that the money be used for 

workforce reduction. In calculating a Postal Service pension surplus, the amendment considers both any extant Postal Service 

FERS surplus and any extant Postal Service CSRS deficit, as well 

as the required employer FERS payment contributions foregone by 

the Postal Service since June, 2011. 

Rep. Platts offered a second degree amendment to the Meehan 

amendment explicitly authorizing postal unions to negotiate other 

forms of reduction-in-force authority as alternatives to the existing 

procedures authorized under title 5. This allows postal unions to 

negotiate to allow retirement conversion before resorting to the 

last-in-first-out method prescribed under title 5. The amendment 

does not, however, allow the imposition by arbitrators of a non-title 

5 reduction-in-force process without the approval of the applicable 

union. The amendment was agreed to by voice vote. The Meehan 

amendment was agreed to by voice vote, as amended by the Platts 

amendment. 

Rep. Connolly offered an amendment that would strike titles I, 

II, and III of the bill and insert provisions granting the PRC the 

authority to establish the level of retiree health care prefunding required of the Postal Service. In so doing, this amendment would 

transfer the responsibility of ensuring postal employee retiree 

health care benefits from the Office of Personnel Management to 

the Postal Regulatory Commission. The amendment was defeated 

by a vote of 17–22. 

Rep. Turner offered an en bloc amendment incorporating the text 

of three different amendments. 

The first amendment requires the Authority to submit within one 

year of its inception a savings report to Congress on the savings 

achieved through delivery point modernization. The report may recommend to Congress legislative changes concerning delivery point 

modernization. 

The second amendment clarifies that, in the delivery point modernization section, whether a locale is in a ‘‘registered historic district’’ is a factor to be considered, and refers to one listed in the 

National Register of Historic Places. 

The third amendment creates a contractor hiring preference by 

the Postal Service contractors for postal employees subject to a reduction in force under section 211. The preference would last for 

78 weeks and would be open to individuals not fully retirement eligible at the time of their separation from the Postal Service. Although this amendment was accepted as part of the en bloc amendment, the provision of the bill this amendment modified (section 


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211(i)) was removed from the bill text as a result of Rep. Meehan’s 

amendment; therefore the text of this amendment was not included 

in the final text of the reported legislation. 

This amendment en bloc was agreed to by voice vote. 

Rep. Davis offered an amendment to strike section 311 (‘‘Postal 

Service Workers’ Compensation Reform’’). The amendment was 

withdrawn. 

Rep. Davis offered an amendment to strike section 403 concerning nonprofit mail rates that was struck and replaced by unanimous consent with the text of Issa Amendment 105. Issa Amendment 105 allows for a three-year continuation of the current nonprofit rate preference. After the three-year period, the preference 

for non-profit advertising (currently calculated at forty percent, 

under the existing cost structure of the Postal Service) is reduced 

by two percent annually until it reaches twenty percent. The 

amendment was agreed to by voice vote. 

Rep. Lankford offered an amendment allowing for the decisions 

to close Post Office Branches and Post Office Classified Stations to 

be appealed to the Postal Regulatory Commission. The amendment 

was agreed to by voice vote. 

Rep. Towns offered an amendment requiring a GAO study on the 

effects of postal rightsizing on minority communities to be completed within 1 year. The amendment was agreed to by voice vote. 

Rep. Murphy offered an amendment to strike subsections 211(g) 

and 211(i) and sections 304 and 305 of the bill. This amendment 

would remove all provisions of the bill that would allow the Postal 

Service the ability to rightsize its workforce and strike a modernized collective bargaining process for union contracts. The amendment was defeated by a vote of 17–22. 

Rep. Murphy offered an amendment to strike section 112(c) of 

the bill and insert other language (‘‘Reaffirmation of Public Appeal’’). The amendment was withdrawn. 

Rep. Braley offered an amendment to strike subtitle A (‘‘Commission on Postal Reorganization’’) of title I of the bill, and to strike 

section 112 (‘‘Efficient and Flexible Universal Postal Service’’) of 

the bill. The amendment was defeated by a roll call vote of 17–22. 

Rep. Braley offered an amendment requiring the Commission on 

Postal Rightsizing to file a report to Congress on the employment 

impacts of the closure and consolidation recommendations the 

Commission makes. The report added by the amendment is to be 

made following the submission of the final report of the Commission described in the base bill. The amendment was agreed to by 

voice vote. 

Rep. Yarmuth offered an amendment to strike section 409 of the 

bill. This amendment would delete from the bill the provisions 

eliminating from statute all existing authorizations of appropriations to the Postal Service. The amendment was defeated by a vote 

of 17–23. 

COMMITTEE CONSIDERATION

On October 13, 2011, the Committee met in open session and ordered reported favorably the bill, H.R. 2309, as amended, by a recorded vote of 22 Ayes to 18 Nays, a quorum being present. 


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ROLLCALL VOTES

The following votes were taken during consideration of H.R. 2309 

on October 13, 2011: 

1. Mr. Cummings offered a substitute to the Ross ANS. The 

amendment was defeated by a recorded vote of 16 Ayes to 17 Nays. 

Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, Welch, 

Yarmuth, and Murphy. 

Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, 

Chaffetz, Mack, Walberg, Lankford, Amash, Meehan, DesJarlais, 

Gowdy, Ross, Farenthold, and Kelly. 

2. Mr. Lynch offered a substitute to the Ross ANS. The amendment was defeated by a recorded vote of 17 Ayes to 20 Nays. 

Voting Aye: Platts, Cummings, Towns, Maloney, Norton, Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, 

Braley, Welch, Yarmuth, and Murphy. 

Voting Nay: Issa, Burton, Mica, Turner, McHenry, Jordan, 

Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar, Labrador, Meehan, DesJarlais, Gowdy, Ross, Farenthold, and Kelly. 

3. Mr. Clay offered an amendment to the Ross ANS to strike part 

of Sec. 501 (Sec. 702. ‘‘Advocate for competition’’). The amendment 

failed by a recorded vote of 16 Ayes to 22 Nays. 

Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, Welch, 

Yarmuth, and Murphy. 

Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar, 

Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, Farenthold, 

and Kelly. 

4. Ms. Buerkle offered an amendment to the Ross ANS to add 

language at the end of Sec. 104 regarding limiting retail facilities 

identified for closure. The amendment was agreed to by a recorded 

vote of 21 Ayes to 17 Nays. 

Voting Aye: Issa, Burton, Mica, Platts, Turner, McHenry, Jordan, 

Chaffetz, Mack, Walberg, Lankford, Buerkle, Gosar, Labrador, 

Meehan, DesJarlais, Gowdy, Ross, Guinta, Farenthold, and Kelly. 

Voting Nay: Amash, Cummings, Towns, Maloney, Norton, Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, 

Braley, Welch, Yarmuth, and Murphy. 

5. Ms. Norton offered an amendment to the Ross ANS striking 

subsection (c) of Sec. 112 (‘‘Efficient and Flexible Universal Postal 

Service’’) and replacing it with new language. The amendment 

failed by a recorded vote of 16 Ayes to 22 Nays. 

Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, Welch, 

Yarmuth, and Murphy. 

Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar, 

Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, Farenthold, 

and Kelly. 

6. Mr. Connolly offered an amendment to the Ross ANS to strike 

titles I, II, and III of the bill and insert a new title I. The amendment was defeated by a recorded vote of 17 Ayes to 22 Nays. 


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Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, Welch, 

Yarmuth, Murphy, and Speier. 

Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar, 

Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, Farenthold, 

and Kelly. 

7. Mr. Murphy offered an amendment to strike subsections (g) 

and (i) of section 211, and to strike sections 304 and 305 of the bill. 

The amendment was defeated by a recorded vote of 17 Ayes to 22 

Nays. 

Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, Welch, 

Yarmuth, Murphy, and Speier. 

Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar, 

Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, Farenthold, 

and Kelly. 

8. Mr. Braley offered an amendment to the Ross ANS to strike 

subtitle A (‘‘Commission on Postal Reorganization’’) of title I of the 

bill, and to strike section 112 (‘‘Efficient and Flexible Universal 

Postal Service’’) of the bill. The amendment was defeated by a recorded vote of 17 Ayes to 22 Nays. 

Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, Welch, 

Yarmuth, Murphy, and Speier. 

Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar, 

Labrador, Meehan, DesJarlais, Gowdy, Ross, Guinta, Farenthold, 

and Kelly. 

9. Mr. Yarmuth offered an amendment to the Ross ANS to strike 

section 409 (‘‘Appropriations Modernization’’) of the bill. The 

amendment was defeated by a recorded vote of 17 Ayes to 23 Nays. 

Voting Aye: Cummings, Towns, Maloney, Norton, Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, Braley, Welch, 

Yarmuth, Murphy, and Speier. 

Voting Nay: Issa, Burton, Mica, Platts, Turner, McHenry, Jordan, Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar, 

Labrador, Meehan, DesJarlais, Walsh, Gowdy, Ross, Guinta, 

Farenthold, and Kelly. 

10. The bill, H.R. 2309, as amended, was favorably reported to 

the House, a quorum being present, by a recorded vote of 22 Ayes 

to 18 Nays. 

Voting Aye: Issa, Burton, Mica, Turner, McHenry, Jordan, 

Chaffetz, Mack, Walberg, Lankford, Amash, Buerkle, Gosar, Labrador, Meehan, DesJarlais, Walsh, Gowdy, Ross, Guinta, 

Farenthold, and Kelly. 

Voting Nay: Platts, Cummings, Towns, Maloney, Norton, Kucinich, Tierney, Clay, Lynch, Cooper, Connolly, Quigley, Davis, 

Braley, Welch, Yarmuth, Murphy, and Speier. 

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of Public Law 104–1 requires a description of 

the application of this bill to the legislative branch where the bill 

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lic services and accommodations. This bill would restore the financial solvency of the United States Postal Service and ensure the efficient and affordable nationwide delivery of mail. As such this bill 

does not relate to employment or access to public services and accommodations. 

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause (2)(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

descriptive portions of this report. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee’s performance goals and 

objectives are reflected in the descriptive portions of this report. 

FEDERAL ADVISORY COMMITTEE ACT

The Committee finds that the legislation does not establish or 

authorize the establishment of an advisory committee within the 

definition of 5 U.S.C. App., Section 5(b). 

UNFUNDED MANDATE STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement as to whether 

the provisions of the reported include unfunded mandates. In compliance with this requirement the Committee has received a letter 

from the Congressional Budget Office included herein. 

EARMARK IDENTIFICATION

H.R. 2309 does not include any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 

COMMITTEE ESTIMATE

Clause 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out H.R. 

2309. However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its 

report a timely submitted cost estimate of the bill prepared by the 

Director of the Congressional Budget Office under section 402 of 

the Congressional Budget Act. 

BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE

COST ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the Rules of the House of Representatives and section 308(a) of the 

Congressional Budget Act of 1974 and with respect to requirements 

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resentatives and section 402 of the Congressional Budget Act of 

1974, the Committee has received the following cost estimate for 

H.R. 2309 from the Director of Congressional Budget Office: 

DECEMBER 1, 2011. 

Hon. DARRELL ISSA, Chairman, Committee on Oversight and Government Reform, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2309, the Postal Reform 

Act of 2011. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Mark Grabowicz. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

H.R. 2309—Postal Reform Act of 2011 

Summary: H.R. 2309 would change the laws that govern the operation of the United States Postal Service (USPS). Major provisions of the bill would: • Permit the Postal Service to reduce mail delivery from six 

to five days per week; • Transfer about $11 billion in surplus retirement contributions from the Civil Service Retirement and Disability Fund 

(CSRDF) to the Postal Service Fund; • Reduce the contribution made by the Postal Service for 

employees’ health nd life insurance premiums; • Change the payments that the Postal Service is required 

to make to the Postal Service Retiree Health Benefits Fund 

(PSRHBF); and 

• Eliminate annual appropriations made to the Postal Service for free and reduced rate mail. 

In addition, other provisions of H.R. 2309 would aim to help the 

Postal Service reduce its costs and increase its income. 

CBO estimates that enacting the bill would result in off-budget savings totaling $26.2 billion and on-budget costs of $7.7 billion 

over the 2012–2021 period. (USPS cash flows are recorded in the 

federal budget in the Postal Service Fund and are classified as offbudget, while the cash flows of the PSRHBF and CSRDF are onbudget.) 

Combining those effects, CBO estimates that the net savings to the unified budget from enacting H.R. 2309 would be $18.5 billion 

over the 2012–2021 period. All of those effects reflect changes in direct spending. Enacting H.R. 2309 would not affect revenues. Payas-you-go procedures apply because enacting the legislation would 

increase on-budget direct spending. 

In addition, CBO estimates that H.R. 2309 would affect spending 

subject to appropriation. Assuming that future appropriations for 

the Postal Service are reduced consistent with the bill’s provisions, 

we estimate that implementing H.R. 2309 would yield discretionary 

savings of $880 million over the 10-year period. 

H.R. 2309 would impose intergovernmental and private-sector 

mandates, as defined in the Unfunded Mandates Reform Act 

(UMRA), on some groups of mailers by increasing postage rates. 


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The bill also would impose an intergovernmental mandate on the 

state of Alaska by requiring the state to reimburse the USPS for 

costs it incurs to provide bypass mail service in Alaska. Assuming 

that the requirement on Alaska is enforceable, CBO estimates that 

the costs of complying with the intergovernmental mandates in the 

bill would exceed the annual threshold established in UMRA beginning in 2015. CBO projects that the intergovernmental threshold in 

2015 will be $76 million, including adjustments for inflation. 

CBO estimates that the costs to the private sector to comply with 

the mandates would fall below the annual threshold for private-sector mandates established in UMRA ($142 million in 2011, adjusted 

annually for inflation) in the first five years the mandates are in 

effect. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 2309 is shown in Table 1. The costs of this 

legislation fall within budget functions 370 (commerce and housing 

credit) and 600 (income security). 

Basis of estimate: For this estimate, CBO assumes that H.R. 

2309 will be enacted before the end of calendar year 2011. The bill 

would affect outlays of the off-budget Postal Service Fund and the 

on-budget PSRHBF and CSRDF. CBO estimates that net savings 

to the unified budget would total $18.5 billion over the 2012–2021 

period. 


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TABLE 1—SUMMARY OF BUDGETARY IMPACT OF H.R. 2309, THE POSTAL REFORM ACT OF 2011 

By fiscal year, in millions of dollars— 

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012–2016 2012–2021 

OFF-BUDGET CHANGES IN DIRECT SPENDING 

Estimated Budget Authority ........................................................... ¥5,450 ¥925 ¥2,300 ¥639 ¥765 ¥3,341 ¥3,280 ¥3,222 ¥3,166 ¥3,107 ¥10,079 ¥26,195 

Estimated Outlays .......................................................................... ¥5,450 ¥925 ¥2,300 ¥639 ¥765 ¥3,341 ¥3,280 ¥3,222 ¥3,166 ¥3,107 ¥10,079 ¥26,195 

ON-BUDGET CHANGES IN DIRECT SPENDING 

Estimated Budget Authority ........................................................... 10,900 0 0 ¥2,250 ¥2,250 260 260 260 260 260 6,400 7,700 

Estimated Outlays .......................................................................... 10,900 0 0 ¥2,250 ¥2,250 260 260 260 260 260 6,400 7,700 

UNIFIED BUDGET CHANGES IN DIRECT SPENDING 

Estimated Budget Authority ........................................................... 5,450 ¥925 ¥2,300 ¥2,889 ¥3,015 ¥3,081 ¥3,020 ¥2,962 ¥2,906 ¥2,847 ¥3,679 ¥18,495 

Estimated Outlays .......................................................................... 5,450 ¥925 ¥2,300 ¥2,889 ¥3,015 ¥3,081 ¥3,020 ¥2,962 ¥2,906 ¥2,847 ¥3,679 ¥18,495 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level ........................................................ 20 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥380 ¥880 

Estimated Outlays .......................................................................... 5 ¥85 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥100 ¥380 ¥880 

Note: Positive numbers indicate increases in costs; negative numbers indicate reductions in costs. 


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OFF-BUDGET CHANGES IN DIRECT SPENDING (POSTAL SERVICE FUND)

CBO estimates that enacting H.R. 2309 would reduce net USPS 

spending by $26.2 billion over the 10-year period; such spending is 

classified as off-budget. Lower spending would result mainly from 

authorizing the Postal Service to reduce mail service from six days 

per week to five. Details of changes in spending from the Postal 

Service Fund are shown in Table 2 and discussed in the following 

subsections. 

Reduction of Mail Delivery. H.R. 2309 would authorize the Postal 

Service to deliver mail five days per week, beginning in fiscal year 

2013. As a result, the Postal Service expects that it would eliminate mail delivery on Saturdays. The Postal Service estimates that 

this reduction in service would result in net savings of $3.1 billion 

annually, mostly in personnel and transportation costs. The Postal 

Regulatory Commission (PRC) estimates that reduction of mail delivery from six to five days per week would save only $1.7 billion 

per year. The PRC estimates lower net savings largely because it 

disagrees with the Postal Service’s assumption that most mail currently delivered on Saturdays could be delivered on Mondays with 

minimal increased costs. PRC’s estimate therefore includes a bigger 

expected offset to the gross savings for eliminating Saturday deliveries. 


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TABLE 2—OFF-BUDGET CHANGES IN DIRECT SPENDING UNDER H.R. 2309 

By fiscal year, in millions of dollars 2012— 

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012–2021 

Reduction of Mail Delivery: 

Estimated Budget Authority ................................................. 0 ¥1,000 ¥2,000 ¥2,500 ¥2,500 ¥2,500 ¥2,400 ¥2,300 ¥2,200 ¥2,100 ¥19,000 

Estimated Outlays ................................................................ 0 ¥1,000 ¥2,000 ¥2,500 ¥2,500 ¥2,500 ¥2,400 ¥2,300 ¥2,200 ¥2,100 ¥19,000 

Transfer of Surplus Postal Retirement Contributions: 

Estimated Budget Authority ................................................. ¥10,900 0 0 0 0 0 0 0 0 0 –10,900 

Estimated Outlays ................................................................ ¥10,900 0 0 0 0 0 0 0 0 0 ¥10,900 

USPS Changes in Spending: 

Estimated Budget Authority ................................................. 5,450 0 0 0 0 0 0 0 0 0 5,450 Estimated Outlays ................................................................ 5,450 0 0 0 0 0 0 0 0 0 5,450 

Limit Postal Contributions for Health and Life Insurance: 

Estimated Budget Authority ................................................. 0 0 ¥350 ¥413 ¥529 ¥555 ¥584 ¥611 ¥640 ¥671 ¥4,353 

Estimated Outlays ................................................................ 0 0 ¥350 ¥413 ¥529 ¥555 ¥584 ¥611 ¥640 ¥671 ¥4,353 

Changes in Payments to the PSRHBF: 

Estimated Budget Authority ................................................. 0 0 0 2,250 2,250 ¥260 ¥260 ¥260 ¥260 ¥260 3,200 

Estimated Outlays ................................................................ 0 0 0 2,250 2,250 ¥260 ¥260 ¥260 ¥260 ¥260 3,200 

Payment from the State of Alaska: 

Estimated Budget Authority ................................................. 0 0 ¥25 ¥50 ¥76 ¥101 ¥126 ¥126 ¥126 ¥126 ¥882 

Estimated Outlays ................................................................ 0 0 ¥25 ¥50 ¥76 ¥101 ¥126 ¥126 ¥126 ¥126 ¥882 

Elimination of Annual Appropriations: 

Estimated Budget Authority ................................................. 0 100 100 100 100 100 100 100 100 100 900 Estimated Outlays ................................................................ 0 100 100 100 100 100 100 100 100 100 900 

Changes in Rates for Mail Services: 

Estimated Budget Authority ................................................. 0 0 0 0 ¥15 0 ¥10 ¥25 ¥40 ¥50 ¥110 

Estimated Outlays ................................................................ 0 0 0 0 ¥15 0 ¥10 ¥25 ¥40 ¥50 ¥110 

Total Off-budget Changes: 

Estimated Budget Authority ................................................. ¥5,450 ¥925 ¥2,300 ¥639 ¥765 ¥3,341 ¥3,280 ¥3,222 ¥3,166 ¥3,107 ¥26,195 

Estimated Outlays ................................................................ ¥5,450 ¥925 ¥2,300 ¥639 ¥765 ¥3,341 ¥3,280 ¥3,222 ¥3,166 ¥3,107 ¥26,195 

Note: PSRHBF = Postal Service Retiree Health Benefits Fund. 


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Based on the estimates prepared by USPS and the PRC, CBO estimates that reducing mail delivery from six to five days per week 

would save about $2.5 billion annually by fiscal year 2015 (roughly 

the midpoint of the USPS and PRC estimates). Estimated savings 

in 2013 and 2014 would be lower—about $1 billion and $2 billion, 

respectively—as the Postal Service increases efficiency under the 

new delivery system. Beginning in 2018, we expect that annual 

savings would gradually decline as those funds would likely be 

spent by the Postal Service or returned to mailers in the form of 

lower rates rather than accumulating as large annual surpluses in 

the Postal Service Fund. We estimate that annual savings would 

fall to $2.1 billion by 2021. 

Transfer of Surplus Postal Retirement Contributions. Within two 

weeks of enactment, H.R. 2309 would transfer to the Postal Service 

Fund any surplus in the USPS Federal Employee Retirement Systems (FERS) account within the CSRDF as of September 30, 2010, 

less any required contributions to FERS that the Postal Service has 

not made during fiscal years 2011 and 2012. The amount transferred to the Postal Service Fund would also be reduced by the 

amount of any liability for USPS retirement contributions for employees enrolled in CSRS as of September 30, 2010. 

The Office of Personnel Management (OPM) estimates that the 

Postal Service’s surplus for its FERS account in the CSRDF was 

$10.9 billion as of September 30, 2010. According to OPM, there is 

a surplus—not a liability—for USPS retirement contributions for 

employees enrolled in CSRS as of September 30, 2010, so that calculation would not affect the amount transferred. The Postal Service stopped making FERS contributions in June 2011, but the 

agency expects to make any unpaid contributions in December 

2011, so there would be no reduction to the amount transferred to 

the Postal Service Fund. 

Therefore, under the bill, CBO estimates that $10.9 billion would 

be transferred from the CSRDF to the Postal Service Fund in fiscal 

year 2012. This transfer would be classified as a savings of $10.9 

billion in off-budget direct spending for the Postal Service Fund in 

2012. (This also would result in a cost of $10.9 billion to the onbudget CSRDF, as discussed below.) 

USPS Changes in Spending. H.R. 2309 would permit the Postal 

Service to use the $10.9 billion transferred from the CSRDF for 

purposes that it considers appropriate. Based on information from 

the Postal Service, we expect that the agency would use the 

amount transferred to make payments to the PSRHBF, pay off its 

debt to the U.S. Treasury, fund employee buyout plans, or for other 

expenses. 

We expect that use of those transfers would effectively lower the 

net expenses of the Postal Service by $10.9 billion in 2012; that reduction would lead the agency to modify its ongoing efforts under 

current law to reduce spending. Faced with an imbalance of receipts from postal customers and operational costs, the Postal Service has made significant efforts to reduce spending in recent years. 

For example, early in 2009, the Postal Service announced plans to 

cut spending by $5.9 billion over the 2009–2010 period. Just a few 

months later in response to worsening financial conditions, the 

agency accelerated the plan to cut $5.9 billion in 2009 alone. Since 

then, the Postal Service has announced the possibility of closing 


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post offices, laying off employees, and making major reductions in 

service. 

CBO expects that the transfer of $10.9 billion to the Postal Service would lead the agency to alter its cost-reduction program by 

cutting spending less aggressively than it would without the legislation. Thus, CBO anticipates that enacting this legislation would 

lead USPS to increase other expenses relative to current law. We 

estimate that this increase in other postal expenses would be about 

half of the $10.9 billion that would be transferred—$5.45 billion in 

2012. 

Limit Postal Contributions for Health and Life Insurance. Currently, the Postal Service pays 78.5 percent of the health insurance 

premiums and 100 percent of the life insurance premiums for most 

of its employees. H.R. 2309 would lower those employer contributions to about 70 percent for health insurance and 33 percent for 

life insurance. For employees covered by a collective bargaining 

agreement, the lower employer contributions would take effect 

after the expiration of the agreement. For other employees, the 

lower contributions would begin in fiscal year 2014. In fiscal year 2011, the Postal Service paid about $4.8 billion for health insurance premiums and about $187 million for life insurance premiums for active employees. Based on those current payments, CBO estimates that the lower employer contributions in 

H.R. 2309 would save about $700 million in 2014, with potential 

savings growing to more than $1 billion by 2016 when all employees would be subject to this provision. For this estimate, CBO anticipates that some individuals who face lower employer contributions would either leave the Federal Employees Health Benefits 

(FEHB) program or switch to lower-cost plans. However, as with the savings from the $10.9 billion transferred 

from CSRDF, we anticipate that enacting this provision would lead 

the agency to cut expenses less aggressively than it otherwise 

would and thereby lead to an increase in other postal expenses. For 

example, the Postal Service has sharply curtailed its capital spending in recent years and could apply savings from the lower employer contributions to enhancements in facilities or other postal 

infrastructure. CBO estimates that net savings to the Postal Service would be about half of the potential savings—about $350 million in 2014, $529 million by 2016, and $671 million by 2021. 

Changes in Payments to the PSRHBF. Under current law, over 

the 2012–2016 period the Postal Service is required to make specified annual payments ranging from $5.6 billion to $5.8 billion to 

the PSRHBF, an on-budget account established by the Postal Accountability and Enhancement Act (Public Law 109–435) to 

prefund future retirees’ health benefits. Beginning in 2017, the 

agency is required to make annual payments amortized over 40 

years to liquidate the unfunded liability for retirees’ health benefits. The unfunded liability is the total liability accrued to date for 

retirees’ health benefits minus the PSRHBF balance; that is, the 

amount that has not been set aside to cover future liabilities. 

H.R. 2309 would increase the specified payment to the PSRHBF 

for fiscal year 2015 from $5.7 billion to $7.95 billion and would increase the 2016 payment from 5.8 billion to $8.05 billion. 

This provision would increase off-budget costs by $2.25 billion in 

both 2015 and 2016. In addition, OPM estimates that it would deVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00086 Fmt 6659 Sfmt 6602 E:\HR\OC\HR363P1.XXX HR363P1

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crease the amortization payments required over the 2017–2021 period by about $260 million annually. (This also would result in savings in 2015 and 2016 and costs over the 2017–2021 period to the 

on-budget PSRHBF, as discussed below.) 

Payments from the State of Alaska. H.R. 2309 would direct the 

state of Alaska, beginning in fiscal year 2013, to make annual payments to the Postal Service to cover the costs of providing certain 

mail service (known as ‘‘bypass mail’’) in the state provided by private air carriers. The amount of the payment for a full year would 

be estimated by the PRC. Under the bill’s provisions, the state’s 

first payment would be equal to 20 percent of the full-year estimate, with payments for each subsequent year growing by an additional 20 percent of the PRC estimate. 

For this estimate, CBO assumes that USPS could enforce this requirement on the state, and that Alaska would make the payments 

as directed by the bill. Based on information from the PRC, CBO 

estimates that the payment to the Postal Service would be about 

$25 million in 2013, increasing to $126 million by 2017. (If the provision was found by courts to be unenforceable, we expect that 

USPS would continue to provide such services to customers in 

Alaska and that this provision of the bill would result in no savings 

to the Postal Service.) 

Elimination of Annual Appropriations. H.R. 2309 would eliminate the annual appropriation to reimburse the Postal Service for 

delivery of free and reduced rate mail, including mail for overseas 

voting and mail for the blind. Based on the amounts appropriated 

in recent years, CBO estimates that this provision would replace 

discretionary spending of $100 million per year with direct spending from the Postal Service Fund, beginning in fiscal year 2013, assuming that future appropriations for the Postal Service are reduced consistent with this estimate. (Reductions in spending subject to appropriation are discussed below.) 

Changes in Rates for Mail Services. H.R. 2309 would direct the 

Postal Service to gradually increase rates for nonprofit advertising 

mail, beginning no earlier than three years after the bill’s enactment to equal 80 percent of the rate charged to deliver commercial 

advertising. The nonprofit rates are currently between 60 percent 

and 75 percent of the commercial rate. Because there is an annual 

cap on rate increases for each class of mail, raising rates for nonprofit advertising would require lowering rates for other mail products in the same class. Based on information from the Postal Service about the anticipated responses to price changes by users of 

nonprofit mail and other mail products in that class, we estimate 

that this provision would result in a net decrease in USPS revenues in 2016 of about $15 million but would increase revenues over 

the 2016–2021 period by $110 million. (USPS revenues are a credit 

against direct spending by the agency.) 

The bill also would direct the Postal Service to set postage rates 

(within the annual cap on rate increases in current law) so that 

most types of mail products cover the costs attributable to them. 

In addition, H.R. 2309 would require the Postal Service to raise 

rates each year on those classes of mail with delivery costs that exceed revenues, beginning at the end of 2015. Those increases would 

depend on the outcome of a study to be prepared by the PRC in 

2014 concerning excess capacity within USPS. 


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In general, the Postal Service aims to set rates to maximize total 

mail revenue. CBO anticipates that the Postal Service will continue 

to attempt to maximize revenue while decreasing costs although we 

cannot predict the extent to which revenue for certain classes of 

mail will cover their costs in 2015. (The PRC has already directed 

the Postal Service to increase the cost coverage for certain products.) It is unclear whether changing rates or reallocating price increases under the current cap on rate increases to ensure the cost 

coverage of certain products would significantly increase or decrease total revenue in the future. 

ON-BUDGET CHANGES IN DIRECT SPENDING

CBO estimates that enacting H.R. 2309 would increase on-budget direct spending by $5.8 billion over the 2012–2021 period. Those 

costs result from changes in the cash flows of the CSRDF and the 

PSRHBF as shown in Table 3 and discussed in the following subsections. 

TABLE 3—CHANGES IN DIRECT SPENDING FOR ON-BUDGET ACCOUNTS UNDER H.R. 2309 

By fiscal year, in millions of dollars— 

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012– 

2021 

Transfer of Surplus Postal Retirement Contributions: 

Estimated Budget 

Authority ............ 10,900 0 0 0 0 0 0 0 0 0 10,900 

Estimated Outlays 10,900 0 0 0 0 0 0 0 0 0 10,900 

Changes in Payments to 

the PSRHBF: 

Estimated Budget 

Authority ............ 0 0 0 ¥2,250 ¥2,250 260 260 260 260 260 ¥3,200 

Estimated Outlays 0 0 0 ¥2,250 ¥2,250 260 260 260 260 260 ¥3,200 

Total On-budget 

Changes: 

Estimated Budget 

Authority ............ 10,900 0 0 ¥2,250 ¥2,250 260 260 260 260 260 7,700 

Estimated Outlays 10,900 0 0 ¥2,250 ¥2,250 260 260 260 260 260 7,700 

Note: PSRHBF = Postal Service Retiree Health Benefits Fund. 

Transfer of Surplus Postal Retirement Contributions. As discussed previously, H.R. 2309 would transfer to the Postal Service 

Fund any surplus in the USPS FERS account within the CSRDF 

as of September 30, 2010, with certain adjustments made to that 

amount. Based on information from OPM, CBO estimates that 

$10.9 billion would be transferred from the CSRDF to the Postal 

Service Fund in 2012. This transfer would increase on-budget 

spending from the CSRDRF by $10.9 billion in 2012. 

Changes in Payments to the PSRHBF. As discussed previously, 

H.R. 2309 would increase the specified payment from the Postal 

Service to the PSRHBF from $5.7 billion to $7.95 billion for fiscal 

year 2015 and from $5.8 billion to $8.05 billion for fiscal year 2016. 

By increasing receipts to the PSRHBF, this provision would decrease on-budget costs by $2.25 billion in both 2015 and 2016. In 

addition, OPM estimates that it would decrease the amortization 

payments paid to the PSRHBF by the Postal Service over the 

2017–2021 period by $260 million annually (the reductions in payments would be recorded as on-budget costs). 


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OTHER PROVISIONS THAT COULD AFFECT DIRECT SPENDING

Several other provisions of H.R. 2309 could help the Postal Service in its efforts to lower costs; however, CBO has not estimated additional savings for those provisions because it is not clear that any 

such savings would exceed what we expect could be achieved under 

current law or under other provisions of the legislation. 

The bill would: establish a commission to recommend closures 

and consolidations of postal facilities; direct arbitrators involved in 

future labor negotiations to consider the financial condition of the 

Postal Service when mediating disputes between USPS and its 

labor unions; and reform Postal Service contracting practices. 

Those provisions might reduce USPS costs, but CBO expects that 

any net savings probably would be indistinguishable from savings 

that could result from the Postal Service’s current efforts to close 

facilities or negotiate more favorable labor contracts and improve 

procurement practices. 

H.R. 2309 also would authorize the Postal Service to establish a 

program to allow advertising at USPS facilities and on USPS vehicles and a program to provide services for agencies of state governments or federal agencies for a fee. Implementing these programs 

would require the Postal Service to compete with the various media 

currently available to advertisers and to offer cost-effective alternatives for services to state or federal agencies. Those proposed 

programs might increase USPS revenues but also would add to 

costs. CBO has no information to predict the cost-effectiveness of 

such new ventures undertaken by the Postal Service. 

Finally, under the bill, if the Postal Service were in default for 

more than 30 days to the U.S. Treasury with respect to any form 

of borrowing, or for any scheduled payments to any 

fund in the U.S. Treasury, the proposed Postal Service Financial 

Responsibility and Management Assistance Authority would be established. That new authority would be a new entity that would 

advise and potentially control the Postal Service. CBO cannot judge 

whether the new management entity would be more successful 

than the existing USPS management structure; however, because 

the bill would transfer an estimated nearly $11 billion to the Postal 

Service in 2012, CBO does not expect that USPS would be in a financial situation that required the new management authority to 

be created for the foreseeable future. 

SPENDING SUBJECT TO APPROPRIATION

H.R. 2309 would authorize the appropriation of $20 million from 

the Postal Service Fund for the Commission on Postal Reorganization that would be established by the bill. The commission would 

evaluate and recommend potential closures and consolidations of 

postal facilities and carry out other duties. CBO estimates that the 

commission would spend about $5 million in fiscal year 2012 and 

about $15 million in 2013, assuming appropriation of the authorized amounts. 

H.R. 2309 also would eliminate the annual appropriation to reimburse the Postal Service for the delivery of free and reduced rate 

mail, including overseas voting materials and mail for the blind. 

Based on the amounts appropriated in recent years, CBO estimates 

that this provision would save about $100 million per year, beginVerDate Mar 15 2010 02:56 Jan 19, 2012 Jkt 019006 PO 00000 Frm 00089 Fmt 6659 Sfmt 6602 E:\HR\OC\HR363P1.XXX HR363P1

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ning in fiscal year 2013, assuming future appropriations for the 

Postal Service are reduced consistent with this estimate. 

Pay-as-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. The net 

changes in outlays that are subject to those pay-as-you-go procedures are shown in the following table. (Enacting H.R. 2309 would 

not affect revenues.) Only on-budget changes to outlays or revenues 

are subject to pay-as-you-go procedures. 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 2309, THE POSTAL REFORM ACT OF 2011, 

AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM ON OCTOBER 13, 2011 

By fiscal year, in millions of dollars— 

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012– 

2016 

2012– 

2021 

NET INCREASE OR DECREASE (¥) IN THE ON-BUDGET THE DEFICIT 

Statutory Pay-AsYou-Go Impact 10,900 0 0 ¥2,250 ¥2,250 260 260 260 260 260 6,400 7,700 

Intergovernmental and private-sector impact: H.R. 2309 would 

impose intergovernmental and private-sector mandates, as defined 

in UMRA, on some groups of mailers and on the state of Alaska. 

Assuming that the requirement on Alaska is enforceable, CBO estimates that the costs of complying with the intergovernmental mandates in the bill would exceed the annual threshold established in 

UMRA beginning in 2015. CBO projects that the intergovernmental 

threshold in 2015 will be $76 million, including adjustments for inflation. CBO estimates that the costs to the private sector to comply with the mandates would fall below the annual threshold for 

private-sector mandates established in UMRA ($142 million in 

2011, adjusted annually for inflation) in the first five years the 

mandates are in effect. 

MANDATES THAT APPLY TO BOTH PUBLIC AND PRIVATE ENTITIES

H.R. 2309 contains intergovernmental and private-sector mandates because it would increase the postage rates for advertising 

paid by nonprofits and entities that mail agricultural periodicals 

three years after enactment. Based on the current postal price 

structure, an increase in the rates for standard nonprofit mailers 

would result in a decrease in the rates paid by standard commercial mailers. The net increase for standard mailers would total 

about $60 million over the first five years the mandates are in effect. (Nonprofit and commercial standard mailers include both public and private entities.) Because the bill would increase postage 

rates for governmental mailers, such as public libraries and 

schools, and would decrease costs for agencies of state and local 

governments that pay regular rates, CBO estimates that the net 

costs, if any, to public entities would be small. 

MANDATE THAT APPLIES TO PUBLIC ENTITIES ONLY

The bill would impose an intergovernmental mandate on the 

state of Alaska by requiring the state to reimburse the USPS for 

costs it incurs to provide bypass mail service in Alaska. Bypass 


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mail is mail that is prepared by a pre-qualified shipper and delivered directly to the recipient by a private air carrier. The USPS 

pays the private air carrier a set rate for the delivery. Assuming 

that the requirement on the state of Alaska to pay the reimbursement is enforceable, CBO estimates that the cost to the state would 

be about $25 million in 2013 and would increase to about $130 million by 2017. 

MANDATE THAT APPLIES TO PRIVATE ENTITIES ONLY

In addition, the bill would increase the postage rate paid by national and state political committees by repealing their current discount. Based on information from the USPS, CBO estimates that 

the cost to those mailers would be small and would fall well below 

the annual threshold beginning the first year after enactment. 

Estimate prepared by: Federal Costs: Julia Mitchell—FEHB 

Costs; Mark Grabowicz—All Other Costs. Impact on State, Local, 

and Tribal Governments: Elizabeth Cove Delisle. Impact on the 

Private Sector: Paige Piper/Bach. 

Estimate approved by: Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

TITLE 39, UNITED STATES CODE 

* * * * * * * 

PART I—GENERAL 

PART I. GENERAL 

Chapter. Sec. 

1. Postal Policy and Definitions .............................................................. 101 

* * * * * * * 

7. Contracting Provisions ........................................................................... 701 

* * * * * * * 

PART IV. MAIL MATTER 

30. Nonmailable Matter ............................................................................... 3001 

* * * * * * * 

37. Nonpostal Services ................................................................................... 3701 

* * * * * * * 

CHAPTER 1—POSTAL POLICY AND DEFINITIONS 

§ 101. Postal policy 

(a) * * * 

ø(b) The Postal Service shall provide a maximum degree of effective and regular postal services to rural areas, communities, and 

small towns where post offices are not self-sustaining. No small 

post office shall be closed solely for operating at a deficit, it being 


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the specific intent of the Congress that effective postal services be 

insured to residents of both urban and rural communities.¿ 

(b) The Postal Service shall provide effective and regular postal 

services to rural areas, communities, and small towns where post offices are not self-sustaining. 

(c) As an employer, the Postal Service shall achieve and maintain 

compensation for its officers and employees comparable to the total 

rates and types of compensation paid in the entire private sector 

of the economy of the United States. It shall place particular emphasis upon opportunities for career advancements of all officers 

and employees and the achievement of worthwhile and satisfying 

careers in the service of the United States. 

* * * * * * * 

CHAPTER 4—GENERAL AUTHORITY 

* * * * * * * 

§ 403. General duties 

(a) * * * 

(b) It shall be the responsibility of the Postal Service— 

(1) * * * 

* * * * * * * 

ø(3) to establish and maintain postal facilities of such character and in such locations, that postal patrons throughout the 

Nation will, consistent with reasonable economies of postal operations, have ready access to essential postal services.¿ 

(3) to ensure that postal patrons throughout the Nation will, 

consistent with reasonable economies of postal operations, have 

ready access to essential postal services. 

* * * * * * * 

§ 404. Specific powers 

(a) * * * 

* * * * * * * 

(d)(1) * * * 

(2) The Postal Service, in making a determination whether or not 

to close or consolidate a post office— 

(A) shall consider— 

(i) * * * 

* * * * * * * 

ø(iii) whether such closing or consolidation is consistent 

with the policy of the Government, as stated in section 

101(b) of this title, that the Postal Service shall provide a 

maximum degree of effective and regular postal services to 

rural areas, communities, and small towns where post offices are not self-sustaining;¿ 

(iii) whether such closing or consolidation is consistent 

with the policy of the Government, as stated in section 

101(b), that the Postal Service shall provide effective and 


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regular postal services to rural areas, communities, and 

small towns where post offices are not self-sustaining; 

* * * * * * * 

(5) A determination of the Postal Service to close or consolidate 

any post office may be appealed by any person served by such office 

to the Postal Regulatory Commission within 30 days after such determination is made available to such person under paragraph (3). 

The Commission shall review such determination on the basis of 

the record before the Postal Service in the making of such determination. The Commission shall make a determination based upon 

such review no later than ø120 days¿ 60 days after receiving any 

appeal under this paragraph. The Commission shall set aside any 

determination, findings, and conclusions found to be— 

(A) * * * 

* * * * * * * 

The Commission may affirm the determination of the Postal Service or order that the entire matter be returned for further consideration, but the Commission may not modify the determination of the 

Postal Service. The Commission may suspend the effectiveness of 

the determination of the Postal Service until the final disposition 

of the appeal. The provisions of section 556, section 557, and chapter 7 of title 5 shall not apply to any review carried out by the 

Commission under this paragraph. 

* * * * * * * 

(7)(A) The appeals process set forth in paragraph (5) shall not 

apply to a determination of the Postal Service to close a post office 

if there is located, within 2 miles of such post office, a qualified contract postal unit. 

(B) For purposes of this paragraph— 

(i) the term ‘‘contract postal unit’’ means a store or other place 

of business which— 

(I) is not owned or operated by the Postal Service; and 

(II) in addition to its usual operations, provides postal 

services to the general public under contract with the Postal 

Service; and 

(ii) the term ‘‘qualified contract postal unit’’, as used in connection with a post office, means a contract postal unit which— 

(I) begins to provide postal services to the general public 

during the period— 

(aa) beginning 1 year before the date on which the 

closure or consolidation of such post office is scheduled 

to take effect; and 

(bb) ending on the 15th day after the date on which 

the closure or consolidation of such post office is scheduled to take effect; and 

(II) has not, pursuant to subparagraph (A), served as the 

basis for exempting any other post office from the appeals 

process set forth in paragraph (5). 

(C)(i) If the contract postal unit (which is providing postal services that had been previously provided by the post office that was 

closed) does not continue to provide postal services, as required by 

subparagraph (B)(i)(II), for at least the 2-year period beginning on 

the date on which such post office was closed, the contract postal 


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unit shall be subject to a closure determination by the Postal Service 

to decide whether a post office must be reopened within the area (delimited by the 2-mile radius referred to in subparagraph (A)). 

(ii) A decision under clause (i) not to reopen a post office may be 

appealed to the Postal Regulatory Commission under procedures 

which the Commission shall by regulation prescribe. Such procedures shall be based on paragraph (5), except that, for purposes of 

this clause, paragraph (5)(C) shall be applied by substituting ‘‘in 

violation of section 101(b), leaving postal patrons without effective 

and regular access to postal services’’ for ‘‘unsupported by substantial evidence on the record’’. 

(8) For purposes of this subsection, the term ‘‘post office’’ means 

a post office and any other facility described in section 102(2) of the 

Postal Reform Act of 2011. 

(e)(1) * * * 

* * * * * * * 

(6) Nothing in this section shall be considered to prevent the Postal Service from establishing nonpostal products and services that 

are expressly authorized by chapter 37. 

(f)(1) The Postmaster General may, with respect to any year for 

which 6-day delivery is otherwise required, declare up to 12 nonmail delivery days. Not later than 1 month before the beginning of 

the year, the Postmaster General shall submit to the Board of Governors a report listing the non-mail delivery days in such year. 

(2) A non-mail delivery day under this subsection shall be a day 

other than— 

(A) a Sunday; 

(B) a legal public holiday listed in section 6103(a) of title 5 

or any other day declared to be a holiday by Federal statute or 

Executive order; or 

(C) during the 30-day period that ends on the date of a regularly scheduled general election for Federal office. 

(3) Any day which is declared under this subsection to be a nonmail delivery day— 

(A) shall, for purposes of mail delivery and such other postal 

operations as the Postal Service may by regulation prescribe, be 

treated as if it were a Sunday; except that 

(B) an employee of the Postal Service (other than one who is 

prevented from working on such day by reason of this subsection) shall be entitled to the same pay and benefits for that 

day as if this subsection had not been enacted. 

(4)(A) The 6-day mail delivery requirement shall not apply with 

respect to a week in which a non-mail delivery day under this subsection occurs. 

(B) The authority to declare a non-mail delivery day under this 

subsection shall be considered to be within the right of the Postal 

Service to determine the methods, means, and personnel by which 

postal operations are to be conducted. 

(5) Not less than 6 months after the date of enactment of this subsection, the Postal Service may submit a proposal under section 

3661 for a nationwide change in service to reduce mail delivery 

from 6 days to 5 days each week. Notwithstanding any other provision of law, the Postal Service shall maintain 6-day delivery service 

as the standard mail delivery schedule until 90 days following the 


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rendering of an advisory opinion on 5-day delivery by the Postal 

Regulatory Commission. 

* * * * * * * 

§ 411. Cooperation with other Government agencies 

Executive agencies within the meaning of section 105 of title 5 

and the Government Printing Office are authorized to furnish property, both real and personal, and personal and nonpersonal services 

to the Postal Service, and the Postal Service is authorized to furnish property and services to them. The furnishing of property and 

services under this section shall be under such terms and conditions, øincluding reimbursability¿ including reimbursability within 

the limitations of chapter 37, as the Postal Service and the head 

of the agency concerned shall deem appropriate. 

* * * * * * * 

CHAPTER 7—CONTRACTING PROVISIONS 

Sec. 

701. Definitions. 

702. Advocate for competition. 

703. Delegation of contracting authority. 

704. Posting of noncompetitive purchase requests for noncompetitive contracts. 

705. Review of ethical issues. 

706. Ethical restrictions on participation in certain contracting activity. 

§ 701. Definitions 

In this chapter— 

(1) the term ‘‘contracting officer’’ means an employee of a covered postal entity who has authority to enter into a postal contract; 

(2) the term ‘‘covered postal entity’’ means— 

(A) the Postal Service; or 

(B) the Postal Regulatory Commission; 

(3) the term ‘‘head of a covered postal entity’’ means— 

(A) in the case of the Postal Service, the Postmaster General; or 

(B) in the case of the Postal Regulatory Commission, the 

Chairman of the Postal Regulatory Commission; 

(4) the term ‘‘postal contract’’ means— 

(A) in the case of the Postal Service, any contract (including any agreement or memorandum of understanding) entered into by the Postal Service for the procurement of 

goods or services; or 

(B) in the case of the Postal Regulatory Commission, any 

contract (including any agreement or memorandum of understanding) in an amount exceeding the simplified acquisition threshold (as defined in section 134 of title 41 and 

adjusted under section 1908 of such title) entered into by 

the Postal Regulatory Commission for the procurement of 

goods or services; and 

(5) the term ‘‘senior procurement executive’’ means the senior 

procurement executive of a covered postal entity. 

§ 702. Advocate for competition 

(a) ESTABLISHMENT AND DESIGNATION.— 


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(1) There is established in each covered postal entity an advocate for competition. 

(2) The head of each covered postal entity shall designate for 

the covered postal entity 1 or more officers or employees (other 

than the senior procurement executive) to serve as the advocate 

for competition. 

(b) RESPONSIBILITIES.—The advocate for competition of a covered 

postal entity shall— 

(1) be responsible for promoting— 

(A) the contracting out of functions of the covered postal 

entity that the private sector can perform equally well or 

better, and at lower cost; and 

(B) competition to the maximum extent practicable consistent with obtaining best value by promoting the acquisition of commercial items and challenging barriers to competition; 

(2) review the procurement activities of the covered postal entity; and 

(3) prepare and transmit the annual report required under 

subsection (c). 

(c) ANNUAL REPORT.— 

(1) PREPARATION.—The advocate for competition of a covered 

postal entity shall prepare an annual report describing the following: 

(A) The activities of the advocate under this section. 

(B) Initiatives required to promote contracting out and 

competition. 

(C) Barriers to contracting out and competition. 

(D) In the case of the report prepared by the competition 

advocate of the Postal Service, the number of waivers made 

by the Postal Service under section 704(c). 

(2) TRANSMISSION.—The report under this subsection shall be 

transmitted— 

(A) to Congress; 

(B) to the head of the postal entity; 

(C) to the senior procurement executive of the entity; 

(D) in the case of the competition advocate of the Postal 

Service, to each member of the Postal Service Board of Governors; and 

(E) in the case of the competition advocate of the Postal 

Regulatory Commission, to each of the Commissioners of 

the Commission. 

§ 703. Delegation of contracting authority 

(a) IN GENERAL.— 

(1) POLICY.—Not later than 60 days after the date of enactment of this chapter, the head of each covered postal entity 

shall issue a policy on contracting officer delegations of authority for postal contracts for the covered postal entity. 

(2) CONTENTS.—The policy issued under paragraph (1) shall 

require that— 

(A) notwithstanding any delegation of authority with respect to postal contracts, the ultimate responsibility and accountability for the award and administration of postal 


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contracts resides with the senior procurement executive; 

and 

(B) a contracting officer shall maintain an awareness of 

and engagement in the activities being performed on postal 

contracts of which that officer has cognizance, notwithstanding any delegation of authority that may have been 

executed. 

(b) POSTING OF DELEGATIONS.— (1) IN GENERAL.—The head of each covered postal entity shall 

make any delegation of authority for postal contracts outside 

the functional contracting unit readily available and accessible 

on the website of the covered postal entity. 

(2) EFFECTIVE DATE.—This paragraph shall apply to any delegation of authority made on or after 30 days after the date of 

enactment of this chapter. 

§ 704. Posting of noncompetitive purchase requests for noncompetitive contracts 

(a) POSTING REQUIRED.— (1) POSTAL REGULATORY COMMISSION.—The Postal Regulatory Commission shall make the noncompetitive purchase request for any noncompetitive award for any contract (including 

any agreement or memorandum of understanding) entered into 

by the Postal Regulatory Commission for the procurement of 

goods and services, in an amount of $20,000 or more, including 

the rationale supporting the noncompetitive award, publicly 

available on the website of the Postal Regulatory Commission— 

(A) not later than 14 days after the date of the award of 

the noncompetitive contract; or 

(B) not later than 30 days after the date of the award of 

the noncompetitive contract, if the basis for the award was 

a compelling business interest. 

(2) POSTAL SERVICE.—The Postal Service shall make the noncompetitive purchase request for any noncompetitive award of a 

postal contract in an amount of $250,000 or more, including the 

rationale supporting the noncompetitive award, publicly available on the website of the Postal Service— 

(A) not later than 14 days after the date of the award; 

or 

(B) not later than 30 days after the date of the award, 

if the basis for the award was a compelling business interest. 

(3) ADJUSTMENTS TO THE POSTING THRESHOLD FOR THE POSTAL SERVICE.— 

(A) REVIEW AND DETERMINATION.—Not later than January 31 of each year, the Postal Service shall— 

(i) review the $250,000 threshold established under 

paragraph (2); and 

(ii) based on any change in the Consumer Price 

Index for all-urban consumers of the Department of 

Labor, determine whether an adjustment to the threshold shall be made. 

(B) AMOUNT OF ADJUSTMENTS.—An adjustment under 

subparagraph (A) shall be made in increments of $5,000. If 

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sumer Price Index for a year would require an adjustment 

in an amount that is less than $5,000, the Postal Service 

may not make an adjustment to the threshold for the year. 

(4) EFFECTIVE DATE.—This subsection shall apply to any noncompetitive contract awarded on or after the date that is 90 

days after the date of enactment of this chapter. 

(b) PUBLIC AVAILABILITY.— (1) IN GENERAL.—Subject to paragraph (2), the information 

required to be made publicly available by a covered postal entity under subsection (a) shall be readily accessible on the website 

of the covered postal entity. 

(2) PROTECTION OF PROPRIETARY INFORMATION.—A covered 

postal entity shall— 

(A) carefully screen any description of the rationale supporting a noncompetitive award required to be made publicly available under subsection (a) to determine whether 

the description includes proprietary data (including any 

reference or citation to the proprietary data) or security-related information; and 

(B) remove any proprietary data or security-related information before making publicly available a description of 

the rationale supporting a noncompetitive award. 

(c) WAIVERS.— (1) WAIVER PERMITTED.—If the Postal Service determines that 

making a noncompetitive purchase request for a postal contract 

of the Postal Service publicly available would risk placing the 

Postal Service at a competitive disadvantage relative to a private sector competitor, the senior procurement executive, in consultation with the advocate for competition of the Postal Service, may waive the requirements under subsection (a). 

(2) FORM AND CONTENT OF WAIVER.— (A) FORM.—A waiver under paragraph (1) shall be in the 

form of a written determination placed in the file of the 

contract to which the noncompetitive purchase agreement 

relates. 

(B) CONTENT.—A waiver under paragraph (1) shall include— 

(i) a description of the risk associated with making 

the noncompetitive purchase request publicly available; 

and 

(ii) a statement that redaction of sensitive information in the noncompetitive purchase request would not 

be sufficient to protect the Postal Service from being 

placed at a competitive disadvantage relative to a private sector competitor. 

(3) DELEGATION OF WAIVER AUTHORITY.—The Postal Service 

may not delegate the authority to approve a waiver under paragraph (1) to any employee having less authority than the senior 

procurement executive. 

§ 705. Review of ethical issues 

If a contracting officer identifies any ethical issues relating to a 

proposed contract and submits those issues and that proposed contract to the designated ethics official for the covered postal entity before the awarding of that contract, that ethics official shall— 


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(1) review the proposed contract; and 

(2) advise the contracting officer on the appropriate resolution 

of ethical issues. 

§ 706. Ethical restrictions on participation in certain contracting activity 

(a) DEFINITIONS.—In this section— 

(1) the term ‘‘covered employee’’ means— 

(A) a contracting officer; or 

(B) any employee of a covered postal entity whose decision making affects a postal contract as determined by regulations prescribed by the head of a covered postal entity; 

(2) the term ‘‘final conviction’’ means a conviction, whether 

entered on a verdict or plea, including a plea of nolo 

contendere, for which a sentence has been imposed; and 

(3) the term ‘‘covered relationship’’ means a covered relationship described in section 2635.502(b)(1) of title 5, Code of Federal Regulations, or any successor thereto. 

(b) IN GENERAL.— (1) REGULATIONS.—The head of each covered postal entity 

shall prescribe regulations that— 

(A) require a covered employee to include in the file of 

any noncompetitive purchase request for a noncompetitive 

postal contract a written certification that— 

(i) discloses any covered relationship of the covered 

employee; and 

(ii) states that the covered employee will not take any 

action with respect to the noncompetitive purchase request that affects the financial interests of a friend, relative, or person with whom the covered employee is affiliated in a nongovernmental capacity, or otherwise 

gives rise to an appearance of the use of public office 

for private gain, as described in section 2635.702 of 

title 5, Code of Federal Regulations, or any successor 

thereto; 

(B) require a contracting officer to consult with the ethics 

counsel for the covered postal entity regarding any disclosure made by a covered employee under subparagraph 

(A)(i), to determine whether participation by the covered 

employee in the noncompetitive purchase request would give 

rise to a violation of part 2635 of title 5, Code of Federal 

Regulations (commonly referred to as the Standards of Ethical Conduct for Employees of the Executive Branch), or 

any successor thereto; 

(C) require the ethics counsel for a covered postal entity 

to review any disclosure made by a contracting officer 

under subparagraph (A)(i) to determine whether participation by the contracting officer in the noncompetitive purchase request would give rise to a violation of part 2635 of 

title 5, Code of Federal Regulations (commonly referred to 

as the Standards of Ethical Conduct for Employees of the 

Executive Branch), or any successor thereto; 

(D) under subsections (d) and (e) of section 2635.502 of 

title 5, Code of Federal Regulations, or any successor thereto, require the ethics counsel for a covered postal entity to— 


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(i) authorize a covered employee that makes a disclosure under subparagraph (A)(i) to participate in the 

noncompetitive postal contract; or 

(ii) disqualify a covered employee that makes a disclosure under subparagraph (A)(i) from participating 

in the noncompetitive postal contract; 

(E) require a contractor to timely disclose to the contracting officer in a bid, solicitation, award, or performance 

of a postal contract any conflict of interest with a covered 

employee; and 

(F) include authority for the head of the covered postal 

entity to grant a waiver or otherwise mitigate any organizational or personal conflict of interest, if the head of the covered postal entity determines that the waiver or mitigation 

is in the best interests of the covered postal entity. 

(2) POSTING OF WAIVERS.—Not later than 30 days after the 

head of a covered postal entity grants a waiver described in 

paragraph (1)(F), the head of the covered postal entity shall 

make the waiver publicly available on the website of the covered 

postal entity. 

(c) CONTRACT VOIDANCE AND RECOVERY.— 

(1) UNLAWFUL CONDUCT.—In any case in which there is a 

final conviction for a violation of any provision of chapter 11 

of title 18 relating to a postal contract, the head of a covered 

postal entity may— 

(A) void that contract; and 

(B) recover the amounts expended and property transferred by the covered postal entity under that contract. 

(2) OBTAINING OR DISCLOSING PROCUREMENT INFORMATION.— 

(A) IN GENERAL.—In any case in which a contractor 

under a postal contract fails to timely disclose a conflict of 

interest to the appropriate contracting officer as required 

under the regulations promulgated under subsection 

(b)(1)(E), the head of a covered postal entity may— 

(i) void that contract; and 

(ii) recover the amounts expended and property 

transferred by the covered postal entity under that contract. 

(B) CONVICTION OR ADMINISTRATIVE DETERMINATION.—A 

case described under subparagraph (A) is any case in 

which— 

(i) there is a final conviction for an offense punishable under section 2105 of title 41; or 

(ii) the head of a covered postal entity determines, 

based upon a preponderance of the evidence, that the 

contractor or someone acting for the contractor has engaged in conduct constituting an offense punishable 

under section 2105 of such title. 

* * * * * * * 

PART II—PERSONNEL 

* * * * * * * 


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CHAPTER 10—EMPLOYMENT WITHIN THE POSTAL 

SERVICE 

* * * * * * * 

§ 1003. Employment policy 

(a) Except as provided under chapters 2 and 12 of this title, section 8G of the Inspector General Act of 1978, or other provision of 

law, the Postal Service shall classify and fix the compensation and 

benefits of all officers and employees in the Postal Service. It shall 

be the policy of the Postal Service to maintain total compensation 

and benefits for all officers and employees on a standard of comparability to the total compensation and benefits paid for comparable levels of work in the entire private sector of the economy. 

No officer or employee shall be paid compensation at a rate in excess of the rate for level I of the Executive Schedule under section 

5312 of title 5. 

* * * * * * * 

(e)(1) At least 1 month before the start of each fiscal year as described in paragraph (2), the Postmaster General shall transmit to 

the Postal Regulatory Commission certification (together with such 

supporting documentation as the Postal Regulatory Commission 

may require) that contributions of the Postal Service for such fiscal 

year will not exceed— 

(A) in the case of life insurance under chapter 87 of title 5, 

the Government contributions determined under section 8708 of 

such title; and 

(B) in the case of health insurance under chapter 89 of title 

5, the Government contributions determined under 8906 of such 

title. 

(2) This subsection applies with respect to— 

(A) except as provided in subparagraph (B), each fiscal year 

beginning after September 30, 2013; and 

(B) in the case of officers and employees of the Postal Service 

covered by a collective bargaining agreement which is in effect 

on the date of the enactment of this subsection— 

(i) each fiscal year beginning after the expiration date of 

such agreement, including 

(ii) for the fiscal year in which such expiration date occurs, any portion of such fiscal year remaining after such 

expiration date. 

(3)(A) If, after reasonable notice and opportunity for hearing is afforded to the Postal Service, the Postal Regulatory Commission 

finds that the contributions of the Postal Service for a fiscal year 

will exceed or are exceeding the limitation specified in subparagraph (A) or (B) of paragraph (1), the Commission shall order that 

the Postal Service take such action as the Commission considers 

necessary to achieve full and immediate compliance with the applicable limitation or limitations. 

(B) Sections 3663 and 3664 shall apply with respect to any order 

issued by the Postal Regulatory Commission under subparagraph 

(A). 

(C) Nothing in this paragraph shall be considered to permit the 

issuance of an order requiring reduction of contributions below the 


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level specified by the provision of law cited in subparagraph (A) or 

(B) of paragraph (1), as applicable. 

* * * * * * * 

§ 1005. Applicability of laws relating to Federal employees 

(a) * * * 

* * * * * * * 

ø(c) Officers and employees of the Postal Service shall be covered 

by subchapter I of chapter 81 of title 5, relating to compensation 

for work injuries.¿ 

(c)(1) For purposes of this subsection— 

(A) the term ‘‘postal employee’’ means an officer or employee 

of the Postal Service or the former Post Office Department; 

(B) the term ‘‘retirement age’’ has the meaning given such 

term under section 216(l)(1) of the Social Security Act; and 

(C) the term ‘‘appropriate committees of Congress’’ means— 

(i) the Committee on Oversight and Government Reform 

of the House of Representatives; and 

(ii) the Committee on Homeland Security and Governmental Affairs of the Senate. 

(2) The Postal Service shall design and administer a program for 

the payment of benefits for the disability or death of an individual 

resulting from personal injury sustained while in the performance 

of such individual’s duties as a postal employee. 

(3) The program under this subsection— 

(A) shall be designed by the Postal Service in consultation 

with appropriate employee representatives; 

(B) shall not provide for any amount payable to a disabled 

postal employee to be augmented on the basis of number of dependents; and 

(C) shall include provisions for automatic transition, upon attainment of retirement age, to benefits involving, coordinated 

with, or otherwise determined by reference to retirement benefits. 

* * * * * * * 

(f) Compensation, benefits, and other terms and conditions of employment in effect immediately prior to the effective date of this 

section, whether provided by statute or by rules and regulations of 

the former Post Office Department or the executive branch of the 

Government of the United States, shall continue to apply to officers 

and employees of the Postal Service, until changed by the Postal 

Service in accordance with this chapter and chapter 12 of this title. 

Subject to the provisions of this chapter and chapter 12 of this title, 

the provisions of subchapter I of chapter 85 and chapters 87, 89, 

89A, and 89B of title 5 shall apply to officers and employees of the 

Postal Service, unless varied, added to, or substituted for, under 

this subsection. øNo variation, addition, or substitution with respect to fringe benefits shall result in a program of fringe benefits 

which on the whole is less favorable to the officers and employees 

than fringe benefits in effect on the effective date of this section, 

and as to officers and employees for whom there is a collective-bargaining representative, no such variation, addition, or substitution 


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shall be made except by agreement between the collective-bargaining representative and the Postal Service.¿ 

* * * * * * * 

CHAPTER 12—EMPLOYEE-MANAGEMENT AGREEMENTS 

* * * * * * * 

§ 1206. Collective-bargaining agreements 

(a) * * * 

* * * * * * * 

(d) Collective-bargaining agreements between the Postal Service 

and bargaining representatives recognized under section 1203, ratified after the date of enactment of this subsection, shall contain no 

provision restricting the applicability of reduction-in-force procedures under title 5 with respect to members of the applicable bargaining unit. 

(e) Any collective-bargaining agreement between the Postal Service 

and the bargaining representatives recognized under section 1203 

ratified before the date of enactment of this Act that contain any 

provision violating subsection (d) shall be renegotiated with a new 

collective-bargaining agreement to be ratified or imposed through 

an arbitration decision under section 1207 within 9 months after 

such date of enactment. 

(f)(1) If a collective-bargaining agreement between the Postal 

Service and bargaining representatives recognized under section 

1203, ratified after the date of enactment of this subsection, includes 

reduction-in-force procedures which can be applied in lieu of reduction-in-force procedures under title 5, the Postal Service may, in its 

discretion, apply with respect to members of the applicable bargaining unit— 

(A) the alternative procedures (or, if 2 or more are agreed to, 

1 of the alternative procedures); or 

(B) the reduction-in-force procedures under title 5. 

(2) In no event may, if procedures for the resolution of a dispute 

or impasse arising in the negotiation of a collective-bargaining 

agreement (whether through binding arbitration or otherwise) are 

invoked under this chapter, the award or other resolution reached 

under such procedures provide for the elimination of, or the substitution of any alternative procedures in lieu of, reduction-in-force 

procedures under title 5. 

§ 1207. Labor disputes 

(a) * * * 

* * * * * * * 

ø(c)(1) If no agreement is reached within 60 days after the expiration or termination of the agreement or the date on which the 

agreement became subject to modification under subsection (a) of 

this section, or if the parties decide upon arbitration but do not 

agree upon the procedures therefore, an arbitration board shall be 

established consisting of 3 members, 1 of whom shall be selected 

by the Postal Service, 1 by the bargaining representative of the employees, and the third by the 2 thus selected. If either of the parties 

fails to select a member, or if the members chosen by the parties 


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fail to agree on the third person within 5 days after their first 

meeting, the selection shall be made from a list of names provided 

by the Director. This list shall consist of not less then 9 names of 

arbitrators of nationwide reputation and professional nature, who 

are also members of the National Academy of Arbitrators, and 

whom the Director has determined are available and willing to 

serve. 

ø(2) The arbitration board shall give the parties a full and fair 

hearing, including an opportunity to present evidence in support of 

their claims, and an opportunity to present their case in person, by 

counsel or by other representative as they may elect. Decisions of 

the arbitration board shall be conclusive and binding upon the parties. The arbitration board shall render its decision within 45 days 

after its appointment. 

ø(3) Costs of the arbitration board and mediation shall be shared 

equally by the Postal Service and the bargaining representative. 

ø(d) In the case of a bargaining unit whose recognized collectivebargaining representative does not have an agreement with the 

Postal Service, if the parties fail to reach the agreement within 90 

days after the commencement of collective bargaining, a mediator 

shall be appointed in accordance with the terms in subsection (b) 

of this section, unless the parties have previously agreed to another 

procedure for a binding resolution of their differences. If the parties 

fail to reach agreement within 180 days after the commencement 

of collective bargaining, and if they have not agreed to another procedure for binding resolution, an arbitration board shall be established to provide conclusive and binding arbitration in accordance 

with the terms of subsection (c) of this section.¿ 

(c)(1) If no agreement is reached within 30 days after the appointment of a mediator under subsection (b), or if the parties decide 

upon arbitration before the expiration of the 30-day period, an arbitration board shall be established consisting of 1 member selected 

by the Postal Service (from the list under paragraph (2)), 1 member 

selected by the bargaining representative of the employees (from the 

list under paragraph (2)), and the mediator appointed under subsection (b). 

(2) Upon receiving a request from either of the parties referred to 

in paragraph (1), the Director of the Federal Mediation and Conciliation Service shall provide a list of not less than 9 individuals who 

are well qualified to serve as neutral arbitrators. Each person listed 

shall be an arbitrator of nationwide reputation and professional nature, a member of the National Academy of Arbitrators, and an individual whom the Director has determined to be willing and available to serve. If, within 7 days after the list is provided, either of 

the parties has not selected an individual from the list, the Director 

shall make the selection within 3 days. 

(3) The arbitration board shall give the parties a full and fair 

hearing, including an opportunity to present evidence in support of 

their claims, and an opportunity to present their case in person, by 

counsel, or by other representative as they may elect. The hearing 

shall be concluded no more than 40 days after the arbitration board 

is established. 

(4) No more than 7 days after the hearing is concluded, each 

party shall submit to the arbitration board 2 offer packages, each 


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of which packages shall specify the terms of a proposed final agreement. 

(5) If no agreement is reached within 7 days after the last day 

date for the submission of an offer package under paragraph (4), 

each party shall submit to the arbitration board a single final offer 

package specifying the terms of a proposed final agreement. 

(6) No later than 3 days after the submission of the final offer 

packages under paragraph (5), the arbitration board shall select 1 

of those packages as its tentative award, subject to paragraph (7). 

(7)(A) The arbitration board may not select a final offer package 

under paragraph (6) unless it satisfies each of the following: 

(i) The offer complies with the requirements of sections 101(c) 

and 1003(a). 

(ii) The offer takes into account the current financial condition of the Postal Service. 

(iii) The offer takes into account the long-term financial condition of the Postal Service. 

(B)(i) If the board unanimously determines, based on clear and 

convincing evidence presented during the hearing under paragraph 

(3), that neither final offer package satisfies the conditions set forth 

in subparagraph (A), the board shall by majority vote— 

(I) select the package that best meets such conditions; and 

(II) modify the package so selected to the minimum extent 

necessary to satisfy such conditions. 

(ii) If modification (as described in subparagraph (B)(i)(II)) is necessary, the board shall have an additional 7 days to render its tentative award under this subparagraph. 

(8) The parties may negotiate a substitute award to replace the 

tentative award selected under paragraph (6) or rendered under 

paragraph (7) (as the case may be). If no agreement on a substitute 

award is reached within 10 days after the date on which the tentative award is so selected or rendered, the tentative award shall become final. 

(9) The arbitration board shall review any substitute award negotiated under paragraph (8) to determine if it satisfies the conditions 

set forth in paragraph (7)(A). If the arbitration board, by a unanimous vote taken within 3 days after the date on which the agreement on the substitute award is reached under paragraph (8), determines that the substitute award does not satisfy such conditions, the 

tentative award shall become final. In the absence of a vote, as described in the preceding sentence, the substitute agreement shall become final. 

(10) If, under paragraph (5), neither party submits a final offer 

package by the last day allowable under such paragraph, the arbitration board shall develop and issue a final award no later than 

20 days after such last day. 

(11) A final award or agreement under this subsection shall be 

conclusive and binding upon the parties. 

(12) Costs of the arbitration board and mediation shall be shared 

equally by the Postal Service and the bargaining representative. 

(d) In the case of a bargaining unit whose recognized collectivebargaining representative does not have an agreement with the 

Postal Service, if the parties fail to reach agreement within 90 days 

after the commencement of collective bargaining, a mediator shall 

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less the parties have previously agreed to another procedure for a 

binding resolution of their differences. If the parties fail to reach 

agreement within 180 days after the commencement of collective 

bargaining, an arbitration board shall be established to provide 

conclusive and binding arbitration in accordance with the provisions of subsection (c). 

* * * * * * * 

PART III—MODERNIZATION AND FISCAL 

ADMINISTRATION 

* * * * * * * 

CHAPTER 20—FINANCE 

* * * * * * * 

§ 2009. Annual budget 

The Postal Service shall cause to be prepared annually a budget 

program which shall be submitted to the Office of Management and 

Budget, under such rules and regulations as the President may establish as to the date of submission, the form and content, the classifications of data, and the manner in which such budget program 

shall be prepared and presented. The budget program shall be a 

business-type budget, or plan of operations, with due allowance 

given to the need for flexibility, including provision for emergencies 

and contingencies, in order that the Postal Service may properly 

carry out its activities as authorized by law. The budget program 

shall contain estimates of the financial condition and operations of 

the Postal Service for the current and ensuing fiscal years and the 

actual condition and results of operation for the last completed fiscal year. Such budget program shall include a statement of financial condition, a statement of income and expense, an analysis of 

surplus or deficit, a statement of sources and application of funds, 

and such other supplementary statements and information as are 

necessary or desirable to make known the financial condition and 

operations of the Postal Service. Such statements shall include estimates of operations by major types of activities, together with estimates of administrative expenses and estimates of borrowings. The 

budget program shall also include separate statements of the 

amounts which (1) the Postal Service requests to be appropriated 

under subsections (b) and (c) of section 2401, (2) the Office of Inspector General of the United States Postal Service requests to be 

appropriated, out of the Postal Service Fund, under section 8G(f) 

of the Inspector General Act of 1978ø, and (3)¿, (3) the Postal Regulatory Commission requests to be appropriated, out of the Postal 

Service Fund, under section 504(d) of this titleø.¿, and (4) the Postal Service Financial Responsibility and Management Assistance Authority requests to be appropriated, out of the Postal Service Fund, 

under section 206 of the Postal Reform Act of 2011. The President 

shall include these amounts, with his recommendations but without revision, in the budget transmitted to Congress under section 

1105 of title 31. 

* * * * * * * 


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§ 2011. Provisions relating to competitive products 

(a)(1) * * * 

(2) There is established in the Treasury of the United States a 

revolving fund, to be called the Postal Service Competitive Products Fund, which shall be available to the Postal Service without 

fiscal year limitation for the payment of— 

(A) costs attributable to competitive products; øand¿ 

(B) all other costs incurred by the Postal Service, to the extent allocable to competitive productsø.¿; and 

(C) vouchers under the program described in section 214(f)(1) 

of the Postal Reform Act of 2011. 

* * * * * * * 

CHAPTER 24—APPROPRIATIONS AND ANNUAL REPORT 

* * * * * * * 

§ 2401. Appropriations 

(a) * * * 

ø(b)(1) As reimbursement to the Postal Service for public service 

costs incurred by it in providing a maximum degree of effective and 

regular postal service nationwide, in communities where post offices may not be deemed self-sustaining, as elsewhere, there are 

authorized to be appropriated to the Postal Service the following 

amounts: 

ø(A) for each of the fiscal years 1972 through 1979, an 

amount equal to 10 percent of the sum appropriated to the 

former Post Office Department by Act of Congress for its use 

in fiscal year 1971; 

ø(B) for fiscal year 1980, an amount equal to 9 percent of 

such sum for fiscal year 1971; 

ø(C) for fiscal year 1981, $486,000,000; 

ø(D) for fiscal year 1982, $250,000,000; 

ø(E) for fiscal year 1983, $100,000,000; 

ø(F) for fiscal year 1984, no funds are authorized to be appropriated; and 

ø(G) except as provided in paragraph (2) of this subsection, 

for each fiscal year thereafter an amount equal to 5 percent of 

such sum for fiscal year 1971. 

ø(2) After fiscal year 1984, the Postal Service may reduce the 

percentage figure in paragraph (1)(G) of this subsection, including 

a reduction to 0, if the Postal Service finds that the amounts determined under such paragraph are no longer required to operate the 

Postal Service in accordance with the policies of this title. 

ø(c) There are authorized to be appropriated to the Postal Service 

each year a sum determined by the Postal Service to be equal to 

the difference between the revenues the Postal Service would have 

received if sections 3217 and 3403 through 3406 had not been enacted and the estimated revenues to be received on mail carried 

under such sections. In requesting an appropriation under this subsection for a fiscal year, the Postal Service shall include an amount 

to reconcile sums authorized to be appropriated for prior fiscal 

years on the basis of estimated mail volume. 

ø(d) As reimbursement to the Postal Service for losses which it 

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tion 2401(c) for fiscal years 1991 through 1993, and to compensate 

for the additional revenues it is estimated the Postal Service would 

have received under the provisions of section 3626(a) (as last in effect before enactment of the Postal Accountability and Enhancement Act), for the period beginning on October 1, 1993, and ending 

on September 30, 1998, if the fraction specified in subclause (VI) 

of section 3626(a)(3)(B)(ii) (as last in effect before enactment of the 

Postal Accountability and Enhancement Act) were applied with respect to such period (instead of the respective fractions specified in 

subclauses (I) through (V) thereof), there are authorized to be appropriated to the Postal Service $29,000,000 for each of fiscal years 

1994 through 2035.¿ 

* * * * * * * 

PART IV—MAIL MATTER 

* * * * * * * 

CHAPTER 36—POSTAL RATES, CLASSES, AND SERVICES 

SUBCHAPTER I—PROVISIONS RELATING TO MARKETDOMINANT PRODUCTS 

* * * * * * * 

§ 3622. Modern rate regulation 

(a) * * * 

* * * * * * * 

(c) FACTORS.—In establishing or revising such system, the Postal 

Regulatory Commission shall take into account— 

(1) * * * 

* * * * * * * 

(10) the desirability of special classifications for both postal 

users and the Postal Service in accordance with the policies of 

this title, including agreements between the Postal Service and 

postal users, when available on public and reasonable terms to 

similarly situated mailers, that— 

ø(A) either— 

ø(i) improve the net financial position of the Postal 

Service through reducing Postal Service costs or increasing the overall contribution to the institutional 

costs of the Postal Service; or 

ø(ii) enhance the performance of mail preparation, 

processing, transportation, or other functions; and¿ 

(A) improve the net financial position of the Postal Service through reducing Postal Service costs or increasing the 

overall contribution to the institutional costs of the Postal 

Service; and 

* * * * * * * 

(d) REQUIREMENTS.— 

(1) IN GENERAL.—The system for regulating rates and classes 

for market-dominant products shall— 

(A) * * * 


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(B) subject to the limitation under subparagraph (A), establish postal rates to fulfill the requirement that each 

market-dominant class, product, and type of mail service 

(except for an experimental product or service) bear the direct and indirect postal costs attributable to such class, 

product, or type through reliably identified causal relationships plus that portion of all other costs of the Postal Service reasonably assignable to such class, product, or type; 

(C) establish postal rates for each group of functionally 

equivalent agreements between the Postal Service and users 

of the mail that— 

(i) cover attributable cost; and 

(ii) improve the net financial position of the Postal 

Service; 

for purposes of this subparagraph, a group of functionally 

equivalent agreements shall consist of all service agreements that are functionally equivalent to each other within 

the same market-dominant product, but shall not include 

agreements within an experimental product; 

ø(B)¿ (D) establish a schedule whereby rates, when necessary and appropriate, would change at regular intervals 

by predictable amounts; 

ø(C)¿ (E) not later than 45 days before the implementation of any adjustment in rates under this section, including adjustments made under subsection (c)(10)— 

(i) * * * 

* * * * * * * 

ø(D)¿ (F) establish procedures whereby the Postal Service may adjust rates not in excess of the annual limitations 

under subparagraph (A); and 

ø(E)¿ (G) notwithstanding any limitation set under subparagraphs (A) and (C), and provided there is not sufficient unused rate authority under paragraph (2)(C), establish procedures whereby rates may be adjusted on an expedited basis due to either extraordinary or exceptional circumstances, provided that the Commission determines, 

after notice and opportunity for a public hearing and comment, and within 90 days after any request by the Postal 

Service, that such adjustment is reasonable and equitable 

and necessary to enable the Postal Service, under best 

practices of honest, efficient, and economical management, 

to maintain and continue the development of postal services of the kind and quality adapted to the needs of the 

United States. 

* * * * * * * 

(4) PRC STUDY.— 

(A) IN GENERAL.—Within 90 days after the end of the 

first fiscal year beginning after the date of enactment of the 

Postal Reform Act of 2011, the Postal Regulatory Commission shall complete a study to determine the quantitative 

impact of the Postal Service’s excess capacity on the direct 

and indirect postal costs attributable to any class that 

bears less than 100 percent of its costs attributable (as described in paragraph (1)(B)), according to the most recent 


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annual determination of the Postal Regulatory Commission 

under section 3653. 

(B) REQUIREMENTS.—The study required under subparagraph (A) shall— 

(i) be conducted pursuant to regulations that the 

Postal Regulatory Commission shall prescribe within 

90 days after the date of enactment of the Postal Reform Act of 2011, taking into account existing regulations for proceedings to improve the quality, accuracy, 

or completeness of ratemaking information under section 3652(e)(2) in effect on such date; and 

(ii) for any year in which any class of mail bears less 

than 100 percent of its costs attributable (as described 

in paragraph (1)(B)), be updated annually by the Postal Service and included in its annual report to the 

Commission under section 3652, using such methodologies as the Commission shall by regulation prescribe. 

(5) ADDITIONAL RATES.—Starting not earlier than 12 months 

and not later than 18 months after the date on which the first 

study described in paragraph (4) is completed, and at least once 

in each subsequent 12-month period, the Postal Service shall establish postal rates for each loss-making class of mail to eliminate such losses (other than those caused by the Postal Service’s 

excess capacity) by exhausting all unused rate authority as well 

as maximizing incentives to reduce costs and increase efficiency, 

subject to the following: 

(A) The term ‘‘loss-making’’, as used in this paragraph 

with respect to a class of mail, means a class of mail that 

bears less than 100 percent of its costs attributable (as described in paragraph (1)(B)), according to the most recent 

annual determination of the Postal Regulatory Commission 

under section 3653, adjusted to account for the quantitative 

effect of excess capacity on the costs attributable of the class 

(as described in paragraph (1)(C)). 

(B) Unused rate authority shall be annually increased by 

2 percent for each class of mail that bears less than 90 percent of its costs attributable (as described in paragraph 

(1)(B)), according to the most recent annual determination 

of the Postal Regulatory Commission under section 3653, 

adjusted to account for the quantitative effect of excess capacity on the costs attributable of the class (as described in 

paragraph (1)(C)), with such increase in unused rate authority to take effect 30 days after the date that the Commission issues such determination. 

(6) EXCEPTION.—The requirements of paragraph (1)(B) shall 

not apply to a market-dominant product for which a substantial portion of the product’s mail volume consists of inbound 

international mail with terminal dues rates determined by the 

Universal Postal Union (and not by bilateral agreements or 

other arrangements). 

* * * * * * * 


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§ 3626. Reduced rates 

(a)(1) * * * 

* * * * * * * 

(5) The rates for any advertising under former section 4358(f) of 

this title shall be equal to 75 percent of the rates for advertising 

contained in the most closely corresponding regular-rate category of 

mail. Notwithstanding any other provision of this paragraph, the 

percentage specified in the preceding sentence shall be increased by 

an additional 2 percentage points as of the first day of each calendar year beginning at least 3 years after the date of the enactment 

of the Postal Reform Act of 2011, until such percentage reaches 80 

percent. 

(6) The rates for mail matter under former sections 4452 (b) and 

(c) of this title shall be established as follows: 

(A) * * * 

* * * * * * * 

(C) Rate differentials within each subclass of mail matter 

under former sections 4452 (b) and (c) shall reflect the policies 

of this title, including the factors set forth in section 3622(b) 

of this title. 

Notwithstanding any other provision of this paragraph, the percentage specified in subparagraph (A) shall be increased by an 

additional 2 percentage points as of the first day of each calendar year beginning at least 3 years after the date of the enactment of the Postal Reform Act of 2011, until such percentage 

reaches 80 percent. 

* * * * * * * 

ø(e)(1) In the administration of this section, the rates for thirdclass mail matter mailed by a qualified political committee shall be 

the rates currently in effect under former section 4452 of this title 

for third-class mail matter mailed by a qualified nonprofit organization. 

ø(2) For purposes of this subsection— 

ø(A) the term ‘‘qualified political committee’’ means a national or State committee of a political party, the Republican 

and Democratic Senatorial Campaign Committees, the Democratic National Congressional Committee, and the National Republican Congressional Committee; 

ø(B) the term ‘‘national committee’’ means the organization 

which, by virtue of the bylaws of a political party, is responsible for the day-to-day operation of such political party at the 

national level; and 

ø(C) the term ‘‘State committee’’ means the organization 

which, by virtue of the bylaws of a political party, is responsible for the day-to-day operation of such political party at the 

State level.¿ 

* * * * * * * 

SUBCHAPTER II—PROVISIONS RELATING TO COMPETITIVE 

PRODUCTS 

* * * * * * * 


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§ 3632. Action of the Governors 

(a) * * * 

(b) PROCEDURES.— 

(1) * * * 

* * * * * * * 

(4) RATES FOR STREAMLINED REVIEW.—In the case of rates not 

of general applicability for competitive products that the Postmaster General considers eligible for streamlined review under 

section 3633(c), the Postmaster General shall cause each agreement to be filed with the Postal Regulatory Commission by such 

date, on or before the effective date of any new rate, as the Postmaster General considered appropriate. 

ø(4)¿ (5) CRITERIA.—As part of the regulations required 

under section 3633, the Postal Regulatory Commission shall 

establish criteria for determining when a rate or class established under this subchapter is or is not of general applicability 

in the Nation as a whole or in any substantial region of the 

Nation. 

* * * * * * * 

§ 3633. Provisions applicable to rates for competitive products 

(a) * * * 

* * * * * * * 

(c) STREAMLINED REVIEW.—Within 90 days after the date of the 

enactment of this subsection, after notice and opportunity for public 

comment, the Postal Regulatory Commission shall promulgate (and 

may from time to time thereafter revise) regulations for streamlined 

after-the-fact review of new agreements between the Postal Service 

and users of the mail that provide rates not of general applicability 

for competitive products, and are functionally equivalent to existing 

agreements that have collectively covered attributable costs and collectively improved the net financial position of the Postal Service. 

Streamlined review will be concluded within 5 working days after 

the agreement is filed with the Commission and shall be limited to 

approval or disapproval of the agreement as a whole based on the 

Commission’s determination of its functional equivalence. Agreements not approved may be resubmitted without prejudice under 

section 3632(b)(3). 

* * * * * * * 

SUBCHAPTER IV—REPORTING REQUIREMENTS AND 

RELATED PROVISIONS 

§ 3651. Annual reports by the Commission 

(a) * * * 

(b) ADDITIONAL INFORMATION.— 

(1) * * * 

(2) ALASKA BYPASS MAIL COSTS.—In addition to the information required under subsection (a), each report under this section shall also include, with respect to the period covered by 

such report, an estimate of the costs incurred by the Postal 


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Service in providing Alaska bypass mail service under section 

5402. 

ø(2)¿ (3) BASIS FOR ESTIMATES.—The Commission shall detail 

the basis for its estimates and the statutory requirements giving rise to the costs identified in each report under this section. 

* * * * * * * 

§ 3652. Annual reports to the Commission 

(a) COSTS, REVENUES, RATES, AND SERVICE.—Except as provided 

in subsection (c), the Postal Service shall, no later than 90 days 

after the end of each year, prepare and submit to the Postal Regulatory Commission a report (together with such nonpublic annex to 

the report as the Commission may require under subsection (e))— 

(1) which shall analyze costs, revenues, rates, and quality of 

service, using such methodologies as the Commission shall by 

regulation prescribe, and in sufficient detail to demonstrate 

that all products during such year complied with all applicable 

requirements of this title; øand¿ 

(2) which shall, for each market-dominant product provided 

in such year, provide— 

(A) * * * 

(B) measures of the quality of service afforded by the 

Postal Service in connection with such product, including— 

(i) * * * 

(ii) the degree of customer satisfaction with the service providedø.¿; and 

(3) which shall provide the overall change in Postal Service 

productivity and the resulting effect of such change on overall 

Postal Service costs during such year, using such methodologies 

as the Commission shall by regulation prescribe. 

The Inspector General shall regularly audit the data collection systems and procedures utilized in collecting information and preparing such report (including any annex thereto and the information required under subsection (b)). The results of any such audit 

shall be submitted to the Postal Service and the Postal Regulatory 

Commission. 

* * * * * * * 

§ 3653. Annual determination of compliance 

(a) * * * 

* * * * * * * 

(c) Each annual written determination of the Commission under 

section 3653 shall include the following written determinations: 

(1) Whether each product covered its costs, and if it did not, 

the determination shall state that such product is in noncompliance under section 3653(c). 

(2) For each group of functionally equivalent agreements between the Postal Service and users of the mail, whether it fulfilled requirements to— 

(A) cover attributable costs; and 

(B) improve the net financial position of the Postal Service. 


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(3) Any group of functionally equivalent agreements (as referred to in subparagraph (B)) not meeting subparagraphs (A) 

and (B) of paragraph (2) shall be determined to be in noncompliance under this subsection. 

(4) For purposes of this subsection, a group of functionally 

equivalent agreements (as referred to in paragraph (2)) shall 

consist of all service agreements that are functionally equivalent 

to each other within the same market-dominant or competitive 

product, but shall not include agreements within an experimental product. 

ø(c)¿ (d) NONCOMPLIANCE WITH REGARD TO RATES OR SERV- ICES.—If, for a year, a timely written determination of noncompliance is made under subsection (b), the Postal Regulatory Commission shall take appropriate action in accordance with subsections 

(c) and (e) of section 3662 (as if a complaint averring such noncompliance had been duly filed and found under such section to be 

justified). 

ø(d)¿ (e) REVIEW OF PERFORMANCE GOALS.—The Postal Regulatory Commission shall also evaluate annually whether the Postal 

Service has met the goals established under sections 2803 and 

2804, and may provide recommendations to the Postal Service related to the protection or promotion of public policy objectives set 

out in this title. 

ø(e)¿ (f) REBUTTABLE PRESUMPTION.—A timely written determination described in the last sentence of subsection (b) shall, for 

purposes of any proceeding under section 3662, create a rebuttable 

presumption of compliance by the Postal Service (with regard to 

the matters described under paragraphs (1) and (2) of subsection 

(b)) during the year to which such determination relates. 

* * * * * * * 

SUBCHAPTER V—POSTAL SERVICES, COMPLAINTS, AND 

JUDICIAL REVIEW 

§ 3661. Postal services 

(a) * * * 

* * * * * * * 

(d)(1) The Commission shall issue its opinion within 90 days after 

the receipt of any proposal (as referred to in subsection (b)) concerning— 

(A) the closing or consolidation of postal retail facilities (as 

that term is defined in section 102(2) of the Postal Reform Act 

of 2011) to a degree that will generally affect service on a nationwide or substantially nationwide basis; or 

(B) an identical or substantially identical proposal on which 

the Commission issued an opinion within the preceding 5 years. 

(2) If necessary in order to comply with the 90-day requirement 

under paragraph (1), the Commission may apply expedited procedures which the Commission shall by regulation prescribe. 

* * * * * * * 

CHAPTER 37—NONPOSTAL SERVICES 

Sec 


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3701. Purpose 

3702. Definitions 

3703. Postal Service advertising program 

3704. Postal Service program for State governments 

3705. Postal Service program for other government agencies 

3706. Transparency and accountability for nonpostal services 

§ 3701. Purpose 

This chapter is intended to enable the Postal Service to increase 

its net revenues through specific nonpostal products and services 

that are expressly authorized by this chapter. Postal Service revenues and expenses under this chapter shall be funded through the 

Postal Service Fund. 

§ 3702. Definitions 

As used in this chapter— 

(1) the term ‘‘nonpostal services’’ is limited to services offered 

by the Postal Service that are expressly authorized by this chapter and are not postal products or services; 

(2) the term ‘‘Postal Service advertising program’’ means a 

program, managed by the Postal Service, by which the Postal 

Service receives revenues from entities which advertise at Postal 

Service facilities and on Postal Service vehicles; 

(3) the term ‘‘Postal Service program for State governments’’ 

means a program, managed by the Postal Service, by which the 

Postal Service receives revenue from State governments (including their agencies) for providing services on their behalf at Postal Service facilities; 

(4) the term ‘‘attributable costs’’ has the same meaning as is 

given such term in section 3631; and 

(5) the term ‘‘year’’ means a fiscal year. 

§ 3703. Postal Service advertising program 

Notwithstanding any other provision of this title, the Postal Service may establish and manage a program that allows entities to advertise at Postal Service facilities and on Postal Service vehicles. 

Such a program shall be subject to the following requirements: 

(1) The Postal Service shall at all times ensure advertising it 

permits is consistent with the integrity of the Postal Service. 

(2) Any advertising program is required to cover a minimum 

of 200 percent of its attributable costs in each year. 

(3) All advertising expenditures and revenues are subject to 

annual compliance determination (including remedies for noncompliance) applicable to nonpostal products. 

(4) Total advertising expenditures and revenues must be disclosed in Postal Service annual reports. 

§ 3704. Postal Service program for State governments 

(a) IN GENERAL.—Notwithstanding any other provision of this 

title, the Postal Service may establish a program to provide services 

for agencies of State governments within the United States, but only 

if such services— 

(1) shall provide enhanced value to the public, such as by 

lowering the cost or raising the quality of such services or by 

making such services more accessible; 


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(2) do not interfere with or detract from the value of postal 

services, including— 

(A) the cost and efficiency of postal services; and 

(B) access to postal retail service, such as customer waiting time and access to parking; and 

(3) provide a reasonable contribution to the institutional costs 

of the Postal Service, defined as reimbursement for each service 

and to each agency covering at least 150 percent of the attributable costs of such service in each year. 

(b) PUBLIC NOTICE.—At least 90 days before offering any services 

under this section, the Postal Service shall make each agreement 

with State agencies readily available to the public on its website, including a business plan that describes the specific services to be provided, the enhanced value to the public, terms of reimbursement, the 

estimated annual reimbursement to the Postal Service, and the estimated percentage of attributable Postal Service costs that will be 

covered by reimbursement (with documentation to support these estimates). The Postal Service shall solicit public comment for at least 

30 days, with comments posted on its website, followed by its written response posted on its website at least 30 days before offering 

such services. 

(c) APPROVAL REQUIRED.—The Governors of the Postal Service 

shall approve the provision of services under this section by a recorded vote, with at least 2⁄3 of its membership voting for approval, 

with the vote publicly disclosed on the Postal Service website. 

(d) CLASSIFICATION OF SERVICES.—All services for a given agency 

provided under this section shall be classified as a separate activity 

subject to the requirements of annual reporting under section 3706. 

Such reporting shall also include information on the quality of service and related information to demonstrate that it satisfied the requirements of subsection (a). Information provided under this section shall be according to requirements that the Postal Regulatory 

Commission shall by regulation prescribe. 

(e) DEFINITIONS.—For the purpose of this section— 

(1) the term ‘‘State’’ includes the District of Columbia, the 

Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the 

Northern Mariana Islands, and any other territory or possession of the United States; and 

(2) the term ‘‘United States’’, when used in a geographical 

sense, means the States. 

§ 3705. Postal Service program for other government agencies 

(a) IN GENERAL.—The Postal Service may establish a program to 

provide property and services for other government agencies within 

the meaning of section 411, but only if such program provides a reasonable contribution to the institutional costs of the Postal Service, 

defined as reimbursement by each agency that covers at least 100 

percent of the attributable costs of all property and service provided 

by the Postal Service in a each year to such agency. 

(b) CLASSIFICATION OF SERVICES.—For each agency, all property 

and services provided by the Postal Service under this section shall 

be classified as a separate activity subject to the requirements of annual reporting under section 3706. Information provided under this 


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section shall be according to requirements that the Postal Regulatory Commission shall by regulation prescribe. 

§ 3706. Transparency and accountability for nonpostal services 

(a) ANNUAL REPORTS TO THE COMMISSION.— 

(1) IN GENERAL.—The Postal Service shall, no later than 90 

days after the end of each year, prepare and submit to the Postal Regulatory Commission a report (together with such nonpublic annex to the report as the Commission may require 

under subsection (b)) which shall analyze costs, revenues, rates, 

and quality of service for this chapter, using such methodologies as the Commission shall by regulation prescribe, and in 

sufficient detail to demonstrate compliance with all applicable 

requirements of this chapter. 

(2) AUDITS.—The Inspector General shall regularly audit the 

data collection systems and procedures utilized in collecting information and preparing such report. The results of any such 

audit shall be submitted to the Postal Service and the Postal 

Regulatory Commission. 

(b) SUPPORTING MATTER.—The Postal Regulatory Commission 

shall have access, in accordance with such regulations as the Commission shall prescribe, to the working papers and any other supporting matter of the Postal Service and the Inspector General in 

connection with any information submitted under this section. 

(c) CONTENT AND FORM OF REPORTS.— 

(1) IN GENERAL.—The Postal Regulatory Commission shall, 

by regulation, prescribe the content and form of the public reports (and any nonpublic annex and supporting matter relating 

to the report) to be provided by the Postal Service under this 

section. Such reports shall be included with the annual compliance determination reported under section 3653. In carrying out 

this subsection, the Commission shall give due consideration 

to— 

(A) providing the public with timely, adequate information to assess compliance; 

(B) avoiding unnecessary or unwarranted administrative 

effort and expense on the part of the Postal Service; and 

(C) protecting the confidentiality of information that is 

commercially sensitive or is exempt from public disclosure 

under section 552(b) of title 5. 

(2) REVISED REQUIREMENTS.—The Commission may, on its 

own motion or on request of any interested party, initiate proceedings (to be conducted in accordance with regulations that 

the Commission shall prescribe) to improve the quality, accuracy, or completeness of Postal Service data required by the 

Commission under this subsection whenever it shall appear 

that— 

(A) the attribution of costs or revenues to property or 

services under this chapter has become significantly inaccurate or can be significantly improved; 

(B) the quality of service data provided to the Commission for annual reports under this chapter has become significantly inaccurate or can be significantly improved; or 


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(C) such revisions are, in the judgment of the Commission, otherwise necessitated by the public interest. 

(d) CONFIDENTIAL INFORMATION.— (1) IN GENERAL.—If the Postal Service determines that any 

document or portion of a document, or other matter, which it 

provides to the Postal Regulatory Commission in a nonpublic 

annex under this section contains information which is described in section 410(c) of this title, or exempt from public disclosure under section 552(b) of title 5, the Postal Service shall, 

at the time of providing such matter to the Commission, notify 

the Commission of its determination, in writing, and describe 

with particularity the documents (or portions of documents) or 

other matter for which confidentiality is sought and the reasons 

therefor. 

(2) TREATMENT.—Any information or other matter described 

in paragraph (1) to which the Commission gains access under 

this section shall be subject to paragraphs (2) and (3) of section 

504(g) in the same way as if the Commission had received notification with respect to such matter under section 504(g)(1). 

(e) ANNUAL COMPLIANCE DETERMINATION.— (1) OPPORTUNITY FOR PUBLIC COMMENT.—After receiving the 

reports required under subsection (a) for any year, the Postal 

Regulatory Commission shall promptly provide an opportunity 

for comment on such reports by any interested party, and an officer of the Commission who shall be required to represent the 

interests of the general public. 

(2) DETERMINATION OF COMPLIANCE OR NONCOMPLIANCE.— Not later than 90 days after receiving the submissions required 

under subsection (a) with respect to a year, the Postal Regulatory Commission shall make a written determination as to 

whether any nonpostal activities during such year were or were 

not in compliance with applicable provisions of this chapter (or 

regulations promulgated under this chapter). The Postal Regulatory Commission shall issue a determination of noncompliance if the requirements for coverage of attributable costs are 

not met. If, with respect to a year, no instance of noncompliance 

is found to have occurred in such year, the written determination shall be to that effect. 

(3) NONCOMPLIANCE.—If, for a year, a timely written determination of noncompliance is made under this chapter, the 

Postal Regulatory Commission shall take appropriate action. If 

the requirements for coverage of attributable costs specified by 

this chapter are not met, the Commission shall, within 60 days 

after the determination, prescribe remedial action to restore 

compliance as soon as practicable, which shall also include the 

full restoration of revenue shortfalls during the following fiscal 

year. The Commission may order the Postal Service to discontinue a nonpostal service under section 3703 or 3704 that 

persistently fails to meet cost coverage requirements. 

(4) ANY DELIBERATE NONCOMPLIANCE.—In addition, in cases 

of deliberate noncompliance by the Postal Service with the requirements of this chapter, the Postal Regulatory Commission 

may order, based on the nature, circumstances, extent, and seriousness of the noncompliance, a fine (in the amount specified 

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compliance. All receipts from fines imposed under this subsection shall be deposited in the general fund of the Treasury 

of the United States. 

* * * * * * * 

PART V—TRANSPORTATION OF MAIL 

* * * * * * * 

CHAPTER 54—TRANSPORTATION OF MAIL BY AIR 

Sec. 

5401. Authorization. 

* * * * * * * 

5404. Reimbursement of Alaska bypass mail costs. 

* * * * * * * 

§ 5404. Reimbursement of Alaska bypass mail costs 

(a) IN GENERAL.—The State of Alaska, on an annual basis, shall 

make a payment to the Postal Service to reimburse the Postal Service for its costs in providing Alaska bypass mail service under section 5402 of this title. 

(b) DATE OF FIRST PAYMENT.—The State of Alaska shall make its 

first payment under subsection (a) on or before the last day of the 

first fiscal year of the State of Alaska beginning after the date of 

enactment of this section. 

(c) PAYMENT AMOUNTS.— 

(1) DETERMINATION OF AMOUNTS.—The amount of a payment 

under subsection (a) shall be determined based on the most recent cost estimate prepared by the Postal Regulatory Commission under section 3651(b)(2) of this title (in this subsection referred to as the ‘‘cost estimate’’). 

(2) FIRST PAYMENT.—The first payment under subsection (a) 

shall be in an amount equal to 20 percent of the cost estimate. 

(3) SUBSEQUENT PAYMENTS.—Each subsequent payment 

under subsection (a) shall be in an amount equal to a percentage of the cost estimate determined by adding 20 percent to the 

percentage due in the prior year, except that no payment shall 

exceed 100 percent of the cost estimate. 

(d) NOTICE OF PAYMENT AMOUNTS.—Not later than 30 days after 

the date of issuance of a cost estimate by the Postal Regulatory 

Commission under section 3651(b)(2) of this title, the Postal Service 

shall furnish the State of Alaska with written notice of the amount 

of the next payment due under subsection (a). 

(e) DEPOSIT OF PAYMENTS.—Not later than the last day of the fiscal year of the State of Alaska in which notice of a payment is provided under subsection (d)— 

(1) the State of Alaska shall transmit the payment to the 

Postal Service; and 

(2) the Postal Service shall deposit the payment in the Postal 

Service Fund. 

TITLE 5, UNITED STATES CODE 

* * * * * * * 


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PART III—EMPLOYEES 

* * * * * * * 

SUBPART G—INSURANCE AND ANNUITIES 

* * * * * * * 

CHAPTER 89—HEALTH INSURANCE 

* * * * * * * 

§ 8909a. Postal Service Retiree Health øBenefit¿ Benefits 

Fund 

(a) * * * 

* * * * * * * 

(d)(1) * * * 

* * * * * * * 

(3)(A) The United States Postal Service shall pay into such 

Fund— 

(i) * * * 

* * * * * * * 

(v) ø$5,500,000,000¿ $1,000,000,000, not later than September 30, 2011; 

* * * * * * * 

(ix) ø$5,700,000,000¿ $7,950,000,000, not later than September 30, 2015; and 

(x) ø$5,800,000,000¿ $8,050,000,000, not later than September 30, 2016. 

* * * * * * * 

TITLE 41, UNITED STATES CODE 

* * * * * * * 

SUBTITLE III—CONTRACT DISPUTES 

* * * * * * * 

CHAPTER 71—CONTRACT DISPUTES 

§ 7101. Definitions 

In this chapter: 

(1) * * * 

* * * * * * * 

(8) EXECUTIVE AGENCY.—The term ‘‘executive agency’’ 

means— 

(A) * * * 

* * * * * * * 


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(C) an independent establishment as defined in section 

104 of title 5, except that the term does not include the 

Government Accountability Office; øand¿ 

(D) a wholly owned Government corporation as defined 

in section 9101(3) of title 31ø.¿; and 

(E) the United States Postal Service and the Postal Regulatory Commission. 

* * * * * * * 


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MINORITY VIEWS ON H.R. 2309, THE POSTAL REFORM ACT 

We respectfully but strongly oppose H.R. 2309, the Postal Reform 

Act, as ordered reported by the Committee on October 13, 2011. 

The United States Postal Service stands at the center of a trillion 

dollar commercial industry that is responsible for 8.3 million Americans jobs. The Postal Service alone employs more than 500,000 

Americans, including nearly 125,000 veterans, who process and distribute approximately 40% of the world’s mail volume. In fiscal 

year 2011, the Postal Service delivered mail to more than 150 million households and businesses six days a week and generated approximately $66 billion in revenue. 

Over the past five years, however, total mail volume has declined 

significantly, dropping from 213 billion pieces in 2006 to 168 billion 

pieces in 2011. First-class mail volume, which is the most profitable class of mail, continues to decline as customers opt for other 

forms of communication, such as e-mail, mobile telephone service, 

and internet-based social networking. According to the Postal Service, first class mail has dropped from approximately 100 billion 

pieces in 2006 to under 74 billion pieces in 2011. 

Compounding this problem, the Postal Service is required to 

prefund, at an accelerated and inflexible rate, retiree health care 

benefits. This burdensome requirement is not imposed upon any 

other federal government agency or private sector entity and has 

caused a severe strain on the Postal Service’s finances. 

In addition, the Postal Service’s viability is also hampered by 

various operational restrictions, as well as a cumbersome governance structure. 

As a result of these factors, the Postal Service faces significant 

financial challenges. For instance, between fiscal years 2007 and 

2011, the Postal Service reported a net loss of over $25 billion. The 

Postal Service has taken on $13 billion in debt over the past five 

years in order to keep pace with shrinking revenue and rising 

costs. The Postal Service reports that, under its current liquidity 

situation, it has only 10 to 15 days’ worth of cash on hand to meet 

operating expenses. These margins that are expected to continue to 

decline going forward absent Congressional action. 

Faced with these challenges, the Postal Service has taken a number of actions to reduce its costs. For example, the Postal Service 

has reduced the size of its workforce by more than 100,000 employees over the past four years. It has also worked with its largest employee labor union to reach a new collective bargaining agreement 

that will save approximately $3.8 billion over the next four and a 

half years. It has also increased mailing service prices to the fullest 

extent possible under the Congressionally mandated Consumer 

Price Index cap. 

Despite these reforms, the Postal Service continues to struggle to 

keep pace with a shrinking marketplace. It is clear that the Postal 


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Service must continue to right-size its workforce, realign its network of facilities, and reorient its operations to meet the demands 

of the 21st Century economy. This treasured institution must reform its operations in a way that will enable it to continue to bind 

our nation together while enabling it to function as a self-sustaining business entity. The Postal Service must adapt in order to 

survive. 

Congress should assist the Postal Service in pursuing these goals 

through comprehensive and bipartisan postal reform legislation. 

Congress must provide the Postal Service with the tools necessary 

to reduce its workforce in a sensible and compassionate way, adjust 

its network of retail and mail processing facilities, and pursue new 

lines of business that meet consumers’ changing needs. 

Unfortunately, H.R. 2309 fails to achieve these goals. It employs 

a heavy-handed and authoritarian approach to the effort to return 

the Postal Service to financial solvency. It also contains a series of 

unfunded intergovernmental and private sector mandates that 

raise Constitutional concerns and could prove counterproductive by 

driving more volume out of the mail stream. It would slash services, abrogate collective bargaining agreements, and maintain the 

onerous retiree health benefits prefunding requirement. The bill 

mandates the establishment of costly bureaucratic Commissions 

and governing Boards that may be no more successful than the 

Postal Service’s existing reform efforts. 

Instead of pursuing policies that will essentially dismantle the 

Postal Service, Congress should be advancing bipartisan legislation 

that will enable the Postal Service to surmount its financial challenges by implementing reforms in three core areas: personnel, 

profitability, and performance. 

First, the Postal Service should not be forced to take on additional debt, but instead should be granted full access to the $10.9 

billion surplus in its Federal Employee Retirement System (FERS) 

account—funds that rightfully belong to the Postal Service. This 

existing surplus should be used to incentivize the retirement of 

100,000 or more active Postal Service employees in a compassionate manner that does not abrogate existing contracts between 

management and workers that were negotiated in good faith. This 

action will also help reduce the Postal Service’s debt burden and 

allow it to pursue operational and capital enhancements to improve 

its future viability. 

Second, the Postal Service should be empowered to function more 

like a business by focusing on profitability and accountability to 

stakeholders, who in this case are ratepayers and the American 

public. The Postal Service should be permitted to leverage its 

unique presence in communities across the country to offer new 

and novel services and products, such as check-cashing, digital currency, and enhanced logistics and warehousing services. 

Third, the Postal Service’s future profitability would be significantly improved if it were granted some level of regulatory relief, 

pricing flexibility through revisiting the composition of the rate 

cap, and greater leeway to reduce its brick and mortar footprint 

through a deliberative and transparent consolidation and co-location strategy. 


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Although many of these proposals are included in H.R. 2967, the 

Innovate to Deliver Act of 2011, to date the Committee has declined to consider this legislation. 

The Postal Service reaches every corner of every state and touches the lives of millions of Americans on a daily basis. Rather than 

unilaterally advancing heavy-handed legislation that will devastate 

the Postal Service and punish workers, we should be working in a 

collaborative and bipartisan fashion to develop reform measures 

that will create the environment in which one of America’s most 

trusted public institutions will be able to continue to implement its 

universal service mandate while meeting its operational costs. 

ELIJAH E. CUMMINGS, Ranking 

Member 

STEPHEN F. LYNCH, Ranking 

Member, Subcommittee on 

Federal Workforce, U.S. Postal 

Service, and Labor Policy. 

Æ 


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