Date: 2005-07-26
Speaker: TOM DAVIS (republican)
Chamber: H
State: . Virginia

Mr. Chairman. I yield myself such time as I may consume. Mr. Chairman. most of us are familiar with the engraved saying outside the James A. Farley Post Office in New York City: "Neither rain. nor snow. nor heat. nor gloom of night might stay these couriers from the swift completion of their appointed rounds." This is the unofficial motto depicting some of the circumstances -our Nations letter carriers face in fulfillment of the universal service obligation of the United States Postal Service. Mr. Chairman. I rise today in support of H.R. 22. the Postal Accountability and Enhancement Act. which addresses a problem plaguing our Postal Service today that is far greater than the snow or rain or heat or gloom of night. That problem is the outdated and unsustainable structural framework of the Postal Service which threatens to bring it to the brink of catastrophe unless Congress acts immediately. This legislation is about more than reforming the Postal Service itself. It is about reforming and sustaining a vital sector of our overall economy. After all. the Postal Service currently has about 707.000 career and 98.000 noncareer employees. In addition. more than 9 million American jobs. $900 billion in commerce. 9 percent of the Nations gross domestic product. let me repeat. 9 percent of GDP depend on mail and package delivery. Thus. the Postal Service is not only vital to our national communication network but also to our national economy. Each year the Postal Service processes and delivers 208 billion pieces of mail to more than 130 million addressees in the United States. That is 208 billion magazines. catalogs. thankyou notes. birthday cards. wedding invitations. Social Security checks. IRS refunds. letters to Congressmen. movie rentals. all delivered in fulfillment of the Postal Services promise of universal service. The last time Congress successfully passed legislation to overhaul the post office was 1970 when President Nixon signed the Postal Reorganization Act. before emails. before fax machines. It is time to bring the service into the 21st century. The legislation we are considering today. the Postal Accountability and Enhancement Act. is the culmination of a decade of hard work and study. not to mention a great deal of bipartisan negotiation and cooperation amongst various groups. Consequently. H.R. 22 now represents our best chance at solving the structural. legal. and financial constraints that have brought the Postal Service to the brink of utter breakdown. This past April. the Postal Service filed paperwork with the Postal Rate Commission to request a 5.4 percent rate increase for most categories of mail. These rate hikes. which are scheduled to take effect early next year unless Congress acts to prevent them. will impose a significant cost burden. let us call it what it is. a tax on the postal consumer. For direct marketers. financial service companies and businesses relying heavily on shipping and mailing. these rate hikes are devastating. To make matters worse. increasing postal rates could send the postal office into what many observers call a death spiral. where declining business leads to higher rates which in turn leads to decline in business until it is too late to change course. Unfortunately. under current law. the Postal Services only recourse to remain competitive in todays market is to raise rates. That is no way to run an operation. In addition. the Postal Services most recent request for a rate increase was spurred in part by an existing requirement that the Postal Service contribute $3.1 billion to a Federal pension escrow account which now houses more than $73 billion in civil service retirement savings that rightfully belongs to the United States Postal Service. This is just one of many instances in which the USPS is hampered by the current legal framework. And it is one of many outdated requirements that H.R. 22 seeks to reform. Quite simply. the laws that the Postal Service has today are outdated and unsuited for todays competitive environment. Let me take just a minute to highlight a few of the reform components included in this comprehensive bill that will enable the service to move into the 21st century. Universal service. First and foremost. the bill preserves the Postal Services commitment to universal service. the guaranteed delivery 6 days a week to each and every address in the United States. Pension responsibility. It returns responsibility for funding the military cost of postal retirees pension to the Treasury Department where it belongs. It is recommended by the Presidents commission. This liability was shifted to the Postal Service in the last Congress. That shift was little more than an accounting gimmick. but it is one that must be reversed if we are to be serious about fixing the Postal Services longterm balance sheet. The escrow account. As I have already mentioned. the bill frees up the $73 billion in civil service retirement savings that has been held in escrow. allowing the Postal Service to use this money to defray rate increases. among other options. Modern rate regulation. This legislation shifts the basis of the Postal Rate Commission from a costly. complex schemeof rates to a modern system designed to ensure that rate increases generally do not exceed the annual change in the consumer price index. This applies only to marketdominated product�. such as letters. periodicals. and advertising mail. because the Postal Service has provided different pricing freedom for its competitive products. like express mail and priority mail. Strengthening the commission. This act will rename the Postal Rate Commission the Postal Regulatory Commission and give it teeth by granting it subpoena power and a broader scope for regulation and oversight. Finally. the act sets the stage for future reforms by mandating several studies including a comprehensive assessment of the scope of standards for universal service. Today. the White House released its statement of administration policy. its SAP. regarding this legislation. While we share the ultimate goal of effectively reforming the Postal Service. some issues still lack consensus between the Congress and the White House. The administration has established some general. overarching principles to guide the framing of the comprehensive reform of the U.S. Postal Service. These include best practices of corporate governance. transparency. flexibility. accountability. and selffinancing. Our bill shares these goals. but recognizes these principles are often times at odds with one another and may require some give and take. For example. the administration has proposed segment reporting for each and every class of mail. a practice which would unfortunately place the Postal Service at a competitive disadvantage with some of its toughest competitors. Thus. this requirement would be contrary to the administrations first stated proposal of best practices of corporate governance. It is just one example of an instance in which compromise is needed if we are to enact meaningful. comprehensive reform. This bill. the refined product of nearly 10 years of careful negotiation and compromise. strikes an ideal balance among the guiding principles on which both the House and administration are in agreement. I just want to assure the administration we will continue to work closely will them as H.R. 22 heads toward a conference. Before I conclude. I want to take this opportunity to thank the gentleman from New York . who chaired our special panel on postal reform and was the original bills chief sponsor. He was. without- doubt. the right leader to undertake this daunting task. I also want to thank the former chairman of the Committee on Government Reform. the gentleman from Indiana . who played an integral role in moving the ball forward on postal reform that allowed us to be where we are today. Finally. I want to thank the Committee on Government Reforms ranking member. the gentleman from California . and the gentleman from Illinois . the ranking member on the special panel. for their dedication to this subject and their willingness to operate in a bipartisan manner and work through this. through the difficult issues that have been presented. Bipartisan cooperation is the primary reason why this bill has finally reached the House floor and why we have been able to keep such diverse stakeholders around the table in productive discussions. Mr. Chairman. I reserve the balance of my time.