Statements on Introduced Bills and Joint Resolutions

Floor Speech

Mr. AKAKA. Mr. President, today I am introducing the Postal Investment Act of 2011 which lays out many ideas to help strengthen the United States Postal Service through investment and innovation.

For many years, I have been an advocate for the Postal Service, its workers, and importantly, postal customers. The Postal Service represents a multi-billion dollar industry on which all Americans rely for delivery of mail and packages. Unfortunately, in recent years, the downturn in the overall economy has negatively impacted the postal business, exacerbating a decline in the mail because of electronic diversion.

The 21st Century Postal Service Act, S. 1789, passed in November by the Homeland Security and Governmental Affairs Committee, contains many needed postal reforms and sensible compromises. Unfortunately, that bill also contained an unrelated measure reducing benefits for disabled and injured federal workers. As Chairman of the Federal Workforce Subcommittee, this issue concerned me enough that I had to vote against reporting the bill to the full Senate. However, I did think the bill contained important provisions that will help the Postal Service and I look forward to further debate. I am introducing the Postal Investment Act to add to that conversation. While this bill is not a comprehensive approach that can rescue the Postal Service on its own, it represents several new ideas that have not yet been debated.

Since 2006, we have required the Postal Service to pay roughly $5 billion per year in to an account to prefund its retiree health benefit liability. This is a payment that no other agency, and few private sector companies, must make. While prefunding this liability was a worthy goal, and it addressed an accounting problem in the Postal Accountability and Enhancement Act of 2006, it is crippling the Postal Service financially. The core of the Postal Investment Act would restructure the retirement health benefit prefunding requirement and allow for the funds set aside against the future liability to be invested in a diverse mix of government and non-government securities, instead of only in government securities as is now the case.

There are promising precedents for investing funds in this way in the Federal Government. In 2001, we passed the Railroad Retirement and Survivors' Improvement Act, which created a trust fund to invest railroad employee retirement assets in non-government securities. Assets of the Pension Benefit Guaranty Corporation also are invested in a diversified manner. Even in the turbulent economic times of the past few years, these funds have seen healthy returns on average, at a much higher rate than government securities alone.

I want to emphasize that the funds invested are there to cover a future liability to provide benefits to workers, some of whom have not been hired yet. Because of the long time horizon and significant assets of this fund, I believe that diversifying its investment would mean positive growth for the fund over time, and would bring it in line with many private sector retirement accounts. If we want the Postal Service to act more like a business, we could start by allowing it similar flexibility.

In addition to investing the fund, my bill would also suspend payments to the prefunding account in any years in which the Postal Service does not have the profits to invest. Unfortunately, under current law, the fund which was set up to insure against future default of the Postal Service is the very thing putting the Postal Service on the brink of default. I believe this new approach is a responsible way forward, which also recognizes the legitimate goal of prefunding this liability over a longer term.

Just as importantly, the Postal Service needs more flexibility in its business model to innovate. My bill contains several provisions to accelerate innovation in the Postal Service's products. Many of these are based on recommendations provided to Congress in a Postal Regulatory Commission, PRC, report released earlier this year. The bill would allow for pricing flexibilities for increased premium services subject to performance requirements. It would also explicitly allow the Postal Service, through the PRC, to create new classes of mail to meet evolving customer demands. For instance, there may be a market for a product with the speed of first class mail, but with none of the additional services that are part of first class. The bill also encourages the further development of experimental products to find new sources of revenue.

In order to create more accountability for product innovation, the bill would require the Postmaster General to designate a Chief Product Innovation officer to come up with new ideas and keep the public better informed of what the Postal Service is doing to find new products and services. My bill would also require more focus on retaining revenues for existing products by reducing uncollected postage.

Finally, my bill contains several provisions related to the postal workforce. Like several other proposals introduced already, the bill would allow the Postal Service access to excess payments it has made over the years to the Federal Employee Retirement System. It would use those funds first to offer voluntary retirement incentives to employees to help right-size the workforce.

The bill also contains a provision which was developed after we were informed that postal workers may not be taking full advantage of the benefits of Medicare after they reach the age of eligibility. The 21st Century Postal Service Act originally contained a provision which would have shifted costs from the Postal Service to the Medicare program and postal retirees by requiring eligible retirees to sign up for Medicare Parts A and B, and reducing the Federal Employees Health Benefit package available to them. Instead, my bill would ask the Postal Service to work with the Office of Personnel Management and the Center for Medicare and Medicaid Services to educate the postal workforce about how the Medicare program can work to enhance their existing health benefits.

To address concerns that have been expressed about how the Postal Service works with its employee unions and management organizations on collective bargaining and consultation rights, the Postal Innovation Act offers ways to strengthen these relationships. It contains a provision clarifying arbitrators' broad authority to consider the factors he or she deems relevant should collective bargaining with a union fail. It also contains a provision clarifying the consultation process for managers, supervisors, and postmasters. In the case of labor and management agreeing to any future workforce reductions, the bill also clarifies that the process would be subject to existing procedures for other Federal employees.

Additionally, as the postal workforce has begun making concessions on pay and benefits and other contributions to the organization's solvency, this bill contains a provision intended to ensure that those at the very top of the Postal Service share in the sacrifice. This provision is modeled on an amendment drafted by Senator Tester that was discussed but never settled on during Committee consideration of postal reform legislation. Currently, the Postmaster General and several other top executives at the Postal Service make more than $200,000 per year, in addition to bonuses, deferred compensation, and other benefits. I believe that running the Postal Service is public service, and the Postal Service simply cannot afford to treat the top management like corporate executives, especially when postal employees and so many other Americans face pay freezes. As important as his duties are, I believe it is wrong for the Postmaster General to be paid more than the Secretary of Defense. My bill would tie the top pay at the Postal Service to the Executive Level schedule used to determine pay for Federal executives.

I believe that the provisions I have outlined in this bill will serve as important ideas as we move forward with comprehensive postal reform. It is my sincere hope that we can work out our differences on the 21st Century Postal Service Act, which would be a workable proposal to address the future of the Postal Service without its flawed workforce provisions.

As we continue this debate, I hope to offer these ideas as ways to further strengthen the Postal Service and show my commitment to preserving that service for all Americans well into the future. I ask my colleagues to consider the proposals I have put forward and work with me and all members who have their own proposals to help enact lasting improvements for the United States Postal Service.

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