Association for Postal Commerce
"Representing those who use or support the use of mail for Business Communication and Commerce"
"You will be able to enjoy only those postal rights you believe are worth defending."

Key Points Made By Witnesses before the
Senate Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security

Senator Thomas Carper:

• The Postal Service is under stress
• The Postal Service has laid out a plan to cut costs.
• Despite efforts to cover costs, the USPS may be hitting its borrowing limit to cover costs.
• The mailing community said that more postal rate increases could lead to further mail volume losses.
• USPS losing ground to electronic communication.
• Still unknown exactly what is at the root cause of the Postal Service's fiscal stress.
• The USPS has approached Congress with a proposal for PAEA funding relief. Concerns have been raised about this proposal.
• This would reverse a "deal" made in PAEA regarding the funding of liabilities and determining obligations for former military personnel.
• Enactment of some version of the USPS' may be vital.
• GAO has said that a temporary grant of relief would be appropriate.
• There are some questions as to what kind of business model can work and generate more revenue.

Senator Daniel Akaka:

• Over the past two years, the USPS has undergone transformation, primarily because of PAEA.
• More than a band-aid is needed. USPS could use its exigency options. This would drive revenue down even further.
• USPS needs to find new business opportunities and expand its current relationships.
• Needs to have caution with NSAs to make sure they pay their own way.

Senator Susan Collins:

• Enactment of PAEA was an arduous process.
• We need to continue the nation's universal postal services. Mail is still a key part of the nation's economic infrastructure.
• The current recession has placed the Postal Service back on the congressional agenda.
• The question has been raised as to whether the Postal Service is trying to use this crisis as a way of pulling away from PAEA.
• The PAEA retiree payments were a key part of the negotiating to make PAEA possible.
• A rwo-year reprieve is doable. Beyond two years make take too much pressure off the USPS to respond to its other challenges.
• GAO has been disappointed with the USPS' responses. GAO expressed frustration with the USPS' lack of transparency.
• Very disappointed that the proposed solution is the elimination of the six-day a week delivery requirement. Service cutbacks also can impact mail volume adversely.
• Already received many complaints from publishers in Maine. Service has been compromised.
• I don't know how you can ask for relief while proposing cutbacks in service that could precipitate further losses.
• I'm very concerned about the lack of the Postal Service's financial transparency. You're coming to Congress for relief with the needed transparency. This is unacceptable.

Senator Tom Coburn:

• No measure of fiscal relief will be enough to ensure the USPS' viability.
• Changes are needed to flexibly respond to its challenges.
• You have a failed business model. Until you answer what your new business model should be, relief shouldn't be given.
• I think electronic diversion is going to take away 90% of your First-Class Mail. This mail volume isn't coming back.
• Tell us what Congress needs to do to help you develop a new business model.
• You're asking us to give up $5 billion without giving us a plan that will allow us to see you'll have continued viability.

Postmaster General Jack Potter:

• The Postal Service is in acute financial crisis.
• The cause of the financial situation we are facing is two-fold.
• A revolution in the way people communicate has structurally changed the way America uses the mail. For the last decade, we have experienced a steady erosion of First-Class Mail – one of our highest-margin products – as billings, payments, statements, and personal and business correspondence continue to shift from the mail to electronic communications.
• Extraordinary, upward cost pressures led by record-high fuel prices for our more than 220,000 motor vehicles and 37,000 facilities; contractual cost-of-living allowances for our almost 600,000 bargaining-unit employees, reflecting a sharp rise in consumer prices; and a congressionally mandated $5.4 billion annual funding payment for the Postal Service’s share of retiree health benefits.
• All of these factors contributed to a greater-than-expected net loss of $2.8 billion last year.
• Steps have been taken to reduce postal costs. Among the changes is a recently imposed freeze on all USPS officer and executive pay salaries at the 2008 levels. Steps also have been taken to reduce postal management expenses at national and area levels.
• The problems we are facing are intensifying.
• An exigent price increase would be counterproductive, particularly in an environment where mailing activity has already severely contracted.
• Revenue growth that is based on business growth – not simply price increases – is also a key element that is necessary for our long-term viability.
• We believe there is an urgent need to balance current responsibilities against future responsibilities. 
• It is possible that the cost of six-day delivery may simply prove to be unaffordable. If that should occur, it could become necessary to temporarily reduce mail delivery to only five days a week. We would do this by suspending delivery on the lightest volume days. Toward this end, I reluctantly request that Congress remove the annual appropriation bill rider, first added in 1983, that requires the Postal Service to deliver mail six days each week.
• We are asking for a legislative change to provide relief from the crippling cost burden imposed by the law’s requirement that we prefund the employer premium for the health benefits of future retirees while continuing to pay health care premiums for our current retirees. This, in no way, removes our obligation to satisfy this basic benefit funding need – nor should it. What it does do, by transferring the current premium payments to the fund, is improve our financial position and cash flow significantly. This will free up a tremendous portion of operating revenue to offset our current operating expenses.
• The USPS will lose 20 billion pieces out of its current 212 billion. Will drop to 189 billion pieces.
• In the first quarter of this fiscal year First-Class Mail has dropped 6%. Advertising mail has dropped 11%.
• Reduction of days of delivery has been discussed with mailers. They'd be willing to make adjustments to keep rates within inflation.
• The USPS is not proposing a permanent change in days of delivery, but only the flexibility to adjust days to actual mail volume.
• Over the long term, service reductions may be a reality.
• No one anticipated the size of the present precipitous volume decline.
• What's more detrimental? Raising rates above inflation? Lower service levels permanently? Or more flexible responses in service to actual mail volume.
• We need Congress' support for facility consolidations and infrastructure adjustments. Stop the NIMBY.
• Our first priority is to reduce our use of manpower when its required.

Postal Regulatory Commission Chairman Dan Blair:

• The USPS is facing troubling financial difficulties.
• The current economic downturn comes amidst electronic diversion. All mail volumes are declining.
• Given the choices, a short-term relief from PAEA payment schedules may be the most viable immediate alternative.
• The USPS should present Congress and the PRC a comprehensive long-term financial plan.
• More, not less, transparency is necessary.
• The Commission found that reducing days of delivery can be a double-edged sword.
• The PRC needs a clearer picture

Phillip Herr, Government Accountability Office:

• The Postal Service has not offset all of its costs with current measures.
• Mail volume will continue to decline.
• Some short-term relief may be in order. Two years worth of relief is preferable.
• The USPS needs to modify work rules to reduce costs.
• The USPS needs to take urgent action beyond its current efforts.
• It needs to reduce its excess mail processing capacity. Only limited action has been taken to date.
• Retail services can also be changed.
• A broad integrated plan would make for better policy.
• Need to explore percentage the USPS pays for health care benefits.