President Agrees to USPS Changes

Provide Postal Service financial relief and undertake reform.

The Administration recognizes the enormous value of the Postal Service (USPS) to the Nation’s commerce and communications, as well as the urgent need for reform to ensure its future viability. USPS faces a long-term, structural operating deficit that has been exacerbated by the precipitous drop in mail volume in the last few years due to the economic crisis and the continuing shift toward electronic communication.

Absent legislative intervention, USPS will be insolvent by the end of September 2011. Bold action is needed to ensure that USPS can continue to operate in the shorterm and achieve viability in the long-run.

To that end, the President is proposing a comprehensive reform package that would:

• Restructure Retiree Health Benefit pre-funding in order to reduce near-year Postal payments;
• Provide USPS with a two-year Federal Employees Retirement System employer contribution holiday to take into consideration the current $6.9 billion surplus in Postal contributions;
• Reduce USPS operating costs by giving USPS authority to reduce mail delivery from six days to five days;
• Allow USPS to offer non-postal products and increase collaboration with state and local governments; and
• Give USPS the ability to better align the costs of postage with the costs of mail delivery.

These reforms would provide USPS with over $20 billion in cash relief over the next several years and in total would reduce the federal deficit by more than $10 billion.

Absent from the reform package was the USPS proposal to reduce labor costs.


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