GSA

Floor Speech

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Mr. SANDERS. Mr. President, let me begin by once again thanking Senator LIEBERMAN and Senator CARPER and Senators COLLINS and BROWN for their long and hard work on this issue, which is of enormous consequence to the American people.

Sometimes what people inside the beltway perceive as opposed to what people outside the beltway perceive are two different worlds. I can tell you that back in Vermont--and I suspect in rural areas and States all over this country--people want to save the post office. They know how important it is for small businesses, for our economy, and for their own needs. So the issue we are dealing with is a very significant issue, and I hope that as a Senate we can show America that we can come together regardless of political ideology. This is not a progressive issue, a conservative issue, Republican, Democratic or Independent. This is an issue that impacts tens of millions of Americans, and I hope we can move together as we should.

I wish to say a few words on the Postal Service and finances today. Everybody knows the Postal Service is, in fact, facing significant financial difficulties. Revenue at the Postal Service has gone down from about $75 billion in 2008 to $66 billion last year. In the midst of the digital revolution, first-class mail has gone down significantly--no debate about that--and it has been replaced and will continue to be replaced by e-mail usage and the Internet. There is no question but that this is a real issue that has to be addressed.

But let me be very clear that in terms of the revenue problems facing the Postal Service, the major problems we have are not just the decline in first-class mail. It is an issue that happens not to be the major issue. The major issue, in fact, is that the Postal Service has seen a significant loss in mail volume and revenue due to the most severe recession our country has faced since the 1930s. As the Postal Service indicated on May 30, 2010, ``The effects of the recession account for two-thirds of the mail volume decline.''

The first point we want to understand is, yes, decline of first-class mail is a real issue. But second of all, similar to businesses all over this country, revenue is being impacted by the recession. How we can get our country out of the recession, create more jobs, put more money into the hands of working people is, of course, a major issue we must address.

In that regard, I do wish to say that in the middle of this terrible recession, when real unemployment--real unemployment; it is not 8.2 percent but, in fact, is closer to 15 percent, counting those people who have given up looking for work, those people working part time--it would seem to me this body wants to do everything we can not to see 200,000 jobs slashed at the U.S. Postal Service, many of them decent-paying jobs, many of them union jobs.

We may not be able to save every one of those jobs; we want the Postal Service to be efficient. But on the other hand, I would hope we see as a significant priority that in the midst of a recession, we do not want to downsize a major American institution by 200,000 jobs--many of them, by the way, jobs belonging to veterans.

A couple months ago there was a whole lot of debate about how do we create jobs for veterans. I can tell you one thing we don't do is downsize the Postal Service by 200,000 workers, many of them being veterans.

We talked about the decline in first-class mail being important. We talked about the recession being important. But I wish to raise another issue that I think many people are not familiar with and that has nothing to do with first-class mail, nothing to do with the recession or, in fact, e-mail or the Internet; that is, to a very significant degree, the major reason the Postal Service has been running a deficit since 2007 is due to accounting issues.

For example, everybody has to understand this issue if we are going to have an open and honest debate about the future of the Postal Service: Due to a law passed in 2006, the U.S. Postal Service--uniquely in America, uniquely within government, Federal, State, local, uniquely in terms of the private sector--has been forced to prefund 75

years' worth of future retiree health benefits in just 10 years--seventy-five years' worth of future retiree health benefits in just 10 years. There is no other agency of government that comes close to that onerous requirement, nor are there any companies in the private sector that have been asked to do that. This mandate costs the U.S. Postal Service between $5.4 billion and $5.8 billion per year.
So what I beg of my colleagues is when they look at the financial problems facing the Postal Service--which are real--do not forget that, because of this 2006 legislation, the Postal Service needs to come up with approximately $5.5 billion every single year to prefund retiree health care. This is an important point, and I hope my fellow colleagues in the Senate are listening. One hundred percent of the Postal Service's $20 billion debt from 2007 to 2010 is the result of this prefunding mandate. Let me repeat it. One hundred percent of the Postal Service's $20 billion debt from 2007 to 2010 is the result of this $5.5 billion per year prefunding mandate. Without this mandate, the Postal Service would have made a $700 million profit from 2007 to 2010.

Let me repeat that, because these are facts that have not often been introduced into this debate. We have folks coming up here who are saying the Postal Service is collapsing financially and so forth and so on. But it is important to understand the facts, and the facts are that despite the worst recession--which we are currently in--since the 1930s, despite the competition from e-mail and the Internet, the Postal Service would have made a $700 million profit from 2007 to 2010 if it was not forced to prefund future retiree health benefits.

In addition--and I hope people listen to this as well--during the first quarter of 2012, a few months ago, the U.S. Postal Service would have generated a $200 million profit had it not been required to prefund its future retiree health benefits.

I think as we debate these issues about the future of the post office, it is absolutely imperative that we understand the role of the $5.5 billion every single year that the Postal Service has to come up with to prefund retiree health benefits.

A few months ago I asked the Inspector General of the Postal Service, whose name is David Williams, David C. Williams--he is the Inspector General of the Postal Service--I asked him to talk a little bit about what this prefunding of health benefits meant. I ask unanimous consent to have printed in the Record a copy of his letter, which is dated February 6, 2012.

There being no objection, the material was ordered to be printed in the RECORD,

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Mr. SANDERS. If I might, because I think this is an important letter, I wish to report a significant part of it. I hope people appreciate what the Inspector General of the U.S. Postal Service is saying. This is a guy who knows something about the Postal Service. This is a letter to me.

Dear Senator Sanders:

For several days last week I met with you and your staff to discuss solutions to the current financial crisis within the Postal Service. At the conclusion of those discussions you requested our office focus on one of the solutions that we presented, which examined an option to address the current benefit fund financing. This proposal would eliminate the requirement for the Postal Service to make annual $5.5 billion payments into its retiree health benefit fund, and allow the $44 billion currently in the fund--

Let me talk about that. There is right now, as a result of these funding payments, $44 billion currently in the fund--``to grow with interest.''

What he is saying here, what happens if you have $44 billion and it accrues, as it does, interest between 3 and 4 percent a year. Then he continues. If you did that:

No payments would be made from the fund until it is deemed to be fully funded, and the Postal Service would continue to directly pay for the health care premiums for retirees. An additional element of the proposal would allow current overpayments of $13.1 billion in the Postal Service pension funds to be funded to the Postal Service.

This is also a point that has not been discussed at all. In fact, we do address it in the current legislation. That is, not only is the Postal Service being asked to come up with an onerous $5.5 billion a year to prefund future retiree health benefits, it is generally acknowledged--I think by everybody who has studied the issue--that the Postal Service has made overpayments of $13.1 billion into the Federal Employees Retirement System and the Civil Service Retirement System, adding those two together. This is what he said, the Inspector General of the U.S. Postal Service:

Our analysis of this proposal shows that if it were adopted,the amounts in retiree healthcare fund would grow from $44 billion to the $90 billion estimated current liability in 21 years. This $90 billion protected liability is not a static or precise figure--

It varies a little bit is what he is saying--but essentially he says that if you don't add another nickel into the $44 billion, it will grow to $90 billion in 21 years and essentially take care of the payments it has to take care of.

The point I want to make clear is that in terms of future retiree health benefits, we already have $44 billion in the account. In my view and in the view of people who know more about this issue than I do, it is not necessary to put more money into that account. That is an issue that this legislation attempts to address.

Let me conclude by saying the issue we are dealing with is of enormous consequence to our country. It is imperative, in my view, that we not shut down 3,700 rural post offices. I commend the Postmaster General. We have been working with him and he has moved away from that position. In my view, we have to do everything we can to make sure that we maintain very high standards for mail delivery in this country. So when a business puts a package in the mail, they know it will be delivered in a reasonable time. That is one of the strengths of the Postal Service. In my view, we do not want to shut down, as in the Postmaster General's original proposal, half the processing plants in this country which would slow down mail delivery service. In my view, we do not want to end Saturday mail. I think it is an important part of maintaining mail delivery standards.

But the main point I want to make today is, yes, the Postal Service faces financial problems. But not to understand the significant role--the causation of those problems that are a result of the $5.5 billion in prehealth funding for retirees--is to miss a very significant part of this debate. I think it is fair to say in this bill we are beginning to address that issue and also address the issue of the overpayment from the Postal Service to the Federal Employees Retirement System.

Let me conclude by thanking Senators Lieberman, Collins, Carper, and Brown for the work they have done. I hope we can have an intelligent and constructive and kind of nonpartisan discussion as we go forward, with good amendments that are relevant, from both sides of the aisle.

The bottom line is that saving the Postal Service is enormously important for our economy and certainly for the tens of thousands of workers who are out there every day doing a great job for us.

I yield the floor.

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