Violence Against Women Reauthorization Act of 2011-Motion to Proceed

Floor Speech

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Ms. COLLINS. I thank the chairman.

Mr. President, we are going to resume debate today on the postal reform legislation our committee, on which the Presiding Officer serves, has worked very hard to produce and to do so in a bipartisan way. As Chairman Lieberman has indicated, last week, we labored very hard to produce a list of amendments that will allow Members to work their will on this legislation.

There are many different viewpoints on the path forward for the Postal Service, but there can be no doubt about one fact: The Postal Service has lost more than $13 billion in the last 2 years. Despite being relieved from a payment that is required under law toward the health benefits of future retirees, it still lost billions of dollars. If we fail to act, if we turn down this bill, the Postal Service will not survive as we know it today, and that is a fact. The Postal Service, later this year, will have great difficulty even meeting its payroll if we do not act. The Postal Service will max out on its credit that it can borrow from the Treasury if we do not act. The Postal Service will be forced to resort to dramatic and Draconian service cuts that will drive still more customers from the system if we do not act. So just closing our eyes and pretending somehow the Postal Service will find a way through this, without our legislation, is not a realistic option.

As I have indicated, there are a variety of views on both sides of the aisle on what the appropriate path forward should be, and we will have a vigorous debate today--we started it last week--on what the best option is for the Postal Service. For me, the bottom line is this: The Postal Service will not survive if it pursues a course that risks alienating the remaining customers it does have. So resorting to widespread closures of postal processing plants, which would essentially do away with overnight delivery of mail, and raising prices so big mailers pursue alternatives to using the Postal Service for delivery are not the solutions to the Postal Service's woes.

On the other hand, the Postal Service clearly cannot continue to do business as usual. It has to innovate. It has to look for new sources of revenue, and we have given some very specific ideas in our bill by allowing, for example, the Postal Service to provide services and share space with Federal, State, and local governments and to also ship beer and wine with a signature from the customer, just as its competitors, FedEx and UPS--United Parcel Service--are able to do. We also do not prohibit the closure of all post offices, nor do we mandate a certain number be closed; instead, we set standards. We set service standards, and those service standards would govern the decisions the Postal Service would make. I think that is the appropriate way to approach the very difficult issue of how to reduce the infrastructure of the Postal Service.

But the fact remains--and it is a painful fact--that 80 percent of the Postal Service's budget is workforce related. It is always difficult to recognize when a workforce, particularly one as dedicated as the American Postal Service workforce, is simply too big for the volume of work the Postal Service now has. But there are compassionate ways to deal with this workforce problem, and our bill allows for a refund of an $11 billion overpayment the Postal Service has made to the Federal Employees Retirement System--known as the FERS system. This is an overpayment that has been verified by an independent board of private actuaries the Office of Personnel Management relies upon. It has also been verified by the Government Accountability Office. This overpayment, in part, can be used and would be directed to be used by the Postmaster General to offer retirement incentives and buyouts up to and capped at $25,000, the exact same number
that is used in buyouts in Federal agencies to reduce the workforce.

More than one-third of the Postal Service's employees are eligible for retirement today. That is why the Postmaster General believes, if he provides a bit of an incentive, he can reduce the size of the Postal Service workforce by more than 100,000 workers. That is about 18 percent of the entire workforce. That approach of using retirement incentives, buyouts, and incentives such as that is very similar to the approach the private sector uses, that large corporations use when they are faced with the painful task of having to downsize their workforce.

The rest of the overpayment refund would be used to pay down debt, something the Postal Service desperately needs to do as it approaches that $15 billion line-of-credit cap.

I wish to stress--because there is going to be a lot of discussion about this, perhaps very shortly--these are not tax dollars being refunded to the Postal Service. I read from a letter from the inspector general on the floor last week that verifies the revenues for the FERS payment come from two sources: They come from the postal employees themselves who contribute to the FERS system, and the revenues come from the Postal Service's own revenues, which are from selling stamps, mailing packages, and the other services the Postal Service provides.

This is not a taxpayer bailout. It is not a refund of taxpayer dollars. This is a refund of a substantial overpayment of money from the Postal Service's employees and the Postal Service itself, from revenues it generated, to the FERS system that never should have occurred. That is another whole issue--of how it occurred. This overpayment has been confirmed by the GAO and by an independent board of actuaries hired by the Office of Personnel Management.

That is a very important part of this bill. If the Postmaster General is successful--as I believe he will be if he aggressively implements these provisions in compassionately reducing the size of the workforce--the estimates are that provision alone would save about $8 billion a year, and it would allow the Postmaster General to right size many of the processing plants. Some of the processing plants are too big for the volume they now have.

But the answer is not to close them altogether because that has such a detrimental impact on the delivery of mail, and that leaves rural America behind. That would result in there no longer being overnight delivery for first-class mail.

Let me give an example from my State, where the Postmaster General has unwisely proposed closing one of only two processing plants we have in a State as large as the State of Maine. He would keep the one in the southernmost tip of the State but close the one in Hampden, ME, which serves northern, central and eastern and parts of western Maine. It serves about two-thirds of the geography of the State. If that postal processing plant were to close, mail from northern Maine--being sent from one community in northern Maine to another--would have to undergo a more than 600-mile round trip to the one remaining processing plant in Maine. I can't imagine how many days that would take, but I am certain it would cause people to stop using the mail, and, thus, revenue would decline still further because there would be no possibility of overnight delivery of bill payments, for example, or bill delivery.

This is not the answer. So what is the answer? That plant could be downsized, not closed. We need to preserve the service.

If the plant is too large now for the volume of mail that goes through the plant, why doesn't the Postal Service rent out part of the plant? I am sure a mailer in the area--perhaps several mailers in the area--would welcome the opportunity to rent space in that building and be right next to the postal processing plant. That would work very well.

There are so many options, but the Postmaster General, in my view, has not pursued those options. When it comes to rural post offices, there are so many options. For example, a post office could be open in a rural community, say, from 7:00 to 9:00 in the morning and 5:00 to 7:00 at night so that individuals going to and from work could stop and do their business, but the Postal Service would still be able to save funds by not having the post office open the entire day. A small post office could be colocated in a retail facility--the local pharmacy, perhaps, or the local grocery store.

There are possibilities which need to be explored--and which our bill directs the Postmaster General to explore--in order to avoid the widespread closure of post offices in rural America that will have a detrimental impact on the individuals and the businesses located there. Our bill in essence forces more creativity on the Postal Service by again setting standards with the Postal Regulatory Commission, which is the regulator in this case, and then ensuring that the actions of the Postal Service with regard to infrastructure meet those standards.

This bill has many other provisions that we discussed at length last week, so I am not going to repeat them now, but let me reiterate the point I made at the beginning of my remarks.

We have been able to negotiate, with the cooperation of both the majority leader and the Republican leader and with a lot of hard work by the members of the committee and the floor staff and our staff, a very fair process that will allow many amendments to be offered, expressing a wide variety of philosophies and views on the proper road ahead. But what we cannot do is fail to act. If we do not act, that will be a death sentence for the Postal Service--an American institution enshrined in our Constitution that is the linchpin of a $1 trillion mailing industry that employs 8.7 million Americans.

This debate is not just about rural post offices, important though they are. It is about our economy and not delivering a death blow to an institution that is the center of much of our economy. I hope Members keep that in mind as they come to the floor with proposals, for example, to essentially privatize the Postal Service or to do away with most of its infrastructure because if those amendments prevail, they will deliver a crushing blow to our economy at a time when we can least afford it, and they will jeopardize that trillion-dollar mailing industry that includes everything from paper manufacturers, to magazine publishers, to newspapers, to financial services--all of these industries that are so dependent on the U.S. Postal Service--and that is an outcome we must avoid.

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Ms. COLLINS. Mr. President, let me start by responding to the ranking member of the Budget Committee by saying that I could not agree with him
more that it is absolutely unacceptable that we have not had a budget passed in the Senate for more than 1,000 days. That is totally unacceptable. It is one of the reasons we are in such a financial crisis in this country. So I completely agree with Senator Sessions that we should be doing a budget resolution on the Senate floor, and I wholeheartedly agree with his comments that it is absolutely irresponsible for us to be proceeding without a budget resolution. And as a member of the Appropriations Committee, I would say to my colleagues that it makes it very difficult for us to carry out our work. Due to the cooperation of the chairman and ranking member of that committee, we are operating under allocations for each subcommittee, but it would be far preferable if there were a budget resolution that passed, and it should have passed last year, the year before, and it should be passed this year. So we are in complete agreement on that point, and I know that has been a great source of frustration for the Senator from Alabama as the ranking member of the Budget Committee.

Having said that, let me explain a few facts. First of all, there are no tax dollars being authorized by this reform bill. There is no transfer of taxpayer money to the Postal Service. What we have here is a very strange and unusual budget situation. And the score CBO has is incredibly misleading because the Postal Service, oddly enough, is part of the unified budget of the United States even though most of its accounts are off-budget, but it participates in Federal employee retirement systems and the health benefits systems and the workers' compensation systems, where postal dollars that come from postal employees and from postal ratepayers are commingled, if you will, with tax dollars that come from other Federal agencies into the retirement system, the workers' comp system, and the health benefits system. And that creates this odd situation, which makes it very difficult for CBO to score this bill correctly.

The inspector general of the Postal Service puts it far more bluntly. In a February 22 report from this year called ``Budget Enforcement Procedures and the Postal Service,'' the inspector general said:

..... the Postal Service's off-budget status ..... expose[s] the Postal Service to an inappropriate and illogical application of the scoring process that threatens its ability to reform and heal its financial condition. Scoring and budget enforcement were created for a good purpose, but they are undermined when the scoring process assumes that unlikely or inappropriate inflows to the Treasury must occur.

Let me give you a couple of examples because it is incredibly important that we walk through the score so that our colleagues can understand the unique on-budget/off-budget status of the Postal Service, particularly in the area of reducing payments to retiree health benefits or recovering overpayments to the FERS system and how the CBO scoring method obscures the true savings achieved by refunding the FERS payments.

Again, let me repeat that since 1971 the Postal Service has received no Federal subsidy to operate other than some very minor appropriated dollars for functions that the Postal Service is legislatively mandated to do, such as mail for the blind and overseas ballots for our troops. That is it. Prior to 1971 there was a taxpayer subsidy year after year to the Postal Service, but that ended with the Postal Reform Act in that year. So from the sale of stamps, the cost of shipping packages, and the rates mailers and magazine publishers and newspaper publishers pay to get the print versions delivered comes the revenue for the Postal Service. And even the money the Postal Service uses for retiree benefits comes from a combination of the contributions the postal workers make and the money the Postal Service invests.

As I mentioned earlier, there is a significant overpayment into the Federal Employees Retirement System, and we, along with the administration, the GAO, the independent actuaries, and the Postal Service inspector general, have all proposed that overpayment be returned to the Postal Service, and it would be used in part to finance these buyouts and retirement incentives to reduce the size of the postal workforce.

Let's look at how CBO scores this particular part of the bill.

First of all, CBO gives this bill no credit whatsoever for the buyouts, and here is why: CBO argues that the Postal Service already has buyout authority, but as the Presiding Officer knows better than anybody in this Chamber, our bill changes the status quo in two critical ways. First of all, the Postal Service has no cash right now to do these buyouts. That is one of the reasons we are so eager to get the money from the overpayment of FERS refunded to the Postal Service. Second, in our substitute bill, we specifically direct the Postmaster General to use a portion of this money to entice 18 percent of the current postal workers to accept this offer. That is a big difference. So there is a mandatory direction to the Postmaster General to reduce the workforce by about 18 percent and there is the cash that will allow him to offer buyouts to do that. Why CBO doesn't score that as a savings to the Postal Service is beyond me.

There is another way to reduce the workforce and, again, the funds for this would come from the FERS refund. Our bill provides new authority to the Postal Service to offer 1 or 2 years of credited service toward a pension annuity so that for a worker who is just lacking a year or two to reach the number of years necessary for retirement could be credited with that extra year or two of service, depending on which retirement system the worker is in. Unfortunately, the CBO makes an assumption that only several thousand employees would take advantage of that offer and credits the bill with savings of only $643 million over 10 years. Since these kinds of service credits have never been offered before, it is not clear how the CBO came up with this assumption. There is no precedent for it. There is no data for the CBO to use. Again, our original bill did not include the hard requirement for the 18-percent reduction, but our substitute does. Yet CBO does not recognize that change.

The Postal Service has told us, as the Presiding Officer would attest, these requirements and this new authority and the funds for the buyouts and the service credit would allow them to reduce their workforce in the neighborhood of 100,000 employees and save some $8 billion a year. That is not reflected in the estimate. I use that example because it shows how strange the scoring is. This is a quirk of the budget-scoring rules because when there is a transfer of Postal Service money--not taxpayer money, Postal Service money--from one account in the Treasury, such as the retirement account, into an off-budget postal operations account, the CBO makes this assumption that savings are not going to occur. So when we transfer the $11 billion overpayment--the refund--from the pension account, to which the Postal Service has been overcharged, into a postal operating account, it gets credited as $5.5 billion instead of $11 billion. That means an on-budget account loses $11 billion, as CBO looks at it, and the off-budget account only gains $5.5 billion. This is very complex because it is so obscure and because, frankly, it is so illogical. The result is the net score in the unified budget of $5.5 billion as a cost to the Treasury, and that simply is not the reality. Again, these are not taxpayer dollars that went into the overpayment in the first place. So here we have a provision that is being scored as the $5.5 billion cost to the Treasury when, in fact, they aren't tax dollars, and it is only because this is a unified budget, where some of the accounts are on-budget and some of the accounts are off-budget, that we have this anomalous result. It doesn't make sense.

Let me give my colleagues another example. The CBO acknowledges that our reforms of the Federal Workers' Compensation Program would save $1.2 billion, but CBO doesn't count this reduction as a savings because of the way the Department of Labor charges agencies for participation in the workers' compensation program. Again, that doesn't make any sense, when the CBO itself acknowledges that these are real reforms that are going to save $1.2 billion. Yet we only get credit for $200 million of the reforms.

There is another issue. The CBO does not account for what would happen if the Postal Service allows service to continue to deteriorate because the CBO doesn't recognize the reality that all the big mailers and small mailers tell us, which is that revenue will be driven out of the system if the service cuts associated with plant closures and wholesale closures of post offices are allowed to proceed. The bottom line is that were it not for 50-percent discounts being applied over and over to the savings we achieve for 5-day delivery, retiree health care, the pension refund, on the basis of these strange behavioral assumptions and reflecting the odd combination of off-budget and on-budget accounts being brought together in a unified budget, the bill would have scored approximately $24.6 billion more in off-budget savings, making the bill a net saver of $14.8 billion.

This is so frustrating because it is so complex, but I think if our colleagues look at the example of the FERS overpayment, it becomes very clear because there are no taxpayer dollars involved. Yet it is scored as a cost to the Treasury of $5.5 billion. How can a refund of an overpayment that involves no tax dollars end up being scored as a cost to the Treasury of $5.5 billion? That is how illogical and quirky this estimate is, and it is because of the unique status of the Postal Service and how its various accounts are reflected in the budget.

In addition to my absolute conviction that this score is very misleading, let me make another point. If we do not proceed with this bill--if this budget point of order brings down this bill--the Postal Service will not survive as we know it. Again, we are not providing a taxpayer subsidy in this bill. In fact, I would argue we are preventing a taxpayer bailout in this bill because later this year, if the Postal Service cannot meet its payroll and thus is unable to deliver mail, I think the pressure for the taxpayer bailout will increase substantially, and I do not want to see us return to the pre-1971 era, where the taxpayers were on the hook for the Postal Service. Our bill would avoid that outcome.

Thank you. I suggest the absence of a quorum.

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Ms. COLLINS. Mr. President, I too wish to commend the Senator from Virginia for offering this amendment in conjunction with the Senator from Maryland. I wrote to OPM in July of last year about this very issue. I was very concerned about reports in my own State and from the Washington Post about the tremendous backlog at OPM in processing the retirement applications of Federal and postal workers, and this is just wrong.

As the Senator's statement shows, it has caused some real hardship to individuals. So I was pleased the chairman and I could work with the Senator to modify his amendment so it would be germane to this bill. I look forward, at the appropriate time, to working with the chairman to accept the amendment.

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