Violence Against Women Reauthorization Act of 2011--Motion to Proceed

Floor Speech

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Ms. COLLINS. Mr. President, it pains me greatly to disagree with my friend and colleague from Tennessee, with whom I have a great friendship and great respect, but what he is essentially offering comes pretty close to a complete substitute for the provisions in our bill, and I wish to go through the provisions to make sure our colleagues understand fully what the choices are that are presented by Senator Corker's amendment.

First, let me say I do strongly oppose his amendment because of the impact I believe it would have on postal customers, whether they are in rural America, whether they are a big mailer, a small mailer, a residence or a business, and what the impact ultimately will be on postal revenue. Let us first discuss the issue of 6-day delivery.

There are a lot of different views on this issue. Senator Corker has presented one, as has Senator McCain, of moving immediately to 5-day delivery. On the other hand, there are Members who have filed amendments who want to prevent the Postal Service from ever moving to 5-day delivery. Here is what is in our bill.

Our bill recognizes the Postal Service should, if possible, avoid deep cuts in its service. Certainly, eliminating 1 day a week of delivery is a deep cut in the service it is providing. It recognizes, however, that if the Postal Service cannot wring out the excessive cost that is in its current system, it may have no choice but to eliminate Saturday delivery in order to become solvent.

What we do is allow a 2-year period during which time the Postal Service would implement the many cost-saving provisions in our bill, including a workforce reduction of 18 percent--which is about 100,000 employees--through compassionate means, such as buyouts and retirement incentives, and then have the GAO and the PRC--the Postal Regulatory Commission--certify that despite undertaking all these cost-saving moves, it is not possible for the Postal Service to return to solvency without this deep service cut. But to move immediately to eliminating Saturday delivery would come at a real cost and it may not be necessary. It may not be necessary at all.

I would also point out the experts in this area are the members of the Postal Regulatory Commission. The experts are not at CBO. The experts are the regulators of the Postal Service--the PRC. When the PRC examined the issue of eliminating Saturday delivery, here is what it found. First of all, it found the potential savings were far less than the Postal Service estimated. In fact, they were half as much as the Postal Service estimated.

Second, they found that eliminating Saturday delivery put rural America, in particular, at a disadvantage because rural America often does not have access to broadband, to Internet services, and to alternative delivery systems. So the PRC, which looked at this issue very carefully and issued a report, found the savings were less by half and the consequences were far more severe for rural America.

Saturday delivery also gives the Postal Service itself a competitive advantage over nonpostal alternatives. If we are here trying to save the Postal Service, why would we jeopardize an asset the Postal Service has that its competitors do not? That is why we came up with this carefully crafted compromise on this issue.

I believe cutting Saturday delivery should be the last resort, not the first
option, because it will inevitably drive away customers. That is one reason the American Newspaper Association is so opposed to doing away with Saturday delivery. It is one reason many of the mail order pharmaceutical companies are so opposed, because many seniors depend on receiving their vital medications through the mail.

Again, we have said if there are no other alternatives, this measure could proceed. But I can't imagine any large business operating this way--cutting service first. My colleagues often talk about how important it is to let the Postal Service act like a ``real business.'' But this is the last thing a real business would do. Real businesses know their most valuable asset is their customer base. Businesses do literally everything else before slashing service and raising prices or anything else that might alienate or drive away their remaining customers, and they do not do this out of the goodness of their hearts but because they understand what drives their bottom line.

The fact is, if more customers leave the Postal Service, the revenue will plummet. Again, reducing service--eliminating Saturday delivery--should be the last resort, not the first option. That is exactly what our bill does.

The Senator's amendment would also repeal the CPI link to postal rates. I am at a loss as to why the Senator would propose that. Eliminating that protection, that orderly system, would be devastating for many mailers. Again, mailers need predictable, steady, stable rates.

Think of a catalog company that prints its catalogs so many months in advance. It now can count on what the postal rates are going to be. Under the amendment of the Senator from Tennessee that stability, that predictability would be gone.

The reason in 2006 that we rewrote the rate-setting system was that it had been an extremely litigious, time-consuming system. Both the mailers and the Postal Service hated the system that we had prior to 2006. Both agreed at the time that it was important to have stability and predictability in rates and to have a system that didn't involve this very expensive, litigious rate-setting system. So we went to the CPI link system so we could have stable, predictable, and transparent pricing increases.

This amendment repeals the section of the current law on rate setting that mailers have repeatedly testified is the heart of the 2006 reforms and something they need if they are to continue to use the Postal Service. That is why the mailers, the largest customers of the Postal Service, are such strong supporters of the predictable system that we put in place in 2006.

Let me turn to another issue. There is so much I could say on all of these, but I can see a lot of Members have come to the floor.

The Senator's amendment would also eliminate the standards we put into the bill to protect overnight delivery within certain delivery areas. We have recently learned that the Postal Service's own preliminary analysis, submitted confidentially in secret to its regulators at the PRC, reveals that its service reduction plan to slow mail delivery and shut down postal plants will lead to more than a 9-percent decrease in first-class mail and a 7.7-percent reduction in all classes of mail.

In this preliminary estimate the Postal Service said the first-year losses alone would be $5.2 billion; that the Postal Service would lose if we proceed with this plan. Now that those numbers have become public, the Postal Service is backpeddling and criticizing its own estimates. But those are the estimates that are in its own survey that was filed with the PRC.

They don't surprise me because they are consistent with what I am hearing from major postal customers, and once those customers turn to other communications options and leave the mail system they will not be coming back, revenue will plummet, and the Postal Service will be sucked further into a death spiral.

There are many other comments I could make about the amendment offered by the Senator from Tennessee. I think his amendment essentially constitutes a substitute to the bill that is before us in that it makes so many fundamental changes. I believe it would be devastating for the Postal Service; that it would cause large and small mailers to leave the Postal Service, setting off the death spiral from which the Postal Service might never recover.

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Ms. COLLINS. Mr. President, I have the greatest respect for the Senator from Hawaii. I know he cares deeply about this issue. But it is simply time for us to reform the Federal workers' compensation program for postal workers and for other Federal workers. For this reason, I oppose his amendment because it does not begin to solve the problems that have been repeatedly documented in the program by the inspectors general at the Postal Service, at the Department of Labor, by GAO, and by the Obama administration, which has called for many of the reforms we have incorporated into this bill. Senator Akaka's amendment takes on only very minor reforms which are already included in the bill. It does not even attempt to constrain the rapidly growing costs of the program, and it truly does nothing to effectively combat the fraud in the program.

Let me start with some background to show the growing, the escalating cost of the Federal workers' compensation system. From 1997 to 2009, the program's costs grew by an astonishing $1 billion, as this chart shows. That was a 52-percent increase in program expenditures. It is one of the reasons why President Obama's administration has submitted changes to this program over and over. Our bill, according to the CBO, would reduce the program's outlays for workers' comp by $1.2 billion over the next 10 years.

I note the Obama administration supports across-the-board reforms, just as we have put in our bill. It makes no sense to have one system for postal workers and one system for Federal employees when they all participate in the same program now. The Postal Service, however, makes up more than 40 percent of all workers' comp cases for the Government, and the number of postal employees on the long-term rolls has increased by 62 percent since 2009. Paying more than $1 billion a year in workers' comp payments, the Postal Service is the largest program participant, providing over one-third of the program's budget. These changes are supported by the leaders at the Postal Service. The amendment would block desperately needed reforms to a program that has not been updated in over 35 years.

Let me talk a little bit about the structure of benefits in the program and why there is a problem. Under the current program, a worker who has dependents and is out on workers' comp receives a payment at the rate of 75 percent of his preinjury salary, and these benefits are tax free. Currently, more than 70 percent of beneficiaries are receiving compensation at that level.

In addition to that, it is important to understand that 75-percent tax-free benefit rate is higher than that paid by any comparable State workers' compensation system and, given our current Tax Code, 75 percent of salary tax free is equivalent, for most people, to a full salary after taxes.

We do want to make sure we have a workers' comp program that takes care of our injured workers that is compassionate, that helps them recover and return to work. But the current program of the Federal Government does not accomplish those roles.

First of all, it does not encourage injured workers to get the help they need to recover and to return to work, as these statistics will demonstrate. Right now, the program, across the board, Federal and postal workers, has 10,000 beneficiaries age 70 or older, 2,000 of whom are postal employees. They are receiving higher payments on workers' comp than they would under the standard retirement program. That is almost one-quarter of all beneficiaries in the program who are over age 70. Of the beneficiaries, 430 of them are over age 90, and 6 of the workers' comp beneficiaries are age 100 or older. These employees are not going back to work. If they were still working, it would be a miracle. They would be retired. It is not fair to postal and Federal employees who work their entire lives, retire at age 60 or 65, and receive a retirement benefit that is 26 percent lower than the median benefit received by workers' compensation recipients. That is unfair. That means people who remain on workers' comp make more money than if they had continued working and much more than they would make in the retirement systems for Federal and postal workers.

I wish to make sure that as we reform the system, we are fair. One of the major reforms is to move people at age 65 from workers' comp to the normal retirement system, but we have exempted from these reforms those who are least able to prepare for it, those who are totally disabled and unable to return to work, and those who are age 65 and over. I think that is a very fair approach.

Another protection we have included for those current claimants who would
be affected by the reforms in the bill is a 3-year waiting period. If a claimant is not already grandfathered and therefore is not disabled and unable to return to work, then that individual would experience no reduction in benefits for 3 years, regardless of that individual's age. Again, the reforms we have included in our bill closely track the reforms proposed by President Obama's administration.

Finally, let me just say this program has proven to be highly vulnerable to fraud. GAO reported as recently as November that the vulnerabilities in the program increase the risk of claimants receiving benefits they are not entitled to. There are many reasons for that. I will go into that further at another time. But the Department of Labor inspector general reported that the removal of a single fraudulent claim saves, on average, between $300,000 and $500,000. What is more, these vulnerabilities are not new and they are not rare. When the IG looked at 10,000 claimant files one decade ago, there were irregularities in almost 75 percent of them, and it resulted in benefits being reduced or ended for more than 50 claimants.

This is a troubled program. It needs to be reformed. It needs to be made more fair. It needs to be more fair to individual workers. There needs to be more of a focus on return to work, and it needs to be more fair to workers who spend their entire careers working for the Postal Service or the Federal Government and then retire and receive a far lower benefit than an elderly individual who remains on workers' comp.

I urge the defeat of the amendment.

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