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

Floor Speech

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Ms. COLLINS. Mr. President, I am only going to speak very briefly. I wish to shine a spotlight on a provision of Senator McCain's substitute that has not yet been discussed that actually raises constitutional issues.

All of us believe the labor force of the Postal Service is too large and unfortunately will have to be reduced, and we do that through a system of buyouts and retirement incentives through a compassionate means very similar to the way a large corporation would handle the downsizing of its employees. But Senator McCain's alternative takes a very different approach. It would have this new control board that would be created to impose on the Postal Service an obligation to renegotiate existing contracts to get rid of the no-layoff provision.

I will say I was very surprised when the Postmaster General signed the kinds of contracts he did this spring. The fact is Senator McCain's amendment--section 304 of which amends section 1206 of existing law--requires existing contracts to be renegotiated. That creates constitutional questions. The potential constitutional issue derives from the contracts clause of article I, which prohibits States from passing laws impairing the obligation of contracts. Of course, this provision does not apply to the Federal Government. The Congressional Research Service has explained in a memorandum to me on this topic in July of 2011 that the due process clause of the fifth amendment has been held to provide some measure of protection against the Federal Government impairing its own contracts. I ask unanimous consent that the CRS memorandum I just referred to be printed in the Record.

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

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Ms. COLLINS. There is also a Supreme Court case, Lynch v. The United States, which makes clear that the due process clause prohibits the Federal Government from annulling its contracts and the United States is as much bound by its contracts as are private individuals.

In the landmark case of U.S. v. Winstar decided in 1996, the Supreme Court cited Lynch for the proposition that the Federal Government ``has some capacity to make agreements binding future Congresses by creating vested rights,'' even though the Contract Clause does not directly apply.

Obviously, one Congress cannot bind another, and no Federal agency can bargain away the right of Congress to legislate in the name of the people. But no one would ever sign a contract with an instrumentality of the Federal Government if that contract could be rewritten by Congress at will.

Recognizing this, the courts have distinguished between acts which affect contracts in general, where the Federal Government is exercising its sovereign powers, and acts directly altering the obligations of contracts to which the Federal Government is itself a party.

The Winstar case I mentioned before illustrates this distinction. Winstar was brought by a financially healthy Savings & Loan institution that was asked by Federal regulators to take over failing thrifts during the S&L crisis of the 1980s. After Winstar entered into a contract with the Federal Savings & Loan Insurance Corporation stipulating that it could count the ``goodwill'' of the thrifts it took over to offset the liabilities it was assuming, Congress changed the underlying law. Based on that change, the regulators reneged, declared Winstar ``inadequately capitalized,'' and seized its assets.

In that case, the Supreme Court held that even though Congress had the right to change the law in general, the Federal Government could still be liable for breach of contract it had entered into with Winstar, and for damages.

I am concerned that if the Postal Service reopens and renegotiates its collective bargaining agreements to comply with the McCain amendment, courts could find the Postal Service in breach of those agreements, and force it to pay damages.

At a minimum, it strikes me that Senator McCain's language could tie up the Postal Service in litigation for years, which would defeat our efforts to reduce the workforce costs faced by the Postal Service.

Bottom line: I am very concerned that if the Postal Service is forced by the McCain substitute to reopen and renegotiate current collective bargaining agreements, the courts would find the Postal Service in breach of those agreements and force it to pay damages and also that it would be found to be unconstitutional. The approach we have taken does not raise those constitutional concerns. It does not have Congress stepping in to abrogate contracts, which is a very serious and potentially unconstitutional step for us to take.

Finally, I would say I agree with everything my chairman has said. Senator McCain's amendment does not address the true problems of the Postal Service. Instead, it assumes that the Postal Service is obsolete, that they cannot be saved, and that we should just preside over its demise. I reject that approach.

Thank you, Mr. President.

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