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Apr 25 2012


Bill Would Save Hampden Plant, Right Size USPS

WASHINGTON, D.C. - The United States Senate today overwhelmingly passed legislation, authored by Maine Senator Susan Collins, that would reform the U.S. Postal Service and save the Eastern Maine Processing Center in Hampden that had been slated for closure by the Postal Service. The bill passed by a bipartisan vote of 62-37.

The Postal Service has lost more than $13 billion during the past two years, and by the end of this year, its statutory credit limit of $16 billion will be maxed out. Driving this crisis are many factors, including first-class mail volume has fallen by 26 percent since 2006 and continues to decline. Reflecting that sharp drop in volume, revenue has also plummeted from $72.8 billion in 2006 to $65.7 billion in 2011. The Postal Service is at great risk of not being able to make payroll by this fall, according to the Postmaster General himself.

To remedy this crisis and put the USPS on solid financial footing, Senator Collins' bill would give the Postmaster General the tools to compassionately downsize the postal workforce to match the declining mail volume. The bill gives the Postal Service the tools to eliminate more than 100,000 positions -- or about 18 percent of the workforce -- over the next three years, saving an estimated $8 billion annually, through employee buy-outs and early retirement incentives. The incentives would be funded by the return of overpayments made by the Postal Service into the Federal Employee Retirement System. These are not tax dollars; the payments were made from the Postal Service's revenues and postal employee contributions.

For the first time in 35 years, the bill also overhauls the federal workers' compensation across the entire federal government by reducing costs, cracks down on fraud, making the system fairer, and encouraging a return to work for employees who are able to work.

The bill encourages the Postal Service to operate more like a business: by cutting internal costs first instead of driving away customers with deep service cuts or steep price hikes. Specifically, Senator Collins' legislation prevents the Postal Service from eliminating Saturday service for at least two years and then only if the Government Accountability Office and Postal regulators certify that it is necessary to ensure solvency.

The bill includes a one-year moratorium on closures of small, rural post offices unless there is no significant community opposition to the closure. It encourages the Postal to work with the community to explore options such as co-locating a post office within a retail store or sharing space with government agencies.

Senator Collins authored a key provision that would result in the continued operation of the Eastern Maine Processing Center in Hampden by mandating certain overnight delivery standards in some areas. In Maine, reliable overnight delivery service would be impossible without both the Eastern Maine facility in Hampden and the Southern Maine plant in Scarborough. The Hampden plant could not be closed as long as these standards become law.

The Postmaster General originally proposed elimination of 223 of the 461 postal processing facilities around the country. Senator Collins' bill would spare 86 of those that were slated for closure because they would be needed to meet the overnight delivery standard, thus leaving 324 plants around the country, including the two in Maine.

"This is an important victory for the U.S. Postal Service, the American economy, and customers who rely on dependable and universal postal service" said Senator Collins. "It is also great news for employees at the Hampden plant, and for the businesses and residents of northern, eastern, central, and western Maine. The overnight mail requirements included in our bill will necessitate keeping the Hampden mail processing center open. As I have argued for a long time, given the geography of our State, both plants - in Hampden and Scarborough -- are clearly essential.

"In recent months, we have seen the Postal Service announce a number of draconian measures including the intent to close hundreds of processing plants and implementing disastrous service standard changes. Our bill takes a far better approach that helps the Postal Service right size its excess capacity, while still maintaining what is one of the most valuable assets to the Postal Service: its ability to deliver mail overnight to many areas.

"Today's vote is also a win for bipartisanship. Americans are rightly frustrated about what many feel is a dysfunctional Congress. With enormous problems facing our country and Congress having little to show by way of accomplishments, the process we've just completed on this bill demonstrates Senators can work together. Today, we see that progress can occur when Republicans and Democrats work together; when Senators from big states and small find common ground. We can achieve important policy for those who sent us here."

The Postal Service is the linchpin of a $1.1 trillion mailing and mail-related industry that employs nearly 8.7 million Americans in fields as diverse as direct mail, printing, catalog companies, magazine and newspaper publishing, and paper manufacturing.

Nearly 38,000 Mainers work in jobs related to the mailing industry, including thousands at our pulp and paper mills like the one in Bucksport, Maine, which provides paper for Time magazine.

The bipartisan "21st Century Postal Service Act" is authored by Senators Susan Collins and Joe Lieberman, Ranking Member and Chairman of the Senate Homeland Security and Governmental Affairs Committee, along with Senators Tom Carper (D-DE) and Scott Brown (R-MA). The House of Representatives must now pass postal reform legislation and then President must sign it.