Highlights of the Postal Reform Act

Postal BRAC: Creates the Commission on Postal Reorganization to eliminate costly excess capacity and facilities. Over its first year the CPR will recommend closures worth $1 billion/year for post offices. Over the second, it will recommend $1 billion/year closures for mail processing and a 30% reduction in management facilities. Solvency Authority: Creates an Authority modeled on and named after the DC Control Board with a mandate to cut costs, protect universal service, and return USPS to financial solvency. The Authority is triggered into existence when USPS goes into default on any obligation to the federal government for more than 30 days. It has the authority to require renegotiation of existing collective bargaining agreements and the power to unilaterally modify those agreements if renegotiation fails. To accomplish its mission, the Authority may use a supplemental borrowing authority of $10 billion, backed by USPS property as collateral. 5-Day Delivery: Allows USPS to move to 5-day delivery of mail. Pay Comparability: Clarifies existing law to include wages and benefits in determining total compensation comparability with the entire private sector. Health and Life Insurance: Requires USPS employees to pay the same health and life insurance premium percentage as other federal workers. This provision is phased in to apply to union employees after their current bargaining agreements expire. Mediation Arbitration: Modifies the collective bargaining process to the 2003 Presidential Commission recommended mediation-arbitration process. Also requires arbitrators to take into account total compensation comparability and the financial situation of the Postal Service in any decision. Cost Coverage: Requires all market-dominant products to cover costs, while maintaining the CPI price cap.

Underwater Products: For classes below 90% cost coverage, rates are increased by 5% annually above the price cap. Non-Profit Discount: The non-profit advertising discount is reduced by 5% a year from 40% to 10% of the most closely corresponding class. Political Committees: Ends the rate preferences for national and state political committees. Advertising: Authorizes USPS to sell advertising space on USPS facilities and vehicles. All advertising must maintain at least 200% cost coverage and be consistent with USPSs integrity. State Government Services: Authorizes USPS to provide services for state governments that enhances USPSs value to the public. Such services must not interfere with or detract from the value of postal services. Contracting accountability and transparency: Reaffirms accountability for delegations of contracting authority and requires their disclosure when outside the functional contracting unit. Requires disclosure of most noncompetitive purchase requests above $250,000. Contracting ethics: Requires USPS to establish regulations to prevent conflicts of interest in the contracting area, with ethics officials reviewing any ethics issues that arise.

Read a copy of H.R. 2309, the Postal Reform Act, here.