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June 5, 2021
Following are highlights from the speakers at NAPS’ April 18 virtual LTS:
Sen. Gary Peters
Chairman of the Senate Homeland Security and Governmental Affairs Committee
Executive Vice President Ivan D. Butts introduced Sen. Gary Peters, describing him as a strong advocate for working men and women who has emerged as an outspoken proponent for Postal Service operation transparency. Butts noted the employees of the Gary Peters Postal Service are fortunate Peters is at the helm of the Senate Homeland Security and Governmental Affairs Committee, which has jurisdiction over the Postal Service.
Peters thanked NAPS members for their hard work, noting they have gone above and beyond to serve the American people during this difficult year. He said it’s an honor to continue fighting for the Postal Service as chairman of the Senate committee.
As chairman, Peters said he will work to pass postal reform legislation that strengthens the agency and ensures it can continue serving Americans for generations to come. “I’m also working to ensure the Postal Service has qualified and bipartisan leadership,” he vowed. “I look forward in my committee considering three nominees for the Postal Service Board of Governors.” [Peters’ committee approved the nominees on April 28.]
Peters stressed the need to continue holding USPS leadership accountable and ensuring transparency.
“You deserve to know exactly how changes will impact your ability to contine serving your communities,” he said. “Thank you again for all that you do in Michigan and all across our country.”
Rep. Gerry Connolly
Chairman of the House Oversight and Reform Subcommittee on Government Operations
Butts next introduced Rep. Gerry Connolly, calling him one of NAPS’ closest allies in Congress. Connolly is a senior member of the House Oversight and Reform Committee and chairman of the Subcommittee on Government Operations, with jurisdiction over Gerry Connolly the Postal Service. Of particular note, he has introduced H.R. 1623, the “Postal Supervisors and Managers Fairness Act,” and H.R. 1624, the “Postal Employee Appeal Rights Amendment Act.”
The congressman referenced the agency’s recently released 10-year plan, pointing out he does not share that vision, specifically increasing postal rates and downgrading service standards. “I am working with Chairwoman Carolyn Maloney and others in Congress to offer real solutions to put the Postal Service on solid financial ground and transform it so it can continue serving this nation admirably, as it has done during the pandemic,” he asserted.
Butts asked, “How do we move forward with this plan in place; what are our next steps, legislatively?”
Connolly responded, “Let me start with the premise that it’s a novel business model to reduce your service standards and delivery time and raise prices at the same time. Call me a skeptic, but I don’t think it’s going to work. In fact, I think it’s going to continue to contribute to the deterioration of the postal system.”
He highlighted some of the financial reforms in the 10-year plan that came from Congress—including getting rid of the prefunding mandate and integrating retiree health benefits with Medicare—that could help stabilize the agency. “But, when you get to service standards, what they’re doing is codifying the deterioration they have managed,” he pointed out.
As far as trust in the agency, Connolly asked, “Who would have thought the Postal Service would be in headlines in newspapers and cable and network news for months? Because of the deterioration in service caused by changes Postmaster General Louis DeJoy made last summer, public confidence was eroded in the mail system as a reliable way to return election ballots to be counted. Why would I trust that same individual to have the best interests of the Postal Service at heart with this 10-year plan?”
Butts asked how he thought the 10-year plan could impact the trajectory of any postal reform legislation.
Connolly affirmed the 10-year plan will be part of the debate. Regarding the financial elements, there is broad agreement—certainly on the Democratic side—these initiatives need to be done to help return the agency to solvency or at least put it on the path. Congress created the problem of the prefunding mandate, which creates a $5 or $6 billion debit overhang each year; Congress needs to fix it. Medicare integration for retirees also would have a positive financial impact on the Postal Service’s solvency.
The fight will come, though, with standards of delivery, modes of transporting mail volume and new service rates, Connolly said. “I believe it’s a model designed to fail and that will hurt the Postal Service and cost us customers. When the lack of reliability becomes permanent in terms of how many days it takes for delivery, I think you’re going to see customers use alternative means of delivery, which means revenue goes down.”
Butts reiterated the importance of service restoration and confirmed Connolly’s sustainable steps for moving forward. He asked Connolly if he thought House leadership was prioritizing postal legislation.
Connolly said he’s been frustrated during the pandemic: Over $5 trillion in economic relief has been pumped into the economy, but there were zero dollars for the Postal Service—just a $10 billion line of credit. Ultimately, Congress made that line of credit a grant. But, he pointed out, the airline industry twice has been the recipient of billions of dollars in order to keep people working and making sure airlines are still there after the pandemic.
“The Postal Service has been functioning every day during the pandemic,” Connolly declared. “In fact, it is the one constant in our lives. We can’t go to work, can’t go to school, can’t go to restaurants, can’t meet. Our lives are upended. But the one constant is our mail gets delivered at the same time, every day, by our letter carriers.
“I expect that, somehow, in a pandemic, that part of our lives should not be disrupted. I think that says something enormously positive about the men and women who work for the Postal Service, but we can’t take that exemplary service for granted.
“The public was alarmed when the PMG made the changes that were disruptive and caused delays. The agency is a beloved institution and the public understands its criticality, especially in a pandemic.
“So, I’ve been disappointed that, despite the rhetoric supporting the Postal Service, no action has been taken. Why did the Postal Service drop out as a priority? We still have to wrestle with postal issues. I hope, as we are emerging from the pandemic, we look to the future. The good news is solutions are at hand.
“Congress needs to pull together the political will to ensure we have a 21st century business model that keeps the Postal Service serving the American people every day.”
Butts asked the congressman what his priorities would be if he were postmaster general.
Connolly said he first would ensure the safety and health of the workforce. During the pandemic, thousands of postal employees have contracted COVID-19, been exposed to it and been quarantined, not to mention the deaths of some employees. So, safety would be the first priority.
Next, listening to the men and women of the Postal Service would be critical to understanding how to effect change. And listening to customers regarding what they need and expect—how best to meet the demands of the customers the USPS serves. Then, expanding business opportunities for the agency.
Connolly affirmed First-Class Mail no longer can be relied on as the primary revenue, but there are big opportunities with the expanding package business. “Let’s explore,” he proclaimed, “and let’s liberate the Postal Service to make changes.”
Butts asked Connolly if a bipartisan postal reform bill could be enacted; if so, how broad or narrow should it be?
Connolly referred to the unanimous, bipartisan reform bill that came out of committee a few years ago, but, at the time, Republican leadership did not bring the bill to the floor for a vote. “What a missed opportunity!” he professed. Since that time, the dynamics in Congress have changed and there continues to be much less consensus between the parties.
Connolly indicated he is less hopeful for achieving bipartisan consensus, but that doesn’t mean you stop trying. “I believe there’s an opportunity,” he affirmed, “and NAPS members can play a key role in trying to educate Republican members, especially those from rural areas, how, if anything really bad were to affect postal delivery service, the first areas most vulnerable would be rural America. I think many of them understand the threat and challenge and are poised to be supportive. There are opportunities, but it’s not the same political climate we had just a few years ago, unfortunately.”
Butts asked Connolly what role he thinks President Joe Biden should play in revitalizing the Postal Service.
The congressman responded he would revisit the entire Board of Governors and start with a clean slate. The leadership has to be competent and committed to the Postal Service. Connolly said the president has shown in past statements that he is committed to making sure the agency is put back on the road to solvency.
Almost immediately after President Biden took office, he nominated three persons to fill vacancies on the board. “I think that was a clear signal of his commitment,” Connolly asserted. “I look forward to working with him on reforms that can enhance delivery standards for the American people and restore solvency.
“I think we’ve all done—all of us who are advocates, including, of course, NAPS—a good job in elevating postal issues in terms of what the priority should be for a new administration. We’ve been pretty successful in doing that.”
Butts asked what role NAPS members can plan in advancing responsible postal reform legislation.
Connolly opined that most members of Congress are neither really conversant with the intricate issues the agency is facing; nor are they familiar with its legislative history. As a result, members are not particularly aware of the challenges confronting the Postal Service.
“We no longer write a letter to mom,” he pointed out. “We email her and that’s had a huge impact on mail volume and revenue. That’s a challenge, but it’s also an opportunity to educate.
The more we have NAPS members knocking on doors—or virtually knocking on doors—to talk to their member and staff about postal reform and the importance of the Postal Service, it’s an opportunity to get more congressional adherence to the cause. I strongly urge every NAPS member to take that opportunity any time they can.”
Butts affirmed it’s a new environment, but it’s so important to reach out and educate legislators. He asked Connolly to talk about his reasons for introducing H.R. 1623 and 1624.
Regarding 1623, the “Postal Supervisors and Managers Fairness Act,” Connolly referred to the current statutory timeline for consultation that can delay obtaining a new pay package for two years. Once an agreement is ratified, there’s no redress for lost income during those two years. “I think that’s an injustice and clearly has to be addressed,” he said. The bill also requires the Postal Service to adhere to findings issued by a Federal Mediation and Conciliation Service fact-finding panel should pay consultations reach an impasse.
H.R. 1624 would ensure all Postal Service EAS employees have appeal rights to the Merit Systems Protection Board (MSPB). “Every federal employee should have access to the agency that Congress designed to ensure the protection of invaluable merit system principles that value expertise—not political loyalty,” he explained.
Connolly also has introduced a separate bill to reauthorize the MSPB. During the previous administration, the board had no quorum, which is required, under law, in order to do any business. As a result, there is a tremendous backlog of cases. Connolly and Rep. Jody Hice (R-GA), the ranking member of Connolly’s subcommittee, sent a letter to President Biden, urging him to swiftly nominate a board. Butts confirmed NAPS has cases tied up as a result of the MSPB’s lack of a quorum.
Butts asked Connolly to talk about postal services in Northern Virginia, where Connolly lives.
Connolly said he received anecdotal stories, such as a Christmas card that was mailed mid-December, but didn’t get delivered until Jan. 20. But when empirical evidence was examined, on-time deliveries of two-day mail decreased more than 7%; on-time deliveries of three- to five-day mail decreased more than 16%. “That’s affecting everybody right now,” he stressed. “That’s affecting getting your medications on time and business and commercial transactions. The level of concern and complaints has risen. It’s not at panic level, but we’ve clearly seen the deterioration in service.
“Everyone understands the circumstances of a pandemic are unique and, hopefully, are going to go away soon. But they make everything more difficult. Having a consistent pattern of decline is a real concern and highlights why I think it is so dangerous to take those numbers, decide to quantify them and then make that the new service standard, while raising rates. In districts such as mine and others across the country, that’s a no-go.”
Butts thanked Connolly for taking time to speak to NAPS members. “You are a tremendous resource,” Butts offered.
“My hat is off to NAPS and your membership, Ivan, about the election. Lots of doubt was planted about how the mail could not be relied on. But, in my district and districts all across America, a number of postal managers and supervisors quietly talked to their local election boards to make the delivery of ballots a priority.
“In some cases, there were extraordinary measures taken to deliver ballots by postal employees to ensure they were counted and treated like absolute First-Class Mail. We had one of the largest voter turnouts in 100 years and a big part of that was because balloting by mail succeeded.
“We had one of the most problem-free national elections with the largest turnout in memory. A lot of that credit goes to the men and women you represent and I want to thank them on behalf of the country. They did it with integrity, under difficult circumstances and it worked. The American people are truly grateful.”
“Speaking for our over 27,000 members,” Butts added, “we thank you for your kind words. That is why we are; we are here to serve America. And with champions like you working for us on Capitol Hill, we will make sure we have a sustainable Postal Service as we move forward.”
Postal Regulatory Commission Chairman
Butts next introduced Michael Kubayanda, chairman of the Postal Regulatory Commission. Kubayanda was confirmed by the Senate in 2019 as a PRC
commissioner, then designated chairman by President Biden in January and confirmed by Michael Kubayanda the Senate. He is a longtime friend of NAPS, having worked with the association when he was on the staff of the House Oversight and Government Reform Committee and in the office of the Postal Service Inspector General.
Kubayanda thanked NAPS members for the great work they have done in keeping the Postal Service running over the past year since the pandemic. “We really appreciate it,” he declared. “Your service should never be forgotten.”
He explained to NAPS members that the PRC was created in 1970 as part of the Postal Reorganization Act. The Postal Service Board of Governors oversees operations, while the PRC oversees the regulation of prices and services, similar to how a public utility commission would oversee a local utility.
The PRC’s five commissioners are nominated by the president and confirmed by the Senate. No more than three commissioners may come from one political party, which encourages the commissioners to work in a bipartisan manner.
“I think we’re good at that,” Kubayanda affirmed. “On most issues, there is widespread agreement. Where we disagree, we do a good job of coming together, hashing out our disagreements and coming up with reasonable solutions. There’s a tradition of bipartisanship and collegiality that started under my predecessors and it’s something that, as a new chairman, I hope to continue.”
Since the summer of 2019, the PRC has had a full slate of five commissioners. Kubayanda said they all are well-qualified and work well together. He explained a lot of their work is highly technical; there are a variety of economic, accounting, financial and statistical issues and a lot of complicated legal issues.
The commission has to be guided by its substantive analysis of those matters. “There’s a lot of opinions floating around on postal issues right now,” he pointed out, “but we want to be guided by our substantive analysis and provide insights so people can have well-informed opinions.”
The agency has fewer than 80 employees. “Given the scope of postal issues and how large the Postal Service is and how it touches every American, I think we’re highly productive, given our size,” Kubayanda stressed.
He talked a little about his background, which includes having worked for a short time at L’Enfant Plaza, as well on Capitol Hill. He also spent time work-ing for the Postal Service Office of Inspector General.
Kubayanda said the most influential part of his background is probably the time he spent at the OIG. “It is a well-respected oversight organization that over-sees the Postal Service,” he explained. “I worked under great leadership there, took a lot of careful notes and learned a lot.
“The number one thing I learned is you need great people. When you’re working on these really difficult issues, you want the best group of people around you and put them in a position to succeed; that’s my primary focus as chairman.”
Kubayanda indicated he wants to include perspectives from the stakeholder community regarding decisions the commission makes, while also focusing on the needs of customers. His two main focuses are substantive, rigorous analysis and customer experience.
Over the past year, the Postal Service saw a decrease in market-dominant volume, but a significant increase in package volume driven by e-commerce. “We’ve known for some time that the potential USPS market for e-commerce is in the trillions of dollars,” Kubayanda indicated. “The growth we were expecting over the next decade has occurred in a matter of months just over the past year. It appears the volume will remain, which presents opportunities in terms of revenue, but also challenges in terms of operations.”
He said the Postal Service has played an invaluable role helping to bind the nation together during the pandemic. “We saw businesses close their physical locations; the only way they could continue operating and reach their customers was through remote means,” he said. “The Postal Service stepped up to meet that need for Americans who could not safely obtain items in person.”
Kubayanda predicted that, as the country comes out of the pandemic, businesses still will see the need for the USPS in terms of delivering packages, but, also, marketing mail to reach their customers and let them know they’re back. The Postal Service clearly has a role in that.
He also referenced the critical role the agency played in the fall elections that were safely conducted, largely due to the Postal Service. “We need to congratulate and thank supervisors, management and craft employees—everyone involved—for the amazing role the Postal Service played over the past year,” he de-clared.
Despite the pandemic, the PRC continued its work without interruption, working remotely. The downside is the commission has not been able to meet in person with each other or with stakeholders. Regardless, the PRC had a productive year. For example, it approved hundreds of new, negotiated service agreements, as well as extended agreements.
Kubayanda said he was very proud the PRC issued its 10-year review of price regulations as required by the 2006 Postal Accountability and Enhancement Act (PAEA). Completed on time was last year’s annual compliance process, which is the commission’s core compliance product. The commission currently is in the middle of that process; another annual compliance determination was recently published for 2020.
“The events of last year clearly affected service,” he observed. “Of the 22 market-dominant products, only five met their applicable service standards last year. So that’s something we’re going to keep an eye on going forward and, working with the Postal Service, make sure those products are brought back into compliance.”
Also last year there was an acceleration in the decline in density in the postal network—the number of mail pieces going to each delivery point. When the PAEA was passed in 2006, there were about 1,400 pieces of mail going to each delivery point per year, on average. Last year, that dropped to about 800.
“That’s a huge difference,” Kubayanda affirmed. “Obviously, it has a huge impact on the economics with the postal network. That’s something we watch closely and took into account in the 10-year review I mentioned.”
Looking toward the rest of this year, Kubayanda said he hopes to resume normal in-person operations. Another key priority for him is funding for the commission. “We are a $17 million organization overseeing an $80 billion Postal Service,” he stressed. “The effects of that gap come to light at times like this when there are so many huge issues in front of us. If we’re going to be able to adequately deal with these challenges, sufficient funding for the PRC is a top priority.”
There will be some high-profile issues over the coming months and next year. Kubayanda said the highest profile likely will be the advisory opinion process. Anytime the Postal Service wants to make a change in service that will have a nationwide impact, the agency has to seek an advisory opinion from the PRC. The 10-year plan just announced by the PMG and the Board of Governors includes some measures that will require advisory opinions from the PRC.
“Once we get a request for an advisory opinion,” he explained, “we have 90 days to complete the process. The key term here is ‘advisory.’ The law gives us the mandate to provide advice, but it’s advisory only; we don’t have veto power. But the advisory opinion is important and the Postal Service has to take it into account. So, we stand ready to work on that. We are expecting to be very busy with that this year.”
Also in the coming months, the PRC will deal with the issue of allocating institutional costs—those costs not attributable to one particular product, but are common to providing postal service in general. The commission has to figure out the rules for how to allocate that between the market-dominant side and the competitive side. It’s important because the competitive side sets the price for the package market. The PRC issued a rule on that before Kubayanda joined the commission. It was appealed to federal court and remanded to the PRC last year. That will have to be revisited in due time.
Another important issue is performance-based regulation—how to, or whether to, address efficiency, service standards and service performance within price regulations. This issue was originally addressed as part of the PRC’s 10-year review of price regulations. Due to stakeholder comments, that issue was pulled out and dealt with as a separate rulemaking on performance-based regulation.
“Obviously, the events of the past year and the service disruptions really highlight this issue’s importance,” he affirmed. “So, we will be revisiting that; for us, it’s a top priority.”
Kubayanda said he looks forward to NAPS’ participation. “Your insights are absolutely critical to us as we deal with all the problems facing the postal system.”
Categories: The Postal Supervisor