United Postmasters and Managers of America 2019 Legislative

United Postmasters and Managers of America 2019 Legislative Summit

Who is UPMA? • The United Postmasters and Managers of America (UPMA) represents Postmasters and other USPS Managers, both active and retired. • UPMA members manage approximately 25, 000 post offices and many other postal facilities in every city in America. • • • Processing and Transportation Retail and Delivery Support

The United States Postal Service • USPS receives no taxpayer funding. • The $1. 4 Trillion mailing industry • • Employs 7. 5 Million Americans Nation’s top employer of Veterans • The USPS delivers to • 159 Million businesses and residences • • Added 1. 4 Million in 2018 (Houston, TX ) At least 6 days a week • • • Rural Suburban Urban

The United States Postal Service • The Postal Service is consistently the highest rated agency of the Federal government in non -partisan opinion polls. • Postal employees serve as the eyes and ears of the Nation’s communities and often the first responder in situations involving • • • Health Safety Crime

The Postal Predicament • Through statute, Since 2007, the USPS has been assessed $5. 5 B per year to prefund retiree health benefits 75 years into the future. • USPS was charged $6. 7 billion in 2018. • No other private or public entity is required to fully prefund future retiree health benefits. • About 90% of USPS reported losses results from prefunding requirement.

The Postal Response • Reduced the Postal career workforce • • Right sized the delivery network, through closings and consolidations and hour reductions. • • • 800, 000 peak (2000) 700, 000 PAEA (2006) 500, 000 today 140 Processing Center Closings 13, 000 Postmaster positions eliminated Rural access to Postal Services reduced Continued to achieve record breaking service levels nationwide. The USPS is continually the most trusted federal agency.

Presidential Task Force • Universal Service Obligation. • Need to define but did not provide one • Frequency and Mode of Delivery • Eliminate Collective bargaining • Postal salaries have risen at a slower rate than in the Private Sector • Privatization • Not definitive • Model after foreign Posts

Presidential Task Force • Foreign Posts • Nationalized healthcare • Suggests that Service would go up and cost would go down • USPS is actually cheaper, more efficient and much larger than all foreign Posts • Modifying/Eliminating Mailbox Monopoly • Monetize through licensing • This would need legislation

Legislative Action Needed • Reduce the harm done by the prefunding requirement. – Reduce USPS Liability by Integrating Medicare and FEHBP for Medicare-Eligible Retirees. – Calculate USPS Pension and Health Care Liability on current Postal-specific data. • Postal Governance – Confirm nominations to the BOG and the PRC – Reform the USPS governance structure to improve decision making. 9

Legislative Action Needed • Encourage Product and Service Innovations. – Modernize Business Model – Ship Beer and Wine – Government Services • Aid US Census Bureau • Supplement ID requirements • Local or State Government programs • Rural Post Office Hour Reduction Pause • Expand MSPB Appeal Rights to all USPS Managers (Bill introduced-HR 597) 10

USPS Rate Setting Needs Revision • Under current law, postal rate increases for Market Dominant products must be no greater than the rate of inflation, as determined by the Consumer Price Index for All Urban Consumers or CPI-U • Competitive products must produce sufficient revenues to ensure they are not subsidized by Market Dominant products. • CPI-U for 2018 was 2. 3% • Fed. Ex 4. 8% UPS 5%+ Plus fuel surcharges

USPS Rate Setting Needs Revision • In 2013, PRC approved 4. 3% “exigent” rate adjustment to offset recession-related revenue loss. • The exigent rate increase expired, the recession-related mail loss did not return, USPS lost $2 BN revenue in FY 2017. • On January 27, 2019, there was a rate increase which “overall” fell within the legal limits. • Postage CPI-U cap should be replaced with CPI -D index reflecting delivery-industry price adjustments.

Postal Board of Governors • Law establishes 11 -member Board of Governors – PMG and Deputy PMG are members – 9 Governors are supposed to be presidentiallynominated and Senate-confirmed, currently there are only 2 (4 more nominations sent early January) – Vacancies hinder operations, planning and governance • Urge President to nominate and the Senate to confirm qualified Governors 13

Continue to Protect Us from Previously Proposed Budget Cuts • Oppose increasing FERS contributions • 1% per year for next 6 years (Proposed) • Oppose eliminating FERS COLA • Oppose reducing CSRS COLA by 0. 5% • 0. 5% reduction (Proposed) • Oppose reducing rate-of-return on TSP’s G-Fund • Oppose changing annuity formula • High 3 years to the high 5 (Proposed) • Oppose use of chained-CPI to calculate retirement COLA

The Equal Treatment of CSRS Annuitants • The Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) unfairly reduces Social Security benefits for many CSRS annuitants. • Rep. Rodney Davis (IL 13 th) introduced H. R. 141 to amend title II of the Social Security Act to repeal the GPO and WEP. • Now (1/25) Co-Sponsored by 28 Republicans and 45 Democrats from 31 States and DC. • UPMA fully supports HR 141

House Resolution 33 • Sense of the House that Congress should ensure the USPS is not subject to privatization. • Introduced by Rep. Stephen Lynch (D-MA-8) • Original Co-Sponsors included 5 Republicans and 7 Democrats • Now (1/25) 80 Co-Sponsors • 73 Democrats and 7 Republicans • Privatization would result in • • Higher Prices and Reduced Service Jeopardize the booming e-commerce sector

The Post Office and American business • Small business, in particular, rely on the USPS. • The USPS is the only way some small businesses can deliver goods to customers. • Fed. Ex, UPS, Amazon and others could not have grown the small package sector without the USPS and Universal Service. • The Postal Service scores better in service that its direct competitors. • Support the strengthening of the Postal Service in order to continue to help these entities.

The future can be bright. • The Service has acted responsibly in reducing costs and not service. • UPMA members, especially, have helped in that cause. • We have shown that we can survive even in the face of difficulties not of our making. • With a few tweaks the USPS can begin to grow and prosper. • However, NOT WITHOUT YOUR HELP.

Thank you for your time.