Mr. Speaker, I rise today to call my colleagues' attention to an urgent issue that we must address in the opening months of the next Congress.
Early next spring, the Postal Service will file for a rate increase, to be implemented in 2006. Unless Congress acts, that rate increase will be one of the largest in history--at least 15 percent, or 6 cents on a First Class stamp. That will cripple an industry already in trouble, and reverberate through our entire economy.
It would be irresponsible and reckless for us to sit back and do nothing.
The Postal Service is the center of a $900 billion industry, employing 9 million Americans in such diverse fields as manufacturing, advertising, publishing, and finance. This industry comprises 8.5 percent of the Gross Domestic Product.
The cost of doing nothing will be steep, for the Postal Service, for the 9 million Americans whose jobs rely on the mail, and for every American who sends a birthday card, pays a bill, or orders something from a catalog or online.
Reforming the Postal Service is a crucial responsibility. The Postal Service operates under a rigid, 30-year-old legal structure that does not take into account the technological advances of the past decades. It is saddled with nearly $70 billion in retiree health costs, worker's comp claims and pension payments. Each year, the labor and infrastructure costs facing the Postal Service rise, while the volume of mail continues to fall. This is a ``death spiral'' that can only be reversed by Congressional action.
Let me make clear what will happen if we fail to act. A failure to act is the equivalent of a back-door tax on every sector of the American economy.
A small business that now spends $5,000 a year on postage would be hit with a nearly $1,000 rate increase. And an industry like financial services would get slammed with an increase of over $600 million in postage costs annually.
Even though we're trying to postpone Internet taxation, a failure to act would raise the cost of online purchases, because consumers will pay more for shipping and handling. Overall, the American public and American businesses will waste over $20 billion in unnecessary payments to the Postal Service over the next decade.
This does not have to happen. We have the framework for responsible, comprehensive Postal Reform in the form of legislation that has been approved unanimously by my committee, the Government Reform Committee, and by the Senate Governmental Affairs Committee.
This legislation will force the Postal Service to act more like a business, while also resolving two issues related to the Postal Civil Service Retirement System Funding Reform Act of 2003. This act placed an unusual burden on the Postal Service, making it the only major agency in the government responsible for funding the military portion of its employee retiree benefits. The Act also required the Postal Service to place into escrow any money saved through the legislation-- and I believe we should free this money, to allow the Service to make some cost-reducing and productivity-enhancing capital improvements.
I have worked with the Government Reform Committee's ranking minority member, Henry Waxman, as well as Representatives John McHugh and Danny Davis to craft legislation that will allow the Postal Service and the industry that relies on it to survive well into this century.
I urge my colleagues to come back next year ready to pass meaningful Postal Reform. There are critics who will say the bill costs too much. I say the cost of not acting is what we really cannot afford.
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