Bailout the Post Office?
Rep. Dennis Ross on the state of the Post Office and reformation
- Duration 6:21
- Date Sep 15, 2011
Rep. Dennis Ross on the state of the Post Office and reformation
Also in this playlist...
This transcript is automatically generated
And double talk now about the post office it's been in big trouble ever since the Internet even just email.
You know people are using email to.
Correspond with -- each other and they're just a big issue and now.
People are saying that they need -- bail -- the Postal Service.
-- right now is Republican congressman from Florida Dennis Ross to talk about whether or not.
The federal government should sponsor -- bail out of the post office or whether it should.
Find a way to support itself thank you for joining us congressman.
Thank you -- thank -- for Obama to be here.
So I'll be arguments that the post office is making is that it's complicated legal argument but that they'll -- back in the day there was some agreement made.
For retirement benefits and that their food get.
Fifty at least plus billion dollars in up Alex before and that's want to explain element more.
-- be delighted to back in the seventies and early seventies when the postal department was transferred over to the Postal Service that we know today.
There was an agreement made and then the postmaster general said you know as part of this agreement.
We want to make sure that we adequately and properly fund our our health care and our retirement.
And an agreement was made to -- a for formula to find -- in addition to that formula.
The federal government conveyed all the assets without liabilities to the Postal Service and gave a monopoly to the Postal Service so there was a large package.
Fast forward some forty years later there's an argument being made without any merit that there's a seventy.
Billion dollar overpayment.
You know -- -- the that one thing that that the concerns me about this is that.
There's no basis to it but furthermore.
This was agreed to by the post office over forty years ago.
That is not going to solve the problem even if we all agree that there was a an overpayment.
The problem with the post offices and -- its business models broke that it has not kept up with technology it has not kept up with market demand and market changes we need to take that.
-- do a systemic reform we have to reduce the workforce because 80% of their cost is labor -- fleet is antiquated well over twenty years old.
And they don't provide.
What most consumers want to have in terms of different or varying types of service.
They go to a 150 million homes today there are great service very respectable we need to save the post office we can do it and that's what the purpose of our reform bill is about.
All right -- -- look just to throw some numbers for folks about that what the issues are here on mail volume down 13%.
120% since 2006.
Okay after this is from 2009.
And then of revenues down we have nine point 1%.
And you know other things that I heard congressman years ago was that -- email is hurting the letter business.
But on the other hand the Internet as we created a shipping boom everybody's ordering stuff online -- -- have to be -- Problem is you've got FedEx and UPS competing.
With the postal delivery service and that that's where they really have to change their business model and focus on getting competitive -- shipping of these.
Online purchases and you agree with that correct.
I agree with that but I also want to point out that the interdependent relationship that is now existing between UPS and FedEx -- the Postal Service UC UPS is now transporting a lot of the bulk mail.
Our -- by way of their trucks FedEx is now taking some of the in the mailbox -- all the mail that goes by air air cargo and more importantly this post office is now delivering FedEx on Saturday CC -- become interdependent.
But the post office has not adapted to the market changes.
They need to be out there with the Amazon.com -- other companies that are taking online orders and offering a competitive package out there to deliver that whatever is being ordered.
You see that's where they need to be innovative that's where they need to be little bit more entrepreneur world.
And use the skill and cooperation -- FedEx and UPS and doing this right so explain on the elements of your reform -- Well first smaller creates an authority that would oversee it almost putting it into receivership since -- -- They would renegotiate the labor contracts and now have a -- no layoff clause.
It would allow for a some what the Brack was the -- reduction.
Do we do to.
To do review to see which facilities need to be reduced because that's hot potato politically when your clothes in a post office back home but -- -- losing money.
And and that they they need to go but more importantly.
They don't need to go and not have the service they're so what we're looking at us creating village post offices -- partnering with the post office and existing retail outlets like -- perfect -- drugstore or some established retail outlet.
That allows for the customer demand to be there it allows for the the Postal Service to be there to provide their service.
So -- it also allows for.
And quite frankly to use the Postal Service trucks for advertising.
As a revenue source to not rely totally on their postage rate for their only revenue.
It's a very comprehensive package and and -- it touches.
A lot of people.
Yeah on the other things that we hear floated are obviously you're raising the cost of stamps and shortening the week.
To maybe just four days a week or at least five eliminating weekends.
If -- there's there's there's a scoring on this that says you'll save three and a half billion dollars a year ago from six days to five days.
Which which is that you know with something that we have to look at.
All right and now what about the price of stamps.
-- one thing about the price of stamps is a first class mail for 44 cents is a tremendous deal.
But you have to also understand that some of the commercial mail does not pay its full freight.
And the political mail does not pay its full -- we believe under this bill that over time.
These uses of the Postal Service although their major uses of the Postal Service but they shouldn't be subsidized and they should be paying the full freight.
So that instead of first class mail being the subsidize -- of all mail in first class mills gone down.
Although equitably play their fair share in order to have the mail deliver timely and appropriately so very briefly where does this -- stand now.
We will take it up to in my committee next week for a markup and then now from there they'll go to the full committee and hopefully to the floor.
You know that the thing is that by September 30 the post office is going to be ten billion dollars in -- cannot be -- to meet their obligations at the end of the year.
It's very likely that in the middle of next year they won't be able to make their payroll so this is something that we have to do we have to do now it's a bipartisan issue.
It affects all Americans and I think that hopefully by the end of this year we should have a bill passed out but -- satisfies our concerns and that can be a long term growth.
In future for the United States Postal Service congressman Dennis Ross a Florida thank you so much for joining us thank you for allowing me.