PRC, USPS Board Chiefs Differ on Reform Views

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The heads of the Postal Rate Commission and USPS Board of Governors debated proposed changes to the U.S. Postal Service's rate-setting process and governance at a Senate Governmental Affairs Committee hearing yesterday.

PRC chairman George Omas said that during his tenure the postal service has opposed mailer suggestions to make rate cases faster and less complex. The USPS also has resisted efforts by the commission, mailers and neutral third parties such as the General Accounting Office to obtain detailed information about USPS practices and operating results.

"I sincerely hope that this culture of confidentiality and the resistance to change can be overcome with reform legislation," he said.

Omas said that the postal service and PRC must work together with mailers to develop a modern system for regulating rates. Such a system, he said, should include price caps that encourage the USPS to reduce costs and increase efficiencies.

Board of Governors chairman S. David Fineman agreed that the ratemaking process needs change.

"I have referred to it over and over again as the lawyers welfare act of 1970," Fineman said. "It's a system that doesn't make a lot of sense."

On the issue of transparency, Fineman said, "we have begun to try to comply with [Securities and Exchange Commission] requirements. But when you have the present system, frankly, you are not going to get the kind of transparency that everybody seems to want, although I can't understand what else they want."

Fineman also took issue with a recommendation last year by the President's Commission on the U.S. Postal Service regarding the selection of future governors. It was suggested that the president would appoint three board members, who then would select the first eight independent board members with the agreement of the secretary of the Treasury. After that, independent members would be selected by the board, again with the agreement of the Treasury secretary.

This, he said, "could result in a partisan board, which I think everybody wants to stay away from."

Fineman also said that though board members should have qualifications, some of those contemplated by the commission "may be too stringent." And business qualifications alone aren't enough, he said, because the postal board is a public group.

Appointments should not be as short as three years or as long as the present nine, Fineman said, and though imposing age limits for governors is reasonable, 70 may not be an appropriate limit.

The board, however, should not be empowered to make decisions about the postal monopoly or universal service. Such major public policy issues should include congressional input, he said.

Sen. Susan Collins, R-ME, the Governmental Affairs chairwoman, said she and fellow committee member Sen. Tom Carper, D-DE, "seek to draft a bill and get it introduced by the end of this month.

"We are trying to keep on an aggressive timetable because we are committed to getting postal reform legislation enacted this year."

The committee has held eight hearings on postal reform.

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