Unions, Managers Team on Postal Reform

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Though the postal unions and management associations do not agree 100 percent on the merits of postal reform, there are basic principles they share.

These principles were made clear in a letter March 16 to Sen. Susan Collins, who chairs the Senate Committee on Homeland Security and Governmental Affairs, composed jointly by the lobbyist of the U.S. Postal Service's seven unions and management associations and signed by the national presidents from each of them.

"While we have differed on specifics, our goal is to ensure a financially sound, operationally healthy Postal Service that provides high quality universal service for its customers at affordable rates," the letter said.

The Senate passed S. 662 on Feb. 9, and a similar bill passed the House of Representatives last summer. A conference committee will try to resolve the differences between the two bills. If a compromise is reached, the committee will submit a report to both chambers for final approval. Then the bill would go to President Bush.

Senate conferees have been chosen, but House conferees have not, as of press time. The White House has insisted that the bill have no effect on the federal budget. But one provision eliminates an escrow account that would require contributions from the USPS of $78 billion over 60 years. Another provision returns responsibility for funding pension benefits related to the military service of postal retirees to the Treasury Department.

The postal associations support the provisions covering the escrow account and military pension benefits, the letter said.

They also wish the bill to include rate setting exigency. According to the letter, both bills permit the USPS to periodically raise postal rates in line with inflation, consistent with changes in the Consumer Price Index, with the approval of a newly named Postal Regulatory Commission. Both bills also grant the PRC, as part of its rate-making authority, the expedited power to approve higher rates under emergencies.

"We have consistently expressed our strong preference for the House approach to PRC exigency authority over the approach taken by the Senate bill," the letter said.

For example, the House bill would permit the USPS to raise rates above the CPI cap in rare occasions when it could prove in an open PRC proceeding that greater increases are "reasonable and equitable and necessary" to maintain quality, universal post services.

The Senate approach, the letter said, limits such increases only to "unexpected and extraordinary circumstances" such as biological or chemical attack on the postal system. "[The Senate version] would lead to unnecessary and counterproductive service cuts in the face of serious external shocks that fall short of national emergencies," the letter said.

The unions and associations also support the "banking authority" contained in the Senate bill, which authorizes the USPS to save any "unused" price-hiking authority under the CPI cap for use over a period of up to five years, subject to annual limitation (of 2 percentage points).

"This gives the USPS greater flexibility to take business and economic conditions into account when setting its prices and avoids a 'use it or lose it' approach to pricing decisions," the letter said.

Finally, the groups believe that single-piece parcels belong in the "market dominant" category, as defined by the Senate bill, not the "competitive' category," as in the House bill. "Assigning these packages to a 'competitive' category will cause a significant price increase that could mean the discontinuation of neighborhood delivery service by the Postal Service," the letter said.

"No private carrier is capable of -- or inclined to -- deliver packages to all addresses throughout the United States, from Hawaii and Alaska and Maine to California, including rural and exurban sites, six days a week, at a uniform rate without a surcharge," the letter said.

The letter was signed by William Burrus, president, American Postal Workers Union; William H. Young, president, National Association of Letter Carriers; John F. Hegarty, president, National Postal Mail Handlers Union; Donnie Pitts, president, National Rural Letter Carriers' Association; Steve LeNoir, president, National League of Postmasters; Ted Keating, president, National Association of Postal Supervisors; and Dale Goff, president, National Association of Postmasters of the United States.

Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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