House Committee Kills Postal Reform Bill

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The House Committee on Government Reform defeated a postal reform bill supported by committee chairman Dan Burton, R-IN, and Rep. John McHugh, R-NY, yesterday.


Only six members of the committee voted in favor of the measure, the Postal Accountability and Enhancement Act, H.R. 4970. Twenty were opposed, and nine took a pass. Twelve Republicans voted against the bill.


The bill was drawn largely from two previous reform drafts sponsored by McHugh and Rep. Henry Waxman, D-CA. Key components would have included prohibiting postal rates from rising beyond inflation without regulatory approval and allowing the postal service more control over instituting measures to improve service.


The draft bill received opposition from direct marketers, United Parcel Service and the Teamsters. UPS and the Teamsters, a union with many UPS employees, are wary of giving the postal service more powers to compete with private-sector companies.


Postal observers were not surprised the bill was defeated. One scheduled mark-up was canceled as Burton tried to drum up support for the bill from Republican leadership. Insiders said Burton was having difficulty signing people on to the bill because UPS was persuading Republican members of Congress against it.


"My real surprise on this was the depth of influence that UPS had on the Republican side of the aisle," said Neal Denton, executive director of the Alliance of Nonprofit Mailers, Washington. "If no Democrats had shown up at the mark-up, it still would have lost."


UPS spokesman David Bolger confirmed that the company had difficulties with the bill.


"Like chairman Burton, we want a strong and viable postal service," Bolger said. "But where we differ is we want something financially sound as well. The Burton-Waxman bill did not address the financial impactions; all it did was grant the USPS a lot of flexibility to improve revenue as opposed to cutting costs. Providing flexibility in a time when there are deficits in the billions of dollars does not compute."


This was the first time in seven years that the full committee had considered postal reform legislation.


"Now we wait and see how much of this bill becomes the basis for future discussions with the next Congress," Denton said. "Certainly, the provisions creating a stronger Postal Rate Commission, now that they've been agreed to by the postal service, will become an important ingredient for future reform efforts."


The news also means "attention on a presidential postal reform commission will, no doubt, increase because of today's inaction," Mailers Council executive director Bob McLean said.


The Mailers Council, a group of businesses, nonprofits and mailing associations, called on President Bush for a presidential commission on postal reform last month.


Separately, Rep. Bernard Sanders, I-VT, introduced H.J. Res 98 last week, a non-binding resolution that tries to establish a three-year moratorium on postage rate increases for nonprofit publications. The resolution has been referred to the House Committee on Government Reform.


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