H.R. 22 Divides PRC, USPS

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Fair rate making and labor relations were the main issues brought up in testimonies heard at the Postal Modernization Act of 1999 earlier this month called by Rep. John M. McHugh (R-NY), chairman of the house subcommittee on the postal service.


The subcommittee heard testimony about H.R. 22 from William J. Henderson, postmaster general of the U.S. Postal Service; Edward J. Gleiman, chairman of the Postal Rate Commission; and presidents of the USPS' four employee unions among others.


Most groups support parts of H.R. 22 -- which is designed to lay the foundation for the Postal Service for the 21st Century -- but also suggested changes.


Henderson, for example, said the USPS supports the basic reform elements of H.R 22 including the retention of universal service requirements; the division of the postal service into competitive and noncompetitive products; the creation of a corporation through which nonpostal products and services could be offered; a strengthened role for a Postal Regulatory Commission; management oversight by the USPS Board of Directors; a price cap to boost performance and provide price predictability for rates and postage costs; modest pricing flexibility to respond to market conditions; and transparency in the costs of competitive services to ensure they pay their way.


He said the overall framework of H.R. 22 will place performance pressures on the postal service, which will be intensified by technology developments, the globalization of markets and rising customer expectations for speed, value and responsiveness.


"Before we abandon a rate making system that is getting the bills paid, in order to try something more challenging, let's make the new structure as fair and as realistic as we can," he said.


Henderson also laid out some specific amendments the USPS would like added to the bill, including introducing a more practical approach to dividing the postal service into competitive and noncompetitive categories; implementing a process for both the USPS and the PRC for separating the costs, revenues and financing of competitive products from those of noncompetitive products; and improving pricing flexibility.


But, the PRC's Gleiman urged the subcommittee to reject many of the postal service's proposed amendments. He said one amendment, which would allow rate increases to exceed growth in the CPI, would "eliminate assurances that rate increases would be restrained." Another amendment that would allow the USPS to enter into negotiated service agreements with mass mailers without any review by the PRC could lead to abuse that would be "unacceptably high."


The presidents of the three largest postal unions -- William H. Quinn, National Postal Mail Handlers Union; Vincent Sombrotto, National Association of Letter Carriers; and Moe Biller, American Postal Workers Union -- agreed in their testimonies that the key to postal legislation is to make sure that universal service is provided and maintained at affordable rates that support the infrastructure and provide postal employees with a fair standard of living.


However, they said reform legislation should not allow interference in postal labor relations, either directly from Congress or through the PRC, and that the collective bargaining process must be allowed to function without constraints that could affect both postal worker wages and future contract negotiations.


"The bargaining process must be allowed to set wages and benefits, and the Postal Service must be allowed to pay for its labor costs through appropriate postal rates," Quinn said. "If fair and decent wages require an increase in postal rates, then the Postal Service must be allowed to raise its rates without jumping through the overly cumbersome hoops that exist under the PRA."


Quinn added that the driving force behind particular provisions of H.R. 22 should be the public interest, not the interest of Federal Express or the United Parcel Service.


The APWU and the NPMHU both recently ratified two-year pacts that call for a 3.4 percent pay increase over two years, and cost-of-living adjustments with an estimated 3.35 percent increase.


Contract negotiations between the NALC and the USPS, however, recently reached an impasse over salary issues. On Feb. 4, the NALC and the postal service signed an agreement to proceed to a period of voluntary mediation in an effort to pursue a negotiated contract that can be sent for membership ratification. If voluntary mediation is not successful, the union said it will proceed directly to arbitration.


H.R. 22 was originally introduced in June, 1996 in the 104th Congress after a year and a half of oversight hearings. Five additional legislative hearings were held, and a detailed plan to revise H.R. 22 was announced in December 1997. After taking into account additional public comments on the plan, the subcommittee approved the bill last year on Sept. 24. The 105th Congress was unable to take further action on the bill before it adjourned.


The subcommittee plans a second hearing on McHugh's legislation in March to hear comments from direct marketing and mailing industry representatives.
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