McHugh Introduces Revised Postal Reform Bill

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U.S. Rep. John McHugh (R-NY) released a newly revised Postal Reform Bill last week, which includes an annual index for capping rate increases within the growth rate of inflation.


In addition, Rep. Dan Burton (R-IN), chairman of the House Committee on Government Reform and Oversight, and McHugh said they have scheduled a vote on the bill, H.R. 22, Sept. 23.


McHugh, who is chairman of the subcommittee on the Postal Service, said in a statement that if the bill passes it would give the U.S. Postal Service greater freedom to compete in the current competitive and dynamic communications marketplace. It also would establish rules to ensure fair competition and protect the public interest.


The updated bill reflects "the vast input the subcommittee has received from the public and all members of the postal community," he said. "In addition to those responses, the subcommittee has had more than a dozen hearings where we had the benefit of hearing from more than 60 witnesses who testified on H.R. 22, the challenges facing our outdated postal system and the need to modernize our nation's laws."


So far, the direct marketing community has reacted positively.


"Our early read of the bill is positive," said Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association. "Not everything direct mailers want is in there, but there are important provisions that we support."


Cerasale said the DMA will consult with other mailer groups, magazine and newspaper publishers, postal management and labor unions and postal competitors to see if together they can help move the legislation out of committee and onto the House floor.


The 154-page bill calls for many provisions, including:


* A realignment of the authority granted to a new board of directors and a new Postal Rate Commission, which would be renamed the Postal Regulatory Commission. On matters that require a decision from the commission, that decision will be final.


* The USPS would file a baseline omnibus rate case with the Postal Regulatory Commission within 18 months upon enactment.


* Annual increases in rates for noncompetitive classes -- such as letter mail -- would be allowed without a rate case as long as the rates are capped by an inflation index minus a productivity factor set by the Postal Regulatory Commission every five years.


* Nonprofit rate law would be changed so the rates would be subject to the same price caps pertaining to regular rates.


* The postal service would be required to set performance criteria, to measure its performance and to report on its performance to the Postal Regulatory Commission.


* The USPS would have freedom to operate its competitive services with minimal regulatory intrusion. All competitive services, for example, must recover attributable costs and must be offered through a private postal corporation that is organized and paid for through money generated exclusively from competitive services.


* Negotiated service agreements would be allowed but only under strict conditions. For example, the agreements must not cover attributable costs and must include higher amounts of work sharing.


* Incentives would be available to postal employees for efficient, economic and profitable management.


* The State Department would represent the United States at the Universal Postal Union but would have to consult with the USPS and competitors and couldn't enter agreements that favor USPS over its competitors, or vice versa.
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