Postal Reform Bill to Be Introduced in August

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A bipartisan postal reform bill may be introduced in Congress as early as August, said the top aide for Rep. John McHugh, R-NY, a member of the House Committee on Government Reform.


Robert Taub, McHugh's chief of staff, said the bill would build on the work McHugh has done in the past 6 1/2 years.


"But at the same time, we recognize we have to take a fresh and new look at it," Taub said.


McHugh drafted an omnibus reform bill last year that would have overhauled the U.S. Postal Service and responded to many concerns of postal officials and mailer associations. The bill did not clear committee in the last Congress.


Taub was not specific about the new bill but said that besides building on the earlier versions, it would "borrow from proposals the Government Reform Committee has received." The committee has looked at several proposals.


One, from a coalition including mailers and USPS employees, would have rates be adjusted using a formula relying on the Consumer Price Index, which would allow the postal service to reduce expenses if revenue were below projection.


That proposal also would raise USPS borrowing authority from the current $15 billion to a figure that would not exceed 50 percent of revenue -- an amount that could surpass $30 billion. The statutory break-even requirement would be eliminated to let the USPS generate profits, and the profits would be used to fund new products and services or to offer bonuses or incentives to employees. In addition, the Postal Rate Commission's role would change from that of oversight in rate-making to an auditing body, responsible for annual audits and reports to ensure compliance with pricing and to report on service performance.


Another proposal the committee is considering comes from United Parcel Service. It would grant the USPS flexibility to respond to short-term financial challenges; raise the USPS' borrowing authority by $3 billion, to $18 billion; and accelerate the rate-making cycle to allow for quicker decisions by the PRC.


The USPS Board of Governors also has submitted a reform proposal. However, postal employee groups have soundly criticized that plan, so it is unlikely to gain much support on Capitol Hill. The governors proposed that: The USPS have a mandate to provide universal mail service; the postal monopoly be retained; postal rates be adjustable using a "simple and readily understandable" indexing system; collective bargaining be "reoriented" based on the Railway Labor Act; and all changes to employee pension, insurance, medical and hospitalization benefits be subject to the labor negotiation process.


Though Taub was not specific, insiders were. They said that under McHugh's bill, postal rates would be adjusted using a formula that relies upon the CPI. The bill also would protect individual rate cells from especially harsh increases by imposing caps and bands on individual rate increases. Though this would let the USPS raise rates without PRC oversight, it also would protect mailers from especially damaging increases.


In addition, an independent postal corporation would be formed to handle competitive products, services and other new ventures. It would operate as a private enterprise while sharing profits with the postal service. Competitive and noncompetitive postal products would receive different pricing treatment, PRC responsibilities would change, and new qualification requirements would be imposed on Board of Governors candidates.


"We are still in the process of working out the details of the bill," Taub said. "Anything and everything is on the table."


Meanwhile, the Senate Committee on Governmental Affairs is expected to hold postal oversight hearings in late summer or early fall.


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