USPS Shouldn't Get Sidetracked in Others' Jobs

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Congress is working on a bill to dramatically re-invent the U.S. Postal Service. Ben Franklin is no doubt spinning in his grave.


If passed, H.R. 22, sponsored by U.S. Rep. John McHugh (R-NY), would instantly arm and unleash on private enterprise a private-law postal service subsidiary, dubbed "Postal Service Lite" by its alarmed critics, with access to the largest nonmilitary work force in the world.


This new entity would be free to go into any business it wants, without regard to its connection with the USPS' historical charter to provide mail service to the country. Senior postal managers don't deny that the bill would give them the authority to hold bake sales and even to open Buick dealerships around the country.


Some postal executives have even commented privately that they think that they have that authority now.


Why is McHugh's Subcommittee on the Postal Service working to create a quasi-governmental competitor to private businesses in a host of U.S. industries?


It's because the USPS says it must be free to search for revenue it is losing -- or expects to lose -- to electronic communications. Although the postal service is growing, its loss of market share in critical parts of the mail mix spells tough times ahead.


The mailing services industry and others that have taken the time to read the bill and some of its scheduled revisions, say hold on. While it's true that e-mail and other electronic communications have slowed the growth of First-Class mail, the remedy has to be something short of declaring war on private businesses (many of them small businesses).


Reform of the postal service is needed to streamline operations and to remove some of the unnecessary constraints that impede its ability to provide the country with the best mail service possible. Many of the needed changes have wisely been included in McHugh's omnibus bill.


One of these would provide more flexibility to initiate new postal products and services within parameters established by law. Another would authorize investment activities without unnecessary and cumbersome oversight from the Treasury Department -- though establishing equity positions in private businesses would be prohibited.


A third positive and very important provision of the bill is the strengthening of the role of the Postal Rate Commission, which would be renamed the Postal Regulatory Commission.


Although the commission would play less of a role in rate setting, it would have increased review and oversight authority to ensure that the USPS complies with the constraints on the exercise of its pricing discretion. Although the bill contains these and other thoughtful provisions, it is wrong to change the basic charter of the postal service to give it carte blanche to take on any business or industry in search of new revenue.


If McHugh has his way, the postal service subsidiary would be subject to most of the requirements and constraints of private enterprise and would pay taxes. He deserves credit for trying to design fairness and equity into the proposal. But setting up the government to compete with U.S. business is a flawed idea.


This country has the best postal system in the world. Its service is timely and reliable and has become more so during the tenure of outgoing Postmaster General Marvin Runyon. The postal volume handled daily is a multiple of the volume of the next largest system in the world. And the postal service has built its deserved reputation on the basics: collecting, processing and delivering the mail.


But the "let us compete in any business we want" group within the postal service will not be easily deterred. Postal managers already have been dallying in nonpostal businesses, including the sale of telephone calling cards, wrapping and packaging services and receiving and processing charge-card remittances.


The latest entry into nonpostal businesses, and most troubling to the mailing services industry, is the sale of direct mail services. For a fee, which is run through a third-party firm hired by the USPS, an advertiser can get the postal service to distribute its full-color ads and coupons in a Welcome Kit to Americans who have recently moved.


Not that there's anything wrong with advertising hardware stores and phone services to Americans -- Mailing Advertising Service Association (MASA) member companies do it every day. But now, when an MASA lettershop or direct marketing member approaches a prospective advertiser, it finds that the postal service's representative may already have been there.


And because of its cherished roles as the country's provider of mail service and the world's largest monopoly, the USPS has all sorts of unfair advantages. The postal service stuffs the advertising envelopes with information on local and state government services and announces that the wholesome purpose of the mailing is to verify a mover's address.


The USPS' profits from nonpostal services come at the expense of the mailing services industry.


In an era when the national dialogue focuses on less government and the privatization of some federal government functions, this advertising distribution plan by the postal service does just the opposite. It "governmentalizes" an important part of the advertising industry -- the distribution of advertising through the mail.


Because address verification is an important postal function, it should be paid for by those who pay postage to use the system -- not by raiding the direct marketing industry.


The USPS needs some changes, but those changes should not alter the basic task entrusted to it, or the charter it has been given by the American people -- to run the world's best mail system, which it already does.


In fairness, the postal service, for reasons it will make known, is reportedly opposed to McHugh's bill, which is being revised. But, to keep faith with the American people and American business, the postal service also should reject recent incursions into private industry.


Since Congress is committed to less not more government, our hope is that McHugh's subcommittee will do what is right for the postal service, American business and ultimately the country: Instruct the postal service to do what it does best -- deliver mail and packages -- and leave the bake sales and Buicks to others.


David A. Weaver is president of the Mail Advertising Service Association, a trade association for lettershops, mail houses and fulfillment businesses.
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