USPS Suggests Changes to Reform Bills

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Though the U.S. Postal Service generally supports the postal reform bills moving through Congress, the agency told mailers about two amendments it hopes to see added to the legislation.


Postal officials also explained their objection to a provision in the Senate bill. As of press time, the postal service had not sent a letter outlining its concerns to the House and Senate. Postal officials met with mailers recently to discuss these concerns.


The Senate Committee on Governmental Affairs approved the Postal Accountability and Enhancement Act, S. 2468, on June 2. It was crafted by committee chairwoman Susan Collins, R-ME, and Sen. Tom Carper, D-DE. The bill is similar to H.R. 4341, which passed out of committee May 12. The full House is to take up its bill by the end of the month.


One change urged by the USPS would require that each competitive product maintain an institutional cost contribution of 25 percent. The planned Postal Regulatory Commission could reconsider the requirement at five-year intervals. In deciding, the PRC would consider prevailing market conditions for competitive products and cost factors that might affect competitive products.


The USPS has raised this issue previously.


In a televised speech to thousands of mailers at the New England Mail Expo in Boxborough, MA, late last month, postmaster general John E. Potter said he was concerned about parts of the reform bills that deal with pricing flexibility in competitive and non-competitive product lines.


"The language will likely result in added costs being shifted to packages," he said. "That could result in significant upward price pressure, which could put $2.5 billion in contributions we gain annually from our package services in jeopardy. That loss of contribution would have to be borne in higher rates on other classes of mail."


The other amendment calls for refining the cost attribution factor used for postage purposes to ensure that the method of cost attribution is based on a transparent assessment of cost causality. Attributed costs would be required to reflect solely the postal costs of providing the product, and not subjective factors.


The USPS also objects to a provision in the Senate bill that would give the PRC responsibility for developing service performance standards for all market-dominant mail products. The USPS said this would "significantly restrict the ability of postal service management to carry out its role as a business concern in the communications marketplace."


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