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Chaffetz Bill Builds Hope for Postal Reform by Year’s End

Hamilton Davison sat in the office of Rep. Elijah Cummings (D-MD) Last month hashing out the details of the draft of a postal reform bill. The session went long, which was good. The scent of bipartisan compromise—a bouquet in short supply in the halls of Congress—was in the air and the president of the American Catalog Mailers Association and the Ranking Member of the House Oversight and Government Reform Committee were finding common ground.

“We’re on the 15 yard line,” Cummings told Davison. 

“The question is, which one?” replied Davison.

Two postal reform bills introduced in the last three years by postal reform’s chief advocate Tom Carper, the Senator from Delaware, have gone nowhere. The chairman of the House Oversight Committee, Utah Republican Jason Chaffetz, appeared uninterested in the issue and let it languish. But last week, with the committee’s passage of Chaffetz’s Postal Service Reform Act, hope arose among all postal stakeholders that a bill could be passed before the end of the year. GovTrack gave the Chaffetz bill a 35% chance of passage, almost a sure bet in a Congress that passed about 3% of bills introduced last year.

Returning to the football parlance employed by Cummings, postal reform was in the Red Zone.

Chaffetz’s bill addressed chief concerns demanded by the Postal Service, such as re-amortization on a 40-year schedule of retiree health benefit pre-funding and automatic Medicare enrollment for eligible retirees.But the Oversight Committee did not go forward with a proposal backed by both mailers and postal unions that would allow USPS to invest its funds in more aggressive financial vehicles, fearing that doing so would deprive the bill of an essential high score from the Congressional Budget Office.

The permanent installation of the 4.3% exigent surcharge demanded by the Postal Service and excoriated by mailer associations received Solomonic treatment from the Chaffetz bill: It split it down the middle, proposing that the Postal Service to take an immediate 2.15% increase.

Mailers also wanted a bill that would postpone the full review of market-dominant product rates due from the Postal Regulatory Commission by the end of 2017, but the Chaffetz bill holds to the original date.

“The idea was to let the changes proposed by reform take hold and then see if the modern system of rate-making was working or not,” Davison said. “As for the 2.15% rate increase, it was a quid pro quo to get the Postal Service and the unions on board. But we think it’s a bad precedent to let Congress set rates.”

Yet high prices must be paid for bipartisanship on Capitol Hill, so many provisions longed for by mailers had to be cashiered to win the support of Democrats Cummings, Stephen Lynch of Massachusetts, and Gerry Connolly of Virginia, who signed on as co-sponsors.

Many of these accommodations had to be made, too, to secure the all-important positive CBO score

“We believe the goal will be to get a CBO score this summer. A good score is crucial to getting support from the Ways and Means committee. We think it’s a very big deal to have them support this and agree to the Medicare integration,” said Jessica Lowrance, president-elect of the Association for Postal Commerce.

The hope from all postal quarters is passage of reform following the elections. There’s precedent for this. The Postal Accountability and Enhancement Act of 2006 was passed in a lame duck session.

“The bill is definitely a positive step, but it’s the first step on a long journey,” Lowrance said.

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