Sen. Susan Collins, R-ME, chairwoman of the Senate Homeland Security and Governmental Affairs Committee, and Sen. Thomas Carper, D-DE, a member of the committee, introduced their postal reform bill last week.
At first glance, insiders said the bill, S. 662, is a significant improvement over the version that was introduced by Collins and Carper last year and unanimously approved then by the Governmental Affairs Committee. Neither the Senate bill nor the House version were deliberated above the committee level last year.
The legislation repeals a provision of the Postal Civil Service Retirement System Funding Reform Act of 2003, which requires that money owed to the USPS due to an overpayment into the Civil Service Retirement System Fund be held in an escrow account. The escrow account would require contributions of $78 billion over 60 years.
These savings would be used to pay off debt to the U.S. Treasury, fund healthcare liabilities and mitigate rate increases, Collins said.
In a letter to Budget Committee leaders last week, the senators said their bill would remove several billion dollars from the federal deficit in the first year following its enactment. The bill would require the USPS to make payments into a new Postal Service Retiree Health Benefits Fund beginning in 2006, rather than in 2007, as was proposed in last year's bill.
Richard Strasser, the USPS' CFO, said the USPS will file for a rate increase this month only because it must cover a $3.1 billion escrow requirement. Many in the mailing industry expect a 6 percent across-the-board rate case to be filed, with implementation Jan. 1.
The new bill also returns to the Treasury Department the responsibility for funding CSRS pension benefits related to the military service of postal retirees.
The Collins-Carper reform bill also grants the USPS Board of Governors the authority to set rates for competitive products like Express Mail and Parcel Post, as long as these prices do not result in cross-subsidy from market-dominant products.
It also replaces the lengthy and litigious rate-setting process with a rate cap-based structure for market-dominant products such as First-Class mail, Periodicals and library mail; introduces new safeguards against unfair competition by the USPS in competitive markets; and transforms the existing Postal Rate Commission into the Postal Regulatory Commission with enhanced authority to ensure that USPS management has greater latitude and stronger oversight. The commission would be charged with reviewing proposed rate changes before they can be enacted.
Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters