McHugh: Postal Reform Needed Urgently

WASHINGTON — It’s critical that Congress pass a postal reform bill before it’s too late, Rep. John McHugh, R-NY, told attendees at the Direct Marketing Association’s Government Affairs Conference yesterday. Meanwhile, other speakers warned of the difficulty of reform getting through this year.

“The crisis is upon us,” said McHugh, chairman of the House Government Reform Committee’s Special Panel on Postal Reform and Oversight. “If we don’t act now, the consequences of deferring our actions until the crisis is full blown would be disastrous.”

McHugh was not specific on when a reform bill will be introduced, but some have said it may be this week or next. McHugh is working with the House committee’s chairman, Tom Davis, R-VA, and the Senate Governmental Affairs Committee to enact legislation to reform the U.S. Postal Service.

“We are closer today than ever before of making a difference and finding a bipartisan, bicameral solution,” he said.

In a Q-and-A session after his presentation, McHugh was asked by DMA president/CEO H. Robert Wientzen what labor issues a reform bill would include, especially since labor makes up 80 percent of the USPS’ costs. Given the party dynamics of both houses, McHugh said, no matter how one feels about changes to the law with respect to employees and labor groups, an objective bill won’t get through.

“If this bill is to be passed — and if we are going to get to the core challenge of providing flexibility and modernization of the postal service … broad-based changes to the employee worker situation — they are probably not going to be in the bill, because you can’t pass a bill with them,” McHugh said.

A Senate bill, however, is expected to contain workforce reform proposals, according to insiders.

As for rates, McHugh said the committee is working with United Parcel Service and others to find a balance.

“We are not looking to give the postal service such free rein that they go out and run ramshot over the private sector,” he said. “What we want is to provide a process that is flexible and provides predictability and regularity.”

Wientzen also asked McHugh whether legislation would resolve two issues created by last year’s Civil Service Retirement System legislation. One involves requiring the postal service to put CSRS savings — $3 billion a year — into escrow pending congressional review beginning in fiscal year 2006. The other involves the shift from the Treasury Department to the postal service of military service retirement liability costs of USPS employees before they became postal employees. The USPS has said this will add more than $27 billion to its retirement obligations.

McHugh said he and Rep. Henry Waxman, D-CA, the committee's ranking Democrat, feel “very, very strongly that those costs should be moved out of the postal service, back over to Treasury, and that they are bound and determined to try to find a way to do that.” However, he added, the Bush administration “doesn’t agree with us.”

Moreover, in another session at yesterday’s conference, Cory Alexander, chief of staff to House Democratic Whip Steny Hoyer, D-MD, responded to a question concerning whether the provision will be passed this year by saying, “The White House, in an election year, has leverage over Congress.”

Alexander and Brian Gaston, who is chief of staff to House Majority Whip Roy Blunt, R-MO, also made clear that postal reform likely will not be passed this year because of time constraints and because it is an election year.

Also yesterday, McHugh was presented with the 2004 Public Service Award from the DMA’s Nonprofit Federation for his efforts on postal matters affecting nonprofit mailers. This is the first time an elected official received this award. The federation’s Critical Issues Conference is taking place at the same time as the Government Affairs conference.

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