Turnover on Hill Could Slow Work on Urgent DM Issues

Postal issues, remote sales tax collection, teleservices, spam and the Fair Credit Reporting Act are just some of the items the 108th Congress will tackle when it convenes for its first session tomorrow.

Perhaps the most important topic for direct marketers is legislation that would let the U.S. Postal Service lower pension contributions to past and present postal employees who are members of the Civil Service Retirement System.

The federal Office of Personnel Management prepared the bill, called the Postal Civil Service Retirement System Funding Reform Act. It was introduced in the previous session of Congress but did not go anywhere.

The postal service wants to lower its payments after a review last year found that the pension system was almost fully funded. The USPS estimates it could save $2.9 billion in fiscal year 2003 and $2.6 billion in FY '04, and postmaster general John E. Potter has said such savings could keep postal rates steady until 2006.

Quick passage is critical since the USPS has said it will submit a new rate case request with the Postal Rate Commission by April if the law is not changed. Without the lowered pension contributions, Potter has said the next rate increase will come in 2004.

Complicating matters is that the Senate and House of Representatives will be working with many new members, staffers and committee chairs.

“The big story on the Hill is that we have so many new players,” said Neal Denton, executive director of the Alliance of Nonprofit Mailers, Washington. “Postal issues, especially the [Civil Service Retirement System] issue, are complex and esoteric and they are not especially sexy. When you have a whole new crew of staffers and members to follow the issue, it's difficult because there is a significant learning curve.”

Rep. Dan Burton, R-IN, past chairman of the House Committee on Government Reform, is stepping down from that post because of term limit rules. The House likely will name a new chairman this week, with three in the running: Reps. Christopher Cox, R-CA; Thomas M. Davis III, R-VA; and Christopher Shays, R-CT.

The House also might re-establish the postal subcommittee it disbanded at the start of the 107th Congress.

On the Senate side, Sen. Joseph Lieberman, D-CT, chairman of the Committee on Governmental Affairs; and Sen. Daniel Akaka, D-HI, chairman of the subcommittee that oversees postal issues, will relinquish their chairs.

Sen. Susan Collins, R-ME, likely will become chairwoman of the Government Affairs Committee, with an announcement possibly coming next week. It is not known who will head the subcommittee that oversees postal issues. The position would have gone to Sen. Thad Cochran, R-MS, who was the ranking minority member of the postal subcommittee last year, but insiders said he likely will get a full committee chairmanship.

The Senate also is expected to vote on President Bush's nomination of James Miller to the USPS Board of Governors. Miller would succeed Einar Dhyrkopp, whose term expired in December after being extended one year beyond the nine-year norm.

The White House also has to nominate another governor this year after Ernesta Ballard, a board member since 1997, said in December that she was leaving.

Unlike in the past several years, there won't be a push in Congress for postal reform legislation. Congress will wait to see what comes out of the commission appointed by President Bush to review USPS operations and suggest reforms. The commission's first meeting is Jan. 8.

Sharing the spotlight with postal topics will be discussion of remote sales tax collection, as the Internet tax moratorium expires Nov. 1.

“There will clearly be some push to work on this issue in Congress this year, and it is an issue that will be debated over the next nine months,” said Direct Marketing Association spokesman Lou Mastria.

Congress will debate funding for the Federal Trade Commission's national no-call registry, Mastria said, and “how much authority the FTC has under its current statute.” He also expects the Federal Communications Commission to make a similar ruling in six to nine months, something Congress will look at as well.

The DMA also expects some type of spam legislation to be introduced this session.

“I think spam will be a big issue this session, and we would be looking for some legislation that has a broad consensus and a good chance of passage,” Mastria said.

Finally, Mastria said the DMA is watching the Fair Credit Reporting Act reauthorization issue. In January 2004, the act's state preemption provisions expire, meaning state and local politicians could set up their own regulations governing the collection and dissemination of credit information. Each of the more than 30,000 jurisdictions nationwide could begin determining how individual credit information is handled.

“This adds a potentially big problem for direct marketers because it could limit their ability to use quick credit as a tool by which they can get customers to buy something,” he said. “All of a sudden, they may not have access to the data they need to validate some of those offers.”

Without these offers, he said, “remote and over-the-counter retail sales will decline, and costs will increase dramatically for all retailers. … If the FCRA is not allowed to have a universal system for handling data, it will harm every aspect of the direct and interactive marketing industry.”

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