Postal Reform May Be One Step Closer

Congress has started the process that could lead to the most significant postal reform since 1971. But one thing became clear during hearings in January and February.

While several witnesses agreed that change is needed, many lambasted the suggestion by the President’s Commission on the Postal Service that the Board of Governors be replaced by a board of directors.

For example, Postmaster General Jack Potter testified Jan. 28 that political appointments “could result in a highly partisan board. Moreover, the Senate’s current statutory role of advise and consent in connection with board appointees would be eliminated.”

The PMG continued that the proposals on rate setting would “remove the determination of how much money is needed to run the nation’s postal system from the operators — those with the day-to-day responsibility of running the postal system — and transfer it to the postal regulatory board.”

Potter found strong support for this opinion among labor leaders. For example, William Burrus, president of the American Postal Workers Union, said the board would interfere with collective bargaining.

“It is completely inconsistent, and totally unacceptable, for the commission to espouse a commitment to collective bargaining while simultaneously recommending that postal compensation be dictated by an appointed board, separate and apart from the collective bargaining process,” Burrus said.

William H. Young, president of the National Association of Letter Carriers, agreed that the collective bargaining process would be “politicized” if a politically appointed regulatory body got involved in negotiations.

And Burrus expressed a thought that is unlikely to leave direct mailers with warm and fuzzy feelings.

The postal service is currently giving away hundreds of millions of dollars every year in form of excessive work-sharing discounts,” Burrus said.

Among the discounts Burrus would like to see reduced are those for:

• First class non-automated presorted mail.

• Standard A three- and five-digit presorted mail.

• Standard A automated mail.

• First class automated mail.

Burrus also debunked the idea of bottom-up pricing, which he said is also favored by major mailers.

Despite all that, most witnesses paid lip service to the idea of reform. Comptroller General David M. Walker commented that “Congress needs to undertake as much as can be done as early as possible.” And Potter agreed that the postal situation must be addressed “before it results in a crisis.”

But is there even a remote chance that Congress will tackle postal reform during an election year?

“We are cautiously optimistic this time because there appears to be much more of a sense that the postal service is broke and must be fixed, whereas a year or two ago, we didn’t have that point of view in Congress,” said H. Robert Wientzen, president of the Direct Marketing Association.

Robert Taub, chief of staff for Rep. John McHugh, who chairs the House Panel on Postal Reform, concurred.

“It’s not a slam dunk, but this is the closest we’ve come in the nine years that Congressman McHugh has been pursuing reform,” Taub said. “We’re all pretty much singing off the same song sheet.”

Similar sentiments were expressed Feb. 4 during a Senate hearing that had been postponed following the discovery of ricin in the Dirksen Senate Office Building.

In addition, many observers agree that there should be a change in “the fundamental process of setting rates,” Wientzen said. “Of course, that’s the centerpiece of the DMA’s position.”

That move would entail requiring the USPS to “break even and decide how much it’s going to spend and how much it’s going to charge,” he continued. It would require that the USPS report its financial results “more like a private business, like a corporate P&L,” Wientzen said.

But some issues are stickier, like what to do with the funds piling up in an escrow account thanks to passage of the Postal Civil Service Retirement System Funding Reform Act of 2003.

“We would like to see the money applied to the general operations of the post office to reduce cost,” Wientzen said. “Some members of the Congress and perhaps the [Bush] administration are more cautious about that.”

Burrus agreed. “Using the postal service as a cash cow to help reduce the federal deficit is a luxury the American people can no longer afford,” he said.

Equally troubling is how to handle the payment of benefits for military veterans who work for the USPS.

“If I serve three years in the Army and then go to work in the post office and retire in 17 years, the postal service pays for my retirement for all 20 years,” Wientzen said. “That’s the only federal body that does that. And, of course, the post office is a favorite place for veterans to get jobs.”

According to Wientzen, a high administration official has said that a bill could be written by April and quickly moved out of committee for a vote in the fall.

One danger is that Congress will break up the various proposals and put them into separate bills. But Wientzen, who is set to retire this summer, is confident that he will get a fine going-away present in the form of an omnibus package.

“A slam dunk today becomes a problem tomorrow and an impossibility the day after, but there does appear to be a consensus for reform,” he said.