Postal Rate Commission Chairman Ed Gleiman urged the House postal subcommittee last week to reject the changes to the latest postal reform bill the U.S. Postal Service is recommending.
Gleiman said acceptance of the USPS proposals would “erase many of the checks, and decalibrate many of the balances that have been carefully and thoughtfully incorporated” into this latest version of the bill, when he testified at the panel’s first hearing on the Postal Modernization Act of 1999 (HR-22, sponsored by chairman Rep. John McHugh (R-NY).
Postmaster General William J. Henderson outlined the changes the USPS wants at the hearing. The changes include a provision that would permit both the USPS and the PRC to separate postal revenues, costs, assets, and liabilities in the financing of both competitive products and services, overseen by a separate, private USPS corporation, and non-competitive products and services.
Attacking the fairness of that proposal, he said the corporation would not be a “separate, taxpaying corporation.” He added it would be shielded from various federal laws and lawsuits and public review, and probably would not make a significant contribution to the $20 million annual postal service institutional costs.
Permitting the creation of such a corporation, he said, “would eliminate rate payer protections…and undermine the postal service’s financial stability.”
The PRC chairman also called for the elimination of a provision that would let the USPS negotiate special mailing agreements with large mass mailers.
“There is nothing in current postal policy, the recommendations of the Joint Task Force on Postal Rate Making, or what I understand the objectives of HR-22 that would justify a program of secret, non-tariff rates for monopoly and noncompetitive services to be negotiated entirely outside public scrutiny,” he said, “the potential for abuse would be unacceptably high.”
In addition, Gleiman said a provision in the bill capping rates below the national rate of inflation should be restructured to avoid rate distortions and inequities that could cause mailers to stop their worksharing practices with the USPS and trigger a new round of extraordinarily high rate increases.
Also testifying against any price caps on postal rates were Moe Biller, American Postal Worker Union president, and William H. Quinn, National Postal Mail Handlers Union president. Both expressed a fear that capping rates would affect both postal worker wages and future contract negotiations.
“If there are any unanticipated adverse changes in expenses, market demand, or competition, the postal service’s sole recourse, if it is to stay within the cap, is to impose concessions on its workers” which could involve wage and benefit give backs or harsher working conditions,” Biller said.
And, according to Quinn, “if fair and decent wages require an increase in postal rates, the USPS must be allowed to raise its rates without jumping through the overly cumbersome hoops.”
The panel plans a second hearing on McHugh’s legislation for March to hear comments from direct marketing/mailing industry representatives as well as those representing other major mail factions, such as banks, financial institutions, utilities, and publications
