BOG Chairman Curbs Enthusiasm on Postal Reform

Although the Postal Accountability and Enhancement Act (bill H.R. 22) was passed in Congress last week, don’t pop the champagne just yet. The U.S. Postal Service Board of Governors chairman James C. Miller III warned on Aug. 2 that the path to reform would not be easy, and that additional postal rate hikes could be likely.

One stumbling block to getting the bill passed is the White House, which has made it clear that H.R. 22 will be vetoed if it’s not revenue-neutral. Miller said that this conflicts with both H.R. 22 and Senate version, bill S. 662. What’s more, if such revenue-neutral legislation were enacted, it would give the BOG limited authority to run the Postal Service like a legitimate business enterprise, and make it hard for the USPS to meet consumer needs.

“A lot is happening here in Washington during what is traditionally a quiet August,” says Kate Muth, vice president of the Association for Postal Commerce. “Some budgetary issues will ultimately have to be worked out between the Senate and the White House if H.R. 22 is to be passed.”

If the postal reform bill is ultimately vetoed, mailers would likely face an additional postal rate increase in the mid-single digits in 2007, as the USPS would aim to control costs and generate revenue. That’s on top of the pending 5.4% increase on First Class mail still scheduled for January 2006. After considering these issues further, the BOG will communicate its views to Congress and leaders in the Administration.

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