Bush Postal Commission Formalizes Recommendations

On July 23, the president’s Commission on the United States Postal Service unveiled its second and final set of recommendations for postal reform. In addition to recommendations it made last week, the following recommendations will be included in a report submitted to President Bush on July 31:

* The USPS should operate as a government entity within the executive branch and maintain its mail monopoly, subject to periodic review by a Postal Regulatory Board (PRB) that would replace the current Postal Rate Commission.

* The agency should maintain a strong emphasis on cost control and efficient, innovative management of personnel and resources. The USPS should “right-size” and realign its workforce and its physical network by consolidating or closing unneeded facilities, outsourcing more functions to the private sector, better leveraging assets such as its vast real estate holdings, and making changes in the collective bargaining system–such as opening fringe benefits to bargaining rather than having them dictated by law.

* The PRB should have the authority to make a “comparability determination” to private-sector compensation and enforce its determination as a cap on the total compensation of new postal employees; the PRB should require the Postal Service to eliminate any compensation premium that exists for current employees.

* The USPS should use private-sector resources and partnerships to lower mail processing and transportation costs and increase efficiency while continuing to focus on its core strengths of providing “first mile” collection and “last mile” delivery services.

* A corporate-style board of directors should be established to give senior USPS management greater flexibility; at the same time, a strengthened PRB should provide oversight and field complaints.

* The current rate-setting process should be replaced with an incentive-based methodology and fewer pricing restrictions. But price caps should be established; these could be exceeded only with regulatory approval.

* The USPS should continue to develop and offer worksharing discounts to mailers and be given greater flexibility to enter into negotiated service agreements for noncompetitive products.

The recommendations aren’t much different from those that have appeared in postal reform bills during the past seven years—none of which have been passed.

Once the full report is issued to President Bush and Congress, “my expectation is that by early fall, the Senate and the House will begin calling in the commission panelists for hearings to get greater amplification on some of the issues in the report,” says Gene Del Polito, president of the Arlington, VA-based Association for Postal Commerce. From there, he believes a postal reform bill will take shape early next year.

But postal rates are expected to hold steady through 2006. And although the USPS’s long-term volume shortfalls could well doom the agency as we know it, will the lack of urgency keep anything from getting accomplished on Capitol Hill?

“If we blow this opportunity, the next time we’ll get such a chance is probably three years from today,” Del Polito says, referring to when the next rate hike will take place. “After all, what more can be done once the USPS cuts all the costs it can? Then what? If you haven’t fundamentally changed the dynamics of the Postal Service, you’ll have a world-class crisis on hand. And Congress never responds well in a crisis.”

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