Grim Outlook for Postal Reform

With Hurricane Katrina and the chief justice nominee hearings further complicating matters in Washington, postal reform is on the back burner for now. What’s more, in a Sept. 13 letter to Government Reform Committee chairman Tom Davis, the Postal Board of Governors expressed concerns about the flexibility of the two reform bills, and doubt over whether the respective provisions of each would ultimately “accomplish the postal service’s mission.”

The letter also cites the growing gap between revenue and costs, noting that it takes nearly three pieces of advertising mail to generate the same contribution as one piece of first class mail. Since first class mail volume continues to drop, the BOG feels that an increase in advertising mail will not offset that decline, and that taxpayers would ultimately bear the burden of rising postal rates if the current proposed legislation is enacted.

“The timing of this letter is not appreciated,” says Bob McLean, executive director of the Mailer’s Council. “Why send such an extremely detailed criticism of the reform bill now?” The letter puts an unnecessary strain on members of the Postal Oversight Committee and the Postal Service in general, he says; it also damages the momentum reform gained during the summer just prior to the August recess.

In July, Congress approved Bill H.R. 22, the Postal Accountability and Enhancement Act, in a resounding vote of 410 to 20. The vote for Bill S. 622, the reform bill’s counterpart in the senate, was scheduled for early September. But when Hurricane Katrina struck the Gulf Coast on Aug. 29, the USPS had more pressing matters to attend to. The Postal Service estimates more than $100 million in damages from the disaster, and has had to focus much of its efforts on helping get mail and needed supplies into the region. The agency also lost some 6,000 postal vehicles in the affected areas. As a result, it’s highly likely that the 5.4% postal rate hike will take effect in January, rather than be delayed until March or April 2006 as many mailers were hoping.

But postal reform is not dead yet: as McLean says it will just take more time. There is still a chance that Bill S. 622 will be voted on in October, but even if that happens, a conference committee must convene to approve both the separate House and Senate bills as one. The postal community remains hopeful about moving forward next month, but it doesn’t look good right now. Either way, “anyone who tells you they know what will happen next—don’t believe them,” McLean says.

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