McHugh Taking Another Stab at Postal Reform

Rep. John McHugh (R-NY) is evidently a patient man, especially when it comes to overhauling the U.S. Postal Service.

For more than five years, McHugh has tried to reform the 31-year-old law that created the U.S. Postal Service, but he has failed to drum up enough interest among his fellow congressmen, mailers, and the USPS. Although the postal reform bills he introduced in June 1996 and January 1999 failed to clear a full committee of the House, McHugh plans to introduce yet another reform bill this fall.

This go-around, however, McHugh will be joined by Rep. Danny Davis (D-IL), giving the bill bipartisan support up front. “No Democrat has ever fully engaged in cosponsoring McHugh’s postal bills,” points out McHugh’s chief of staff, Robert Taub.

Taub says other factors, such as a coalition of mailers and USPS union representatives that have made their reform recommendations to McHugh, as well as two congressional hearings on the state of the USPS earlier this year, should also spur interest in the issue.

To improve the bill’s chances of making it at least to a full House vote, McHugh has been working with Government Reform Committee chairman Dan Burton (R-IN) in putting together the bill. “Burton has given McHugh his word that this is something Burton really wants to look at and pass during this Congress,” says McHugh spokesperson Chris Mathey.

Same idea, different climate

The circumstances surrounding the Postal Service have changed considerably since McHugh introduced his first reform bill in ’96. Back then, the USPS, which is mandated to break even, was in the middle of a four-year run of surpluses. But this year the agency is expected to lose $900 million-$1.5 billion.

Also in ’96, the agency was one year removed from a fairly modest postage increase — and it wouldn’t enact another one for three more years. This year the USPS has raised rates twice, and it’s likely to implement another — larger — increase by the end of 2002.

Nonetheless, observers are dubious that McHugh’s next bill will go much further than the previous ones. “It’s taken the House committee years to move a reform bill out of the subcommittee, only to have it stall at the full committee level,” says Neal Denton, executive director of industry group the Alliance of Nonprofit Mailers. “And the House is usually much faster at moving new legislative initiatives than the Senate.”

Gene Del Polito, president of the Association for Postal Commerce, puts it more bluntly: “I can’t give you a damn reason how the new bill is going to make it to the floor of the House. At most, it will kick up other ideas.”

What’s in the bill?

Recent meetings of mailers with the USPS have generated reform suggestions. Among those that are expected to be included in McHugh’s bill:

  • Rates would be adjusted using a formula that relies upon the Consumer Price Index.

  • USPS borrowing authority would be doubled from the current $15 billion.

  • The statutory break-even requirement would be eliminated to allow the USPS to generate profits, which would be used to fund new products and services. Profits could also be used to offer bonuses or incentives to postal employees to attract higher-caliber talent. Under the current law, surpluses cannot be applied to such ventures.

  • The role of the Postal Rate Commission would change from that of oversight in rate-making to that of an auditing body.

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