USPS “Officially” Opposes Senate Reform Bill–but Does That Matter?

On Jan. 24, the Board of Governors of the U.S. Postal Service officially declared its opposition to postal reform bill S.662. But few expect that declaration to have any effect on the bill’s progress.

In a letter to Sen. Susan Collins (R-ME), co-chairperson of the Postal Oversight Committee, the board stated that serious discrepancies still exist between the bill’s provisions and recommendations of the president’s commission on reform. Additionally, the letter reiterates that since the bill proposes to return responsibility for military retirement expense to the U.S. Treasury, this would certainly prompt a presidential veto.

Some in the mailer community view the letter as a last-ditch effort by the USPS to influence the Senate regarding reform. “People wonder why the Postal Service takes so long to engage in debate,” says Bob McLean, executive director of Arlington, VA-based industry group the Mailers Council. “This letter is really too little too late at this point. Now it’s more of a signal that the board hopes to be involved when the bill does go to conference committee.”

Others think that the letter has done little more than anger the legislators who have been pushing for postal reform for the past few years. “Ironically, the Board of Governor’s letter may help reform legislation,” says Ben Cooper, chairman of the lobbying group Coalition for a 21st Century Postal Service. “Think about it: Once you’ve come out publicly in opposition to something, you won’t get a chance – or care – whether or not it gets fixed.” In other words, by raising the ire of members of the Senate’s Postal Oversight Committee with the letter, the USPS may have galvanized them into further action.

Perhaps hoping to win over consumers where it failed to sway legislators, the Postal Service on Jan. 25 released a statement warning that the passage of the pending postal reform legislation could increase stamp prices as much as 20% in the near future. “Under current law, the Postal Service has managed to keep the cost of postage below the rate of inflation,” Tom Day, senior vice president for government relations, said in the release. “But this bill not only strips the Postal Service of much of its management authority but almost guarantees as a hefty rate increase.”

Day said that the Postal Service has worked hard over the years with all concerned parties involved with this attempt to modernize postal legislation. Postal operations are funded entirely by the sale of postal products and services, not through tax revenue. The Postal Service also contends that S.662 proposes a new regulatory commission that would be given authority to override virtually any operational decisions made by the USPS.

Next up: the conference committee
As for the legislation itself, the next step is a conference committee. Even though H.R.22, the sister bill to S.662, was passed by the House of Representatives this past summer, a conference committee representing both Congressional houses must convene to determine the fate of both bills and ultimately treat them as one. As of Jan. 25, McLean felt there was a very good chance that S 662 would make it to the Senate floor within the next week.

“The dispute over ‘fair and equitable’ language seems to have been resolved within the Senate,” McLean says, referring to issues that arose in fall 2005 that led small mailers to fear they would be paying for discounts that the USPS might offer larger mailers. Sen. Kit Bond (R-MO) had blocked the Senate bill, claiming that it lacked language that would allow smaller mailers to challenge prices for first-class mail if those rates are not perceived as “fair and equitable.”

With those potential stumbling blocks out of the way, McLean feels confident that a conference committee can’t be far away. “We never thought we’d get this far,” he adds.

A conference committee could take several weeks to render a decision once it’s convened, however. And convening the committee is never easy.

Nonetheless, says McLean, “mailers need to remember that this is potentially a big week for them. If the bills are allowed to pass, it would not only eliminate the burden of the escrow account, it would also reverse military pensions.” But if the escrow situation is allowed to continue, it could be kept in place until 2071 – where mandated escrow dollars could rise to as high as $7 million annually by 2024. “That would price the Postal Service out of existence,” he says.

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