Postal reform bill flops in House committee

A compromise plan for reforming the struggling Postal Service failed in the House Government Reform Committee Thursday after Republican leaders failed to assure Democrats that the measure (H.R. 4970) would get time on the House floor.

Many Democrats on the panel support the bill, which is sponsored by Republican John McHugh of New York. But ranking member Henry Waxman, D-Calif., said he would not back it without a guarantee of a vote by the full House.

"I don't want to vote against this bill. We've worked too hard on it," Waxman said. "But ... I don't think it's fair to the committee's members to bring up this important issue without any hope for floor action, and I don't see how it serves the cause of postal reform."

Waxman voted "present," and other Democrats followed his lead by, voting either "present" or casting votes against the measure. The bill was defeated 6 ayes to 20 nays [Vote 1], with nine members voting "present."

The legislation is designed to allow the Postal Service to function in a more business-like fashion, while maintaining universal service. The measure was carefully negotiated to appeal to moderate Republicans and Democrats, because conservative Republicans tend to favor privatizing the Postal Service, rather than reforming it. But with the limited Republican support, there was no chance of passing the bill after Waxman said he wouldn't support it.

The Postal Service, beleaguered by the rising use of e-mail and more efficient private competitors, is in poor financial condition. First-class postage rates will rise at the end of June for the third time in 18 months, and the service still expects to end the fiscal year more than $1 billion in the red--the third consecutive year of $1 billion-plus losses. The service is also approaching its $15 billion statutory borrowing limit.

"With no limits on rates, it is reasonable to assume that a 75-cent stamp is around the corner," the committee chairman, Dan Burton, R-Ind., predicted.

The bill would force the Postal Service to pay income taxes on services that compete with private companies, limit its investments to postal activities and block side businesses such as phone cards, and require that it abide by local zoning and planning laws.