Postal reform proves difficult as bill heads to committee

Some call it postal transformation. Others refer to it as postal reform. But more and more, overhaul of the U.S. Postal Service is looking like mission impossible. The House Government Reform Committee is expected to mark up a postal reform bill June 20. If the session actually takes place-the mark up was cancelled twice during the past few months-it will be the first time in seven years that the full committee has considered postal reform legislation. Rep. John McHugh, R-N.Y., has been pushing for an overhaul of the financially troubled agency since the mid-1990s. Despite near unanimous agreement that something needs to be done, there is little consensus over what that something is. Perhaps the biggest problem facing lawmakers is dealing with the agency's mandate to provide universal service. While not originally defined in statute, universal service is the theory that mail gets delivered to every address at a uniform rate. Over the years, Congress has mandated such things as six-day delivery. Universal service also applies to the notion that everyone has equal access to postal services. Legislatively, that concept has played out in a requirement prohibiting the agency from closing post offices, even those losing money. It's clear, however, that decision makers must re-think the definition of universal service. First Class mail is in decline and the agency is facing its third consecutive year in the red. Comptroller General David Walker laid out another set of troubling facts at a June 18 Brookings Institution conference on the Postal Service: The agency will reach its $15 billion borrowing limit within the next two years; there is no debt repayment plan; costs are continuing to rise faster than revenue; the agency has $49 billion in retiree health care costs that are not built into the rate-setting process and therefore can't be recouped; and an addition $32 billion must be earmarked for pension payments. Addressing universal service is a sticky subject. Members of Congress are hesitant to discuss the topic if it means closing postal facilities in their districts. The agency's largest employee union, the American Postal Workers Union, is also leery of efforts to consolidate facilities. Eliminating a delivery day is not well received by major mailers who rely on First Class mail to get their advertising to millions of households. The legislation before the House committee tries to tackle the issue by mandating that the Postal Rate Commission, which would be transformed into the Postal Regulatory Commission, estimate each year how much public functions cost the Postal Service. It would be the first attempt to quantify the costs of universal service. The bill also seeks to establish a national commission to look at the Postal Service's long-term future. The notion of such a commission is gaining substantial support. Most recently, the Mailers Council, the mailing industry's largest trade group, called on President Bush to create a commission. A similar commission in 1968 led to a 1970 law that created the modern-day Postal Service. There is little reason to believe that reform legislation will move much beyond the committee level at this stage. Union organizations as well as UPS and industry groups are opposed to portions of the bill. They've been successful in holding the legislation down for the past seven years, and few doubt their ability to bring the current effort to a halt. Additionally, most members of Congress have yet to become fully engaged. Sen. Thomas Carper, D-Del., told the Brookings gathering that it will take a "train wreck" for Congress to act. Carper sits on the Senate committee with oversight of postal operations. He also endorsed the notion of a presidential commission. Meanwhile, the Postal Service is trying to implement parts of its own transformation plan. As directed by the General Accounting Office, the Postal Service developed a plan with short-term solutions and long-term legislative options. The American Postal Workers Union, however, is distrustful of the plan and has shown little willingness to discuss major structural changes that would affect how the agency operates.