Senate Homeland Security and Governmental Affairs Chairwoman Susan Collins, R-Maine, sent the proposal to House negotiators just before the August recess. It essentially mirrors the Senate-approved bill and is the result of talks between the Senate committee and House Government Reform committee staffs.
Members from both chambers have worked to smooth out differences between their bills while also attempting to write an agreement that would meet White House approval. The Collins proposal upholds the Senate's stricter rate cap provision, requiring that postal rate increases not exceed the rate of inflation.
An exit clause that would allow the agency to break that rate cap only in times of major emergencies is included in the conference agreement proposal. Both the strict rate cap and exit clause provisions are favored by mass mailers, who want a bill that ensures the lowest possible prices, but are opposed by unions seeking more flexibility in rate setting.
Despite the Collins proposal -- the most recent movement on the overhaul bill -- the outlook for final passage remains uncertain. White House officials oppose key sections of the House and Senate bills that would allow the agency to use some of its $3 billion escrow account to pay for operational costs rather than solely for its retirement benefits.
The White House also has demanded that the Postal Service continue paying the military pensions of its employees, which House and Senate members oppose. The bills passed overwhelmingly in both chambers would require the Treasury Department to pay for those pensions, which total about $27 billion.
Although Collins and House Government Reform Chairman Rep. Tom Davis, R-Va., met with White House Chief of Staff Joshua Bolten in June to attempt to reach a compromise, the conference proposal maintains the approved Senate language on both issues.
A spokeswoman for Collins said House and Senate members have not discussed the proposal since returning from the August recess, but a spokesman for Davis said the Republican and others "continue to work on consensus language on a daily basis. We are closer than ever to reaching agreement, getting through conference, and moving legislation to the floor."
Davis' most recent prediction, made just before the House adjourned for the August recess, was that a conference committee would meet to approve the bill before October. The Senate named conferees shortly after approving its bill last February, while the House, which voted on its measure in July 2005, has yet to appoint conferees.