Stakeholders Voice Concerns Over Latest Postal Reform Efforts

House lawmakers earlier this month introduced a measure with bipartisan support to overhaul the U.S. Postal Service, and expressed optimism the draft bill would finally clear the hurdles that have prevented similar legislation from becoming law for several years running.

The reaction to the proposal, however, does not instill as much confidence. Stakeholders across the mailing industry have weighed in, with many either voicing either pointed criticisms or refraining from announcing any support. The Postal Service itself has declined to endorse the bill, saying only it is still reviewing the draft.

Stephen Kearney, who heads the Alliance of Nonprofit Mailers, said mailers have “plenty to worry about” in the bill. The measure would make permanent half of the emergency rate increase that expired earlier this year, which Kearney said would hit big users of the Postal Service just as they were adjusting to the newly lowered rates.

He also expressed concern about the draft legislation in several areas emphasizing USPS cover all of its costs, which he noted historically has meant increasing prices rather than cutting expenditures. He also pointed to the new structure for rate setting -- which would require each mail class and product “bear the direct and indirect postal costs” attributable to them -- as having potentially dire consequences.

“This new requirement runs the risk of knocking magazines, newsletters, catalogs, and other flat-shaped mail out of the mailbox,” Kearney said. “Then the reasons for consumers to go to their mailbox will diminish further, and the rationale for a government-run mail service will fade.”

Kearney also expressed skepticism about one of the cornerstones of the bill -- requiring all eligible postal workers and retirees to enter Medicare -- noting 25 percent of those eligible do not currently choose that option. The National Active and Retired Federal Employees Association declined to endorse the bill over the provision, saying the 76,000 postal retirees who elected not to enroll in Medicare should not be forced to do so.

The Medicare provision could unravel the entire bill, Kearney suggested, if the Congressional Budget Office does not give it a favorable score, or if the House Ways and Means Committee -- which has jurisdiction over Medicare -- does not sign off on the change.

David Williams, president of the Taxpayers Protection Alliance, wrote a blog post this week critical of the House bill titled “Return to Sender.” Williams called the measure “window dressing” that fails to address the “structural reforms necessary” to put the Postal Service on a path toward financial sustainability.

“Without such structural reform, this legislation serves as nothing more than a handout to the troubled agency,” Williams said.

He criticized the partial extension of the exigent price increase and the formation of a chief innovation officer who “will likely push for more ill-advised, new services without any intention of generating sustainable profits to pay down debts.” 

This bill does nothing to strengthen the U.S. Postal Service’s business model,” Williams said. “Conversely, it financially rewards the poor financial decisions the agency has enacted.” He added the sponsoring lawmakers should “go back to the drawing board.”

When introducing the draft legislation, Rep. Stephen Lynch, D-Mass., said the four major postal unions, which in the past have lobbied against attempts to reform the Postal Service, would not stand in the way of the House bill. The American Postal Workers Union, however, said it has not yet taken a stance on the bill and left open the possibility of rallying against it. Other labor groups have either said they are still evaluating the bill or have declined to weigh in.

Sen. Tom Carper, D-Del., who previously introduced his own postal reform bill in the upper chamber, applauded the House measure as an “important step forward” but declined to throw his full support behind it.  

“We must now work quickly to find consensus between the House and Senate proposals,” Carper said.

The House committee plans to close the comment period on the discussion draft shortly and subsequently formally introduce the bill and hold a markup. Lawmakers told stakeholders they optimistically hope to push the bill to the House floor before the seven-week recess that begins July 15.