Senate panel continues review of postal overhaul recommendations

Congress must include an inflation-based rate cap in its overhaul of the Postal Service, some of the nation's largest mailers testified Tuesday before the Senate Governmental Affairs Committee.

Ann Moore, chairwoman of Time Inc., said Congress must put in place a rate cap system keyed to inflation to limit "out-of-control postal costs." Postal rates have outpaced inflation by more than 60 percent in the past two decades, Moore said, and Congress must set maximum rate increases. Within that rate cap structure, however, the Postal Service should be allowed to operate with minimal oversight in setting rates, said Moore. Time Inc. is the Postal Service's biggest customer, and Moore said the Postal Service must establish a predictable, stable rate increase system for consumers. Senate Governmental Affairs Committee Chairwoman Susan Collins, R-Maine, said the lack of rate predictability affects not only postal consumers, but also other members of the publishing industry, including printers and "the paper mills back home in Maine," Collins' home state.

The committee also discussed other possible reforms, including changes to the structure and size of the postal workforce, giving the Postal Service greater flexibility to enter worksharing agreements with private companies, and establishing standards of service for every class of mail.

The Postal Service must also be able to adapt more quickly to changes in its consumer environment, said Mark Angelson, chief executive officer of RR Donnelly, the largest commercial printer in North America and one of the Postal Service's largest customers.

"It's inconceivable to me that adjustments in the Postal Service network are not ongoing," Angelson said.

The country has changed through shifts in population and technological advancements such as e-mail, he said, but the Postal Service's distribution network remains largely unchanged from when it was established in 1971.

"Facility locations, size, and transportation routes should all be changing constantly to keep up with demand, eliminate redundancy and overcapacity, and achieve productivity gains," Angelson said.

Tuesday's hearing was the fifth in a series of Governmental Affairs hearings to assess recommendations made in August 2003 by the Presidential Commission on the Postal Service.

One issue not addressed by that commission was environmental waste, which Sen. Richard Durbin, D-Ill., said was a glaring omission.

"It strikes me as odd that in all this conversation about the future, no one's really talking about the amount of paper that goes through the Postal Service," Durbin said. He suggested offering lower postal rates to magazines that use a certain amount of post-recycled waste, or penalizing those that do not with higher rates.

Collins plans this year to draft bipartisan reform legislation with Sen. Thomas Carper, D-Del., and she said today that passing a reform bill this year is "essential." The Governmental Affairs Committee will hold a sixth reform hearing Thursday, hearing testimony from the Postal Service's largest competitors, Federal Express and UPS.

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