Postal Service overhaul clears first hurdle

By Zach Patton

May 13, 2004

The Postal Service could be restructured for the first time in more than 30 years, under legislation approved Wednesday by the House Government Reform Committee.

In a 40-0 vote, the panel approved the bill (H.R. 4341), which would grant the Postal Service more flexibility to change its rates and manage its costs, while increasing the power of the postal regulatory board.

House Government Reform Chairman Tom Davis, R-Va., praised the bipartisan cooperation on the bill between himself and Government Reform Ranking Member Henry Waxman, D-Calif., as well as Rep. John McHugh, R-N.Y., and Rep. Danny Davis, who served, respectively, as chairman and ranking member of the committee's special panel on postal reform.

Davis said the bill would streamline the agency's rate-setting process, which currently can take as long as 18 months. The bill also would allow the Postal Service to compete directly with the private sector on services such as Express Mail and Priority Mail. The legislation also enhances the role of the regulatory body that oversees postal activity.

The bill would also limit the agency's monopoly power by requiring it only to engage in "postal services," which are statutorily defined for the first time.

McHugh, who has worked to pass postal overhaul legislation for the past 10 years, called the bill "an excellent first step." He added: "Work will continue as we refine the bill for floor consideration in the coming weeks. This reform is a long time in coming, and I'm thrilled that we can now see the light at the end of the tunnel."

Davis said he hopes to bring the bill to a floor vote by mid to late June, and he has the assurances of House leaders that the bill will be brought to a vote.

Two committee members offered and withdrew amendments to the bill.

Rep. Steven LaTourette, R-Ohio, offered two amendments. His first would have explicitly prohibited the Postal Service from competing with private companies that offer packing and package preparation services. The Postal Service has never offered that service, but LaTourette said the agency "toyed with the idea" in the mid-1990s.

LaTourette's second amendment would have limited the Postal Service's ability to contract international mail delivery with foreign air carriers. The amendment would require the Postal Service to use American carriers whenever available. After assurances from Davis and Waxman that they would work with LaTourette as this bill goes to the floor, LaTourette withdrew his amendments.

An amendment from Rep. Tim Murphy, R-Pa., would have required the Postal Service to expunge any revenue deficiency it suffered by offering discounted rates to groups that do not qualify as nonprofit organizations. After Davis and Waxman promised to consider Murphy's provision, he also withdrew his amendment.

Meanwhile, Senate Governmental Affairs Chairwoman Collins and Sen. Thomas Carper, D-Del., Wednesday began distributing a draft version of their postal restructuring bill, which Collins said she will introduce next week.

That Senate draft would allow the Postal Service to more easily enter into worksharing contracts with private companies, and it requires the agency to develop a plan for future operations, including a consideration of how closing or consolidating mail facilities might affect postal revenues.

Labor groups Wednesday praised the House bill, particularly its prohibition of most worksharing agreements between the Postal Service and private companies.

However, American Postal Workers Union President William Burrus said he is concerned about the Senate draft, which he said includes proposals that "could result in the closing of post offices, reduced hours of operation, longer lines and poor service."

Burrus also said the Senate version could allow the Postal Service to negotiate service agreements with large commercial mailers, which he said would hurt postal customers and workers.

By Zach Patton

May 13, 2004