Postal Service lobbies against reform bill

Agency says Senate legislation likely to burden Postal Service with employees' military pension costs, limit managerial flexibility.

With the Senate poised to vote this week on a long-stalled postal overhaul measure, Postal Service management has suggested scrapping the legislation.

Taking up the bill under unanimous consent became possible Wednesday after Senate Homeland Security and Governmental Affairs Chairwoman Collins, the bill's sponsor, reached an agreement with Sen. Christopher (Kit) Bond, R-Mo., who placed a hold on the measure last year. But the Postal Service, which had supported the bill, sent a letter to every senator Monday opposing it.

"The letter was a bit troubling and, frankly, a little confusing," said a spokesman for Sen. Thomas Carper, D-Del., also a sponsor of the bill. "We've worked closely with the Postal Service over the past year and even the past few days."

In the letter, the Postal Service noted that the White House opposes a provision transferring to the Treasury Department the cost of employees' military pensions. The agency said that language could prompt a presidential veto.

A Postal Service spokesman said the USPS fears that once the bill goes to conference, lawmakers will agree to the administration's position on the military pensions, burdening the agency with the $27 billion in pension costs. If that happens, he said postal rates could jump as much as 20 percent.

Lobbyists for bulk mailers said the agency also is concerned about new management powers the bill gives to the Postal Rate Commission. The Postal Service's spokesman agreed, saying the legislation would "severely limit the Postal Service's ability to manage itself."

Collins and Carper tried to ease Postal Services concerns with a managers' amendment that would give USPS more flexibility in implementing banking provisions in the bill. The Postal Service's spokesman said those changes will make little difference.

The Postal Service also is opposed to the compromise Bond and Collins negotiated to move the legislation forward. That agreement would call for the Postal Service to set rates that are "reasonable and just," which postal lobbyists say would give small mailers a chance to challenge rates that they see as inequitable without slowing down the rate-setting process.

Bond originally wanted Collins to include language in the House version -- and approved by the full chamber in July -- calling for rates to be "fair and equitable." That provision was requested by mailers who rely on first-class mail, including Hallmark, which is headquartered in Bond's home state.

Bond said he was concerned that without the "fair and equitable" language, the Postal Service would set rates on first class mail unfairly high. But Collins said the provision could lead to a litigious rate-setting process.

L.L. Bean, which sends out larger parcels and is headquartered in Collins' home state of Maine, also opposed the "fair and equitable" clause.

The "reasonable and just" language placated small mailers, according to postal lobbyists. "They feel they've been taken care of," one lobbyist said.

But the agreement was not as warmly received by the Postal Service, which worries the language would limit the agency's ability to set rates and had opposed the "fair and equitable" provision.

The compromise "doesn't make any difference, it has the same net effect," the Postal Service spokesman said.