Lame-Duck Congress may push postal reform

November 28, 2012

WASHINGTON—As the nation waited over Thanksgiving to learn whether Congress would push the economy over the fiscal cliff, watchers of the U.S. Postal Service were paying attention to rumors of a deal on postal reform legislation that might get a bill through the 112th lame-duck Congress.
Public reports in CQ Roll Call and the Hill, both community newspapers covering Capitol Hill, indicated that postal leadership was considering whether eliminating Saturday mail delivery for all but package mail could be feasible. Sponsors of the two leading postal reform bills, S 1789 and HR 2309, were making no public comment but a meeting among principals occurred just before the holiday to see if they could iron out their differences.
The Senate last spring passed its reform bill, which would have introduced more due process into the closing of postal sorting facilities and post offices and put the elimination of Saturday delivery on hold for two years. It also would have given USPS some immediate cash relief in the form of returned overpayments on federal pension funds. The House bill, which favored putting the institution under a federal control board, passed the Oversight and Government Reform committee and then stalled on its way to the House floor. Opposition from rural Republicans to ending six-day mail and closing small town post offices was cited as one reason for the stall.
The National Newspaper Association has opposed ending six-day mail delivery because of its impact on newspapers with Saturday issues and on slowing cash payments in the mail. It has cited analysis by the Postal Regulatory Commission questioning the reliability of USPS’ predictions that it could save more than $3 billion. NNA is also supporting efforts to amend the law on Negotiated Service Agreements, which now permits special deals like the 22 percent to 35 percent postage discounts extended to Valassis Direct Mail Inc.
But with USPS reporting first-quarter earnings losses near $16 billion, pressure in Congress to act before the institution runs out of money was intense.
The National Association of Letter Carriers, representing city carriers, and the National Association of Rural Letter Carriers, however, were pushing back hard on the Postal Service’s insistence that a five-day mail scheme was necessary. Rather, the unions said, the culprit is 2006 legislation that requires USPS to prepay retiree health benefits. Although the Postal Service in fact is not making those payments when due, $11 billion of the losses on its books came from the charting of the liability for the unpaid contributions.
“The pre-funding mandate is a problem that Congress created, and which Congress should fix. It would be absurd to dismantle the universal network and degrade service to the public and to businesses—when almost all of the red ink has nothing to do with those services but stems directly from the external burden imposed by Congress,” the NALC said in its statement on the losses.
NNA Chief Executive Officer Tonda Rush, NNA’s postal lobbyist, said she believed a deal eliminating Saturday mail service would be harder than it looked.
“Clearly, USPS needs help from Congress to get out of the hole. Buried within the politics of the health benefit payment is another more troubling number: USPS lost about $2.5 billion on operations alone in the first quarter. So pressure to end Saturday mail is intense.
“But the real question is whether dropping out of a day of delivery will actually set off even steeper losses that require even further cutbacks of service. Some foreign post offices that dropped Saturday mail soon found themselves eliminating a second day as well. The trouble is figuring out what the drivers of loss are. But it is clear that for mailers needing Saturday delivery, like many newspapers, a five-day delivery scheme sends a huge vote of no confidence in the mail system. If USPS were to try to paper over that problem by delivering packages, it would take the risk that people would suspect it of playing favorites for one industry.”
The House and Senate will come back from Thanksgiving recess Nov. 26 and 27. Congressional leaders have suggested they may remain in session through Christmas Eve if that is what it takes to get a budget deal. In addition to addressing the looming sequestration of federal funds if a budget deal isn’t done, it still has to figure out what to do on a farm bill that is expiring and address the nation’s debt ceiling, which may have been hit before the 113th Congress reconvenes.
Some hope postal reform will find a way to work into that busy agenda.

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