New postal reform bill imminent
July 3, 2013
WASHINGTON—The House Committee on Oversight and Government Reform kicked off a new round of debate in June on U.S. Postal Service legislative reform by circulating a new proposal by its chair, Rep. Darrell Issa, R-CA.
The bill, not yet introduced, would be similar to Issa’s proposal during the last Congress, but has some key differences that the sponsor evidently believes will help to avoid the roadblocks that kept the bill from passage in the 112th Congress.
Here are some of its provisions:
- Put the Postal Service under a five-member “Postal Service Financial Responsibility and Management Assistance Authority,” known informally as a “control board” and modeled after the board set up to help the District of Columbia recover solvency in the 1990s. The board would completely replace the existing USPS governors and would continue to rule on virtually every aspect of USPS until USPS recovered consistent profitability.
- Allow the immediate end of six-day delivery of letters and newspapers, but allow delivery of packages. It would allow only two consecutive days of non-delivery in a week. Issa addresses complaints that on federal holidays, citizens would not receive mail for three days.
- Permit Periodicals publishers access to rural mailboxes for delivery of newspapers on non-delivery days. This provision would be the first statutory relaxation of the Private Express Statutes in more than a decade.
- Gradually end delivery to residential doorways, setting up a fund to help communities make transitions to cluster boxes and curbside delivery. USPS said this move could save more than $4 billion.
- Gives residents more power to oppose post office closings that result in contract post offices if there is no available post office within 2 miles.
- Allows postage rates for Periodicals to be increased by 2 percent annually over inflation if the revenue does not cover at least 90 percent of postal costs.
- Slightly strengthens the ability of USPS competitors to challenge market-dominant Negotiated Service Agreements similar to that proposed last year for Valassis Direct Mail, but makes it easier for other types of NSAs to pass muster.
The bill also offers relief to USPS in contributing to a retiree health benefit fund that was instituted in the 2006 reform legislation and has added roughly $5.5 billion a year to USPS costs. The new bill would allow USPS to contribute on a less aggressive schedule. It has not made the required payments for the past two years because of its financial status.
The proposal deals organized labor significant blows by cutting off the ability to remain indefinitely on workers’ compensation plans instead of converting to retirement benefits and prohibiting contracts with no-layoff clauses. However, it does not grant USPS’ biggest wish: to allow it to set up its own health care plan.
Issa has said he intends to try to pass the bill this summer. No companion bill has yet been introduced in the Senate.
Meanwhile, in the absence of final legislation, USPS finances continue to worsen. Suggestions that substantial postal rate increases may be in the offing have turned into active possibilities. The USPS Board of Governors met behind closed doors in June, presumably to consider whether to hike rates beyond inflation.
The National Newspaper Association joined the Association of Magazine Media, Direct Marketing Association and others in reviving the Affordable Mail Alliance, which defeated similar steep rate hikes in 2010.
NNA President Meryl Baranczyk publisher of the Mountain-Mail in Salida, CO, said, “The potential for alarming rate increases is very real. Despite massive reductions in mail processing capacity, USPS started late to reform its cost structure and still is tied to a human resource cost that far outweighs the private sector.
“It cannot seem to outrun the declines in mail volume. Altough we are distressed that the cost management has resulted primarily in actions that also cut service, we also have to be mindful that Congress does not intend to bail out USPS for its errors. It expects mailers to pay for them.
“We have to be vigilant and stick to our guns on our positions. Cost reductions that degrade service are simply accelerating today’s problems. NNA will be actively involved this summer in helping legislation to get passed.
“To that end, we are asking our members to give us some feedback in a survey circulated by e-mail in June. We know that many conditions have changed in our industry since we began postal reform yet again.
“We continue to fight for six-day mail service, and to help newspapers work around other problems. We need to know where our members’ chief concerns are now. I hope we will get wide response so our board can consider next steps.”
NNA Postal Committee Chair Max Heath reiterated the importance of feedback from members.
“Having been through one decade-long reform effort in the 90s and now this one, which is already four years old, I am keenly aware that we can wait for a long while for Congress to get its act together. But once it begins to move, it can lock in on the big pieces of a bill pretty quickly. The Postal Service is in terrible financial shape, and whatever we may think about how it got there, we need for it to get fixed,” he said.
Deb McCaslin, NNA Government Relations chair, said she expected July to be an active period.
“We will send congressional alerts, and we’ll be here to answer questions. There is no voice in our industry louder and more effective than community newspapers when we are concerned about our ability to cover the news and serve our communities. She is publisher of the Custer County Chief in Broken Bow, NE.