Postal Reform News

Agenda for Senate Meeting on June 2, 2004 (5/28/04)

Sen. Collins and Carper to Introduce Major Postal Legislation On Thursday
Coalition of 156 Business, Non Profit Organizations, Two Postal Unions and the Postmasters Association Endorse Senator Collins Postal Reform Legislation (5/19/04)

Committee on Government Reform Business Meeting
Approved Wednesday, May 12, 2004
H.R. 4341, “Postal Accountability and Enhancement Act of 2004”

National Rural Letter Carriers Position on Postal Reform-The NRLCA has always recognized and has been supportive for the need of Postal Reform. The Postal Service is the linchpin of a $900 billion mailing industry, employing 9 million people, and represents 9% of the GDP. Postal Reform is a jobs bill. It will not only affect the 730,000 postal service employees. Postal Reform will affect everyone from the paper industry to the printing industry to the mailing groups to the entire financial services industry who count on the postal service for their day-to-day operations.  International Paper, and member of the Coalition the NRLCA belongs to, has launched a new external website designed to assist organizations with grassroots activity on the postal reform issue. This is a great website. Please take a couple of minutes and look to see what our Coalition partners are doing. http://www.ippaper.com/postal/ (5/28/04) (source: NRLCA.org)

Postal Reform bill hits snag; lawmakers scramble to rewrite it

Businesses Object to Provision in Postal Reform Legislation

May 5--WASHINGTON -- A long-awaited proposal to reorganize the U.S. Postal Service hit a snag Tuesday when businesses objected to a provision backed by the nation's biggest postal workers' union.

Lawmakers scrambled to rewrite sections of the bill -- to which Rep. John M. McHugh, R-Pierrepont Manor, is a major contributor -- in time to bring it to a vote next Wednesday, instead of this Thursday.

The legislation would change the way the Postal Service sets mail rates and attempts to separate the agency's first-class mail monopoly from its competitive services such as package delivery. Without an overhaul, a presidential commission reported, the Postal Service faces an ever-worsening financial crisis because of declining letter mail revenue.

The latest version of the bill ran into trouble over a section dealing with discounts the Postal Service offers mailers who presort or put bar codes on mail before having it sent, for instance -- a practice that saves the Postal Service money. Organized labor wanted to limit the discounts to the actual costs the Postal Service saves, but as written, the provision would mean higher rates for all mailers, business interests argued.

"There's not a whole hell of a lot in the bill worth doing," said Gene A. Del Polito, president of the Association for Postal Commerce. "At this point in time, the baby's ugly."

Tuesday's retreat reflected the difficulty lawmakers have had drafting a proposal that satisfies all sides. The Postal Service, nonprofit mailers, package delivery companies and labor unions have struggled over the issue for the better part of a decade, and Mr. McHugh has been at the forefront most of that time through his chairmanship of postal-related panels.

The controversy arose before the bill actually became available. The House Government Reform Committee released a "discussion draft" just two days before the scheduled vote in committee, a period Mr. Del Polito called too short to allow a full debate.

Mr. Del Polito said the section on postal discounts, known as workshare discounts, could raise postal rates by as much as $50 million a year. "I'm afraid we'll lose mailers," he said.

Phone calls to the APWU went unanswered Tuesday.

Mr. McHugh said the APWU had made clear that the provision is a top priority, and he said the union may drop its support for the bill if lawmakers strip that section.

On the other hand, Mr. McHugh said, "if you're a mailer, you don't like this provision."

Mr. McHugh said one problem is that workshare agreements that have already been in place stand to be wiped out, which would trouble mailers.

The APWU has been one of the sore points in postal discussions the past two years, voicing concerns about worker protections and possible outsourcing of postal business.

Convincing the APWU that the bill is necessary has been challenging, Mr. McHugh said. But the union, with a new president, has warmed toward the concept since dropping out of the discussions a few years ago.

In the past, postal reform fizzled after disagreements within the industry. But some lawmakers and others involved in the effort say they have a better chance this time. A presidential commission agreed with many of Mr. McHugh's dire warnings for the future of mail delivery, giving the issue the political backing of the White House for the first time.

A postal reform bill has also gained momentum in the Senate. That bill, being drafted by Sen. Susan Collins, R-Maine, and others, could face a vote later this month.

If the bill does not reach the House floor this year, it would have to be reintroduced next year and go through committee again.

Other provisions in the bill replace the Postal Rate Commission with a Postal Regulatory Commission that would have broader oversight authority. The proposal also generally limits postal rate increases for first-class mail to the consumer price index and creates a separate fund for revenue generated by the Postal Service's competitive products.

(source: Watertown Daily Times via Postal Reporter reader or to subscribe to the newspaper, go to http://www.wdt.net  )

Want Postal Reform? Seize the Day-"There's a great deal that can be done today without a new postal law. For instance, there is absolutely nothing preventing the U.S. Postal Service and its employees from working out some of the many differences that have made their relationship anything but smooth. Similarly, there is much the USPS and the Postal Rate Commission can do (within the context of current law) to address many of the complaints that mailers and the President's Commission have noted about rates and classification." GENE A. DEL POLITO is president of PostCom (5/15/04)

Filling the Mailbag on Postal Bills - As lawmakers begin taking up postal overhaul bills this month, several interest groups -- including commercial mailers, postal competitors, consumer groups and labor organizations -- will be watching, prepared to redouble their lobbying efforts for postal reorganization nearly a decade in the making, Congress Daily/A.M. reported. The House Government Reform Committee could approve postal restructuring legislation as early as next week, and the Senate Governmental Affairs Committee will likely consider a bill before the Memorial Day recess, Congress Daily/A.M. says

From Business Mailers Review via Postcom.org: "If postal reform dies, the single most responsible party will be the APWU and those who allowed the organization to maintain its intransigence," said Gene Del Polito, president of the Assn. for Postal Commerce. "This is reckless politicking. Any lawmaker who is serious about reform ought to seriously question whether this is the way it ought to be done."

From Magazine Publishers Association: "There is also disagreement among the sponsors as to how to handle workshare discounts. While the Draft, like HR 4970, includes a requirement that the Postal Service report annually on costs avoided and cost pass throughs for market dominant products worksharing discounts, the APWU is insisting on an absolute prohibition on discounts that exceed cost avoided. Mailers have been pointing out that in most cases discounts that exceed cost avoided are the result of sound economic and policy judgments and are beneficial to the Postal Service's operational and financial performance, as well as to the mailers who use the discounted rates. "

One Step Forward Two Unresolved Issues Back-The first unresolved issue involves a proposal by the American Postal Workers Union to require no more than “100% pass through” of any savings from worksharing by mailers. While it seems rational to not give a mailer a 6% discount for a 5% savings, the system does not work as cleanly as that. Often the discount exceeds the savings due to efforts to bring additional business to a new product and the process of calculating the “pass through” is often imprecise.

GROUP WARNS OF LOSSES WITHOUT MAIL REFORM -Thursday, May 6, 2004-A decline in mail volume and a steady rise in delivery points and expenses will cause postal price increases and major job losses nationwide if the delivery service is not reformed, according to a group pushing for change. Maine would lose an estimated 3,500 to 7,000 jobs, depending on whether the drop in volume proves to be 10 percent or 20 percent, the Envelope Manufacturers Association argued in its study.According to the association report, some of the threatened organizations include the U.S. Postal Service, which is the seventh largest employer in Maine, with more than 4,400 workers, as well as paper manufacturers, printers and catalog companies. "This is about so much more than reforming the U.S. Postal Service. This is about the economy, this is about jobs, this is about the future," said U.S. Sen. Susan Collins, R-Maine, whose committee has jurisdiction over the Postal Service.

(source: Portland Press Herald)

Postal service loses money on both urban and rural routes (pdf)-The U.S. government first got involved with the postal services as a way to support the growth of democracy. The more modern defense is cross-subsidization, where the profits in one region can offset losses incurred on less populous routes -- ensuring universal service to rural areas. Another defense is that there are economies of scale, with lower average costs, due to the size of the postal service and amount of mail. However, the study concludes that neither of these justifications are valid:

Related Links

- Easy Come, Easy Go? Postal Bill Markup Postponed

- Draft Postal Overhaul Bill Draws Criticism from Mailers