The U.S. Postal Service would lose its current authority to offer non-postal-related products and services, under draft legislation by Rep. John McHugh (R-NY).
While McHugh’s proposal drew applause from the Direct Marketing Association and the Alliance of Nonprofit Mailers, most other industry groups withheld comment pending a point-by-point review.
In the Postal Accountability and Enhancement Act, the USPS would retain its monopoly over addressed first class, periodical and Standard Mail and be allowed to spin off Express Mail, Priority Mail and package services into a separate profit-making operation. But the postal service would have to pay federal income taxes on any profits it makes from these services.
The postal service’s Board of Governors would be allowed to set postal rates tied to the government’s Consumer Price Index (CPI) for fairness to postal customers, but those rates would be subject to review by the Postal Rate Commission. The commission would gain increased authority–including subpoena powers–over the USPS.
For instance, the PRC could order the USPS (which would have to provide its annual financial reports) to stop providing a product or service that is not directly related to the “physical delivery of letters, printed matter, or packages weighing up to 70-pounds.”
The USPS would be allowed to enter into negotiated service contracts with specific customers. Those contracts would be subject to review and cancellation by the enhanced PRC.
Also, while the USPS would retain its rate-making authority for international mail, the proposed legislation would clarify the role of the U.S. State Department in setting the postal service’s international mail policies, such as the USPS’ contracts with airlines to carry international mail.
Postal officials listed the keys to postal reform to Sen. Joseph Lieberman, chairman of the Senate Government Affairs Committee. That list includes giving the USPS pricing flexibility; allowing it to make a profit; gaining the authority to make network improvements; pay changes; and transforming the USPS into a for-profit operation. A for-profit operation would be owned by the federal government, an employee-owned stock company, or a traditional stock company owned by the public.
