Congress started the process yesterday that could lead to the most significant postal reform since 1971.
The Government Reform Postal Committee chaired by Rep. John McHugh (R-NY) held the first of three scheduled hearings on the proposals made last summer by the President's Commission on the Postal Service.
Despite interruptions for roll calls, the zeal for reform was expressed by witnesses throughout the day. Comptroller General David M. Walker commented that "Congress needs to undertake as much as can be done as early as possible."
But one witness, Postmaster General John A. Potter, threw a damper on the Commission's suggestion that the existing Board of Governors be replaced by a postal board of directors.
The problem is that the three board members would be appointed by the President, and that they, in turn, would appoint the first eight independent board members. (The current law requires that no more than five postal governors may belong to the same party, Potter said.)
"This could result in a highly partisan board," Potter said. "Moreover, the Senate's current statutory role of advise and consent in connection with Board appointees would be eliminated."
Potter also argued that the proposals on rate-setting would "remove the determination of how much money is needed to run the nation's postal system from the operators—those with the day-to-day responsibility of running the postal system—and transfer it to the Postal Regulatory Board."
And the PMG challenged the notion that the regulatory board be granted authority to "revisit the vital national issues of the postal monopoly and universal service. From the perspective of the postal service, these are clearly issues of broad public policy. They are not regulatory issues."
But Potter accepted several of the Commission's findings, and agreed that the postal situation must be addressed "before it results in a crisis."
But is there even a remote chance that Congress will tackle postal reform during an election year?
"We are cautiously optimistic this time because there appears to be much more of a sense that the postal service is broke and must be fixed, whereas a year or two ago, we didn't have that point of view in Congress," said H. Robert Wientzen, president of the Direct Marketing Association.
"It's not a slam dunk, but this is the closest we've come in the nine years that Congressman McHugh has been pursuing reform, added Robert Taub, chief of staff for Rep. John M. McHugh. "We're all pretty much singing off the same song-sheet."
Consensus does seem to exist for a chance in "the fundamental process of setting rates," Wientzen said. "Of course, that's the centerpiece of the DMA's position."
That move would entail requiring the USPS to "break even and decide how much it's going to spend and how much it's going to charge," he continued. It would require that the USPS report its financial results "more like a private business, like a corporate P&L," Wientzen said.
But some issues are stickier, like what to do with the funds piling up in an escrow account thanks to passage of the Postal Civil Service Retirement System Funding Reform Act of 2003.
"We would like to see the money applied to the general operations of the post office to reduce cost," Wientzen said. "Some members of the Congress and perhaps the Administration are more cautious about that."
Equally troubling is how to handle the payment of benefits for military veterans who work for the USPS.
"If I serve three years in the Army and then go to work in the post office and retire in 17 years, the postal service pays for my retirement for all 20 years," Wientzen said. "That's the only federal body that does that. And, of course, the post office is a favorite place for veterans to get jobs."
The committee, which is part of the Committee on Government Reform chaired by Rep. Tom Davis (R-VA), has scheduled a second hearing for Feb. 5 in Chicago. Members will hear from leaders of postal labor and management groups. On Feb. 11, they will hear testimony from chief executives of USPS clients and competitors.
According to Wientzen, a high administration official has said that a bill could be written by April and quickly moved out of committee for a vote in the fall.
One danger is that Congress will dice the various proposals and put them into separate bills. But Wientzen, who is set to retire this summer, is confident that he is going to get a fine going-away present in the form of an omnibus package.
"A slam dunk today becomes a problem tomorrow and an impossibility the day the day after, but there does appear to be a consensus for reform," he said.
