Mailer groups hoped the House would pass legislation early next week that would clear the way to relieving the U.S. Postal Service of past retiree pension obligations and forestall a rate increase until 2006.
But they warned the legislation only buys the USPS a limited amount of time to reform itself.
Late Wednesday night, the Senate unanimously passed S 380, a bill that would get the Postal Service out of paying retirement obligations of many former employees.
A similar House bill, HR 735, was scheduled to be voted on Thursday but was taken off the floor because the House got bogged down by consideration of President Bush’s wartime supplemental appropriation. The bill will be taken up Tuesday.
Under both postal bills, the USPS keeps billions of dollars it would have paid into the Civil Service Retirement System fund, which covers employees who joined the agency by 1983.
Projected savings include $2.9 billion this fiscal year and $2.6 billion in fiscal 2004, according to the USPS. The Postal Service would be required to use the money to pay down its $11.2 billion debt and stave off rate increases over the next three years.
“This only buys us time until 2006,” said Gene Del Polito, president of the Association for Postal Commerce. “What we need is true comprehensive postal reform such as what Rep. John McHugh (R-NY) had always been looking for in HR 22.”
If passed, HR 22 would give the USPS more freedom to set its own rates based on market conditions and strengthening the Postal Rate Commission.
“It’s a short window of opportunity that we cannot squander,” added Neal Denton, executive director of the Alliance of Nonprofit Mailers.
Denton did note that passage of this legislation would give the Postal Rate Commission more time to approve negotiated service agreements with mailers. Simply put, negotiated service agreements enable high volume mailers to make their own arrangements with the USPS for greater discounts than they would get ordinarily.
Last fall, the USPS proposed a negotiated service agreement with financial mailer Capital One (Direct, Sept. 21, 2002).
Another benefit passage of the two postal pension bills currently under consideration would allow more time for the President’s Commission on the U.S. Postal Service to come up with recommendations for reforming the USPS without a rate increase.
In December, President Bush has created a commission to explore the USPS’s mission and operations and to study its role in the 21st century. The panel will study the state of the USPS and make recommendations to the President by August (Direct, Dec. 11, 2002).
Bob McLean, executive director of the Mailers Council said that these bills would still have to go through some minor procedures before they reached the President’s desk, but would probably get there before April 14, when Congress goes on recess.
Many mailers and industry groups worked closely together to try and make sure this legislation got through so fast.
“We got a hell of a lot of consensus from mailers and unions on these bills,” said Del Polito. “Let’s just hope that when it’s time to really reform the postal service that everybody doesn’t revert back to the same old factionalism.”
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