Congress Makes Postal Reform a Reality

WASHINGTON, DC—Just when it seemed all the negotiating, back room compromises and incessant lobbying for postal reform over the last 12-plus years was about to suffer a silent death, Congress stepped up to the plate and delivered a hit for the U.S. Postal Service and the mailing community.

In the waning hours of the lame duck session, Congress passed H.R. 6407, much to the surprise and delight of those who profit through mailed communications, including commercial printers. The legislation, a dozen years in the making, goes a long way toward overhauling an institution that had been operating with business procedures established in 1970, long before alternative means of communication, particularly the Internet, became a viable threat.

The final hurdle for the reform is President Bush’s signature. He is expected to sign it into law.

“Passage of postal reform will allow this vital segment of the nation’s economy to remain viable and successful in the years to come,” said Michael Makin, president and CEO of PIA/GATF.

Among the highlights of the compromise:

• A cap on rates linked to increases in the Consumer Price Index (CPI) that would be reviewed after 10 years by a newly created Postal Regulatory Commission.

• The law requiring the USPS to make $3 billion in annual payments into an escrow fund would be repealed. That money could be used to cover retiree healthcare liabilities.

• Pension costs associated with military service credits are shifted from the USPS to the taxpayer.

• Replaces the highly litigious process of filing for rate increases.

At press time, it appeared unlikely that reform would have an impact on the pending rate case slated to be implemented in May. USPS could theoretically make one more additional increase request under the old rules, although that seemed unlikely.

NOTE: PI Weekly returns on January 5, 2007. Have a safe and happy holiday season!