UPS gets victory with House postal vote
Legislation that would let the U.S. Postal Service operate more like a company was defeated in a House committee after Democrats and Republicans balked at granting the power to set rates and sell bonds.
The House Government Reform Committee rejected the measure in a 20-5 vote that marked a victory for Atlanta-based United Parcel Service.
The world’s largest delivery company has lobbied for several years against legislation that would allow the postal agency to negotiate discounts with large-volume customers like magazine publishers.
The postal service’s board of governors had asked Congress for legal changes to help it cope with an anticipated $1.3 billion deficit for 2002.
Representative Steven LaTourette, a Republican from Ohio who voted against the bill, said he has Teamsters union constituents who “understand this legislation, the impact upon their businesses and occupations, and they don’t like it.”
UPS, the largest employer of Teamsters members, lobbied hard against the measure because the company said there weren’t enough protections in place to stop the postal service from subsidizing competitive products using first-class mail revenue.
The post office holds a monopoly on the delivery of letters, bills and other mail at that rate. It competes with UPS and FedEx Corp. in overnight delivery.
“I really don’t believe UPS wants us to solve this problem,” said House Government Reform Committee Chairman Dan Burton, an Indiana Republican. “Their pressure and their influence has been felt, not to mention the tremendous amounts of money they give to various members of Congress and to the political parties.”
The postal service anticipates losses of $2 billion to $3 billion for 2003 after the anthrax terrorist incidents last year and the U.S. recession cut mail volume. First-class stamps are set to increase by 3 cents on June 30, and lawmakers warn more rate increases are likely in the future.
“With no limit on rates, it is reasonable to assume that a 75-cent stamp is right around the corner,” Burton said.
UPS said reshaping the postal agency into a companylike operation wouldn’t solve its financial problems.
“We need to look at if we need 38,000 post offices,” said UPS spokesman David Bolger. “Universal service is extremely important in this country, but what is it defined as? UPS favors a financially viable postal service so they can continue their core functions.”
