US Post Office management opposes Reform Bill
After more than a year of seeking legislation to update how the post office is run, postal management said Wednesday both the House and Senate bills should be scrapped and the whole process started over.
Failure to win approval of provisions opposed by the Bush administration could lead to as mush as a 20 percent increase in postage rates, postal officials said.
"We believe there are critical elements missing from this bill, as well as numerous burdensome provisions that would make it extremely difficult for the Postal Service to function in a modern, competitive environment," the governing board of the Postal Service said in a letter to Sen. Susan M. Collins, R-Maine, who chairs the committee on government affairs.
The House reform bill approved last year contains similar provisions.
"We've worked long and hard with House and Senate staff … to try to get corrections to the legislation and we just have literally reached the end of that rope," postal senior vice president Tom Day said in a telephone interview.
The problem centers on provisions for an escrow account and retirement benefits.
Legislation in 2003 required the post office to assume responsibility for retirement benefits earned by its employees during military service before going to work for the post office. That shifted an eventual responsibility of some $27 billion from the Treasury to the post office, and is not required of other government agencies.
Another past measure requires the post office to place $3.1 billion this year in an escrow account. That requirement was the only reason for the 2-cent increase in postage that took place earlier this month, agency officials said, and the escrow requirement increases in coming years.
While bills to modernize the postal operations would have eliminated those requirements, that would have made the federal deficit appear larger, drawing the veto threat from the administration.
Facing such a threat, Day said that postal management is concerned that the provisions would simply be dropped during House-Senate conference negotiations, and there is nothing else in the bills that would help the agency cut costs.
Other problems cited by postal officials in the bills are:
_ A requirement that the Postal Service pre-fund retiree health benefits over the next 40 years. This would require an 8.9 percent postal rate increase in addition to any increase needed to meet operational costs.
_ Granting the Postal Regulatory Commission new authority to hear complaints about every facet of Postal Service operations and order the Postal Service to take corrective action.
Postal Reform Legislation Could Dramatically Boost Stamp Prices
PR Newswire Europe (inc. UK Disclose) 01-25-2006
WASHINGTON Jan. 25
WASHINGTON, Jan. 25 /PRNewswire/ — A senior U.S. Postal Service official warned today that passage of pending postal reform legislation, when coupled with the Bush Administration demands on military retirement costs, could increase stamp prices by as much as 20 percent in the near future.
The bill scheduled for Senate action would require the Postal Service to become the first federal agency to pre-fund its retirees' health benefits while the Bush Administration is insisting that the agency absorb the military retirement obligations of its employees, also a first for the federal government.
U.S. Postal Service
"Under current law, the Postal Service has managed to keep the cost of postage below the rate of inflation," said Tom Day, Senior Vice President for Government Relations. "But this bill not only strips the Postal Service of much of its management authority but almost guarantees a hefty rate increase."
Day said that should final legislation require the Postal Service to pre- fund retiree health benefits and retain a $27 billion obligation to fund military retirement benefits for its employees, postage rates could increase by up to 20 percent. That would be in addition to any rate increase necessary to fund postal operating costs. The postage rate increase that was effective on Jan. 8 was implemented solely to generate the $3.1 billion necessary to fund an escrow account resulting from 2003 legislation.
Postal operations are funded entirely by the sale of postal products and services, not through tax revenue.
Commenting on the Senate version of a postal reform bill, S. 662, Day said that it does not provide the Postal Service with necessary rate flexibility.
"The bill will keep the Postal Service tied to the current rate-making method, which is layered with a Consumer Price Index rate cap. We would have no new ways to grow revenue and mail volume to continue to support universal service," he said.
The bill also grants a new Postal Regulatory Commission broad new authority to override practically any operational decisions the Postal Service makes, from the deployment of processing equipment to the award of a contract.
"In this divided system, there will not be an entity to hold accountable for the performance of the Postal Service," Day said.
The Postal Service's Board of Governors wrote the full Senate yesterday, expressing its opposition to the Senate bill.
"We believe there are critical elements missing from this bill, as well as numerous burdensome provisions that would make it extremely difficult for the Postal Service to function in a modern, competitive environment," the Governors wrote. "It is with regret that, in carrying out our fiduciary responsibilities and in keeping with our concerns that the Postal Service be able to provide the quality of service and reasonable rates to which the American people have become accustomed, we must oppose passage of this bill."
Day said that the Postal Service has worked hard over the years with all concerned parties involved with this attempt to modernize postal legislation.
"Unfortunately, we could not convince congressional leaders to consider our serious concerns with parts of the legislation," he explained.
The Postal Service expressed similar concerns regarding the House of Representatives version of postal reform legislation, H.R. 22, passed in 2005.
Since 1775, the Postal Service and its predecessor, the Post Office Department, has connected friends, families, neighbors and businesses by mail. It is an independent federal agency that visits more than 144 million homes and businesses every day and is the only service provider delivering to every address in the nation. The Postal Service receives no taxpayer dollars for routine operations, but derives its operating revenues solely from the sale of postage, products and services. With annual revenues of $70 billion, it is the world's leading provider of mailing and delivery services, offering some of the most affordable postage rates in the world. The U.S. Postal Service delivers more than 46 percent of the world's mail volume — some 212 billion letters, advertisements, periodicals and packages a year — and serves seven million customers each day at its 37,000 retail locations nationwide.
Please note: An Audio News Release and MP3 file on this press release can be found at usps.com/communications/news/press
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