USPS opposes reform bill

A senior U.S. Postal Service official warned today that pending postal reform legislation coupled with the Bush administration’s deficit reduction policy could force USPS to raise stamp prices as much as 20 percent almost immediately.

Despite an eleventh-hour amendment, the pending legislation fails to give USPS the pricing flexibility it needs to meet the growing demands for universal mail service and still break even financially, said Tom Day, senior vice president of government relations at USPS.

The U.S. Postal Service Board of Governors joined USPS officials in their opposition to the pending legislation. In a Jan. 24 letter sent to every U.S. senator, the board declared its opposition just as the bill was about to move forward in the Senate, where it has been on hold for months.

The House passed a similar version of postal reform legislation in 2005.

The board’s letter, addressed to Sen. Susan Collins (R-Maine), states that the present bill contains burdensome provisions and missing elements that “would make it extremely difficult for the Postal Service to function in a modern, competitive environment.”

The bill also grants a new Postal Regulatory Commission authority to override almost any operational decision that USPS makes about deploying automated processing equipment or awarding contracts, Day said.

The biggest sticking points, however, are the bill’s provision that USPS prepay its retirees’ health benefits and the Bush administration’s policy requiring the service to absorb $27 billion in military retirement benefits for its employees.

At a media briefing today, Day said USPS was disappointed and hoped that Congress could someday fashion a bill that would give agency managers the authority and controls they need to control costs and increase revenues. “It is with regret that we cannot support the current legislation that is pending,” he said.

Collins and Sen. Thomas Carper (D-Del.), co-authors of the Senate postal reform legislation, released a statement condemning last-minute opposition to the bill.

“Nothing in the bill would lead to rate increases,” according to the statement, which adds that the bill includes a strong rate cap that would prevent USPS from raising rates each year by more than the Consumer Price Index.