Postal reform legislation, passed by the House of Representatives last year and by the Senate in February, should have been in conference and awaiting approval from the president.
Instead, it lost steam over the summer for a variety of reasons, and now, with the Congressional session about to adjourn so legislators can go home to campaign, it is verging on oblivion.
But in the last few days, the leading Congressional advocates have been pushing to make something happen, and a source deeply familiar with the political and bureaucratic process says it has close to;but less than;a 50-50 chance. “Things are moving significantly this week,” the source said. “The White House met with the key people;Tom Davis (a Virginia congressman) and Susan Collins (a Maine senator);yesterday. There is some reason for cautious optimism. There is a view in the administration that politically, it would be nice to have something.”
Postal reform addresses a variety of issues, including the need to maintain an escrow fund to cover unfunded retirement benefits. It is most immediately relevant to magazine mailers in terms of the rate-setting process. Under the reform bill that passed Congress, future rate increases are tied the Consumer Price Index. One of the points of contention in postal reform has been over this formula, and under what circumstances the United States Postal Service can go beyond the CPI. It is this so-called “exigency clause” as well as negotiated service agreements (NSA);where the USPS can go off its ratecard and cut deals with large-volume mailers;that has Congressional negotiators stuck.
“If there is an agreement, it will recognize the right of the postal service to have NSAs without specifying them,” the postal source said.
In the end, the current rate case;which proposes a 11.4 percent increase, on average, for periodicals mail;is not likely to be affected by the fate of postal reform, except that if reform passes, the rate hike may be delayed. “If they get some financial relief in reform, it wouldn’t change the rate increase,” the postal source said. “But it may delay its implementation beyond May 2007. Maybe by a few months.”