The House Government Reform Committee has passed HR-22,
the Postal Accountability and Enhancement Act, introduced
in January by John M. McHugh, R-N.Y., and Committee
Chairman Tom Davis, R-Va., and recently modified to
reflect concerns raised by the Bush Administration and
others.
The postal service’s business model relies on mail volume
growth to cover growing costs and on April 8 it announced
plans for an across-the-board rate increase 2 cents for a
first class stamp, or about a 5.4 percent increase —
which it said is necessary to meet an escrow requirement
of public law 108-18, the Postal Civil Service Retirement
System Funding Reform Act of 2003.
The bill eliminates the escrow requirement, which will
release funds and limit the need for a rate increase.
The legislation provides incentives for postal management
and the service as an institution, as part of a way to
modernize business operations and move away from a
“break-even mandate,” and allows the postal service to
generate and distribute earnings as bonuses to all
employees.
Without regulatory approval, the service could not raise
rates beyond certain parameters to recover losses,
according to the committee.
It said the bill would enable the service to also “price
competitive products” as long as they pay for their own
costs and do not get subsidies from first-class mail
revenues.
The bill also “mandates transparency in the service’s
finances, costs, and operations,” as well as “creates a
modern system of rate regulation, establishes fair
competition rules and a powerful new regulator, addresses
the postal service’s universal service obligation and the
scope of the mail monopoly, and institutes improvements
to the collective bargaining process,” the committee said.
It added that the bill goes against recommendations from
the President’s Commission for “unlimited and unfettered
pricing flexibility,” in favor of “controls to protect
the public interest from unfair competition.”
