Postal Reform Bill Has Slim Chance of Senate Passage

As the current Congress prepares to adjourn for the year, some mailing industry groups were holding out hope of a last-minute passage of a postal reform bill.

But many said the legislation that would have reformed the USPS effectively died late Thursday night, when lawmakers failed to reach agreement on what the USPS would charge for single piece small parcels and whether those rates would be competitive with those charged by private carriers like United Parcel Service.

UPS favors language in a House measure that could increase Parcel Post rates by as much as 40% and not put a cap on rate increases.

Late Friday, the Senate was still negotiating on language for Senate bill S.662 and considering staying in session into the weekend to hammer out a deal, said Anthony Conway, executive director of the Alliance of Nonprofit Mailers.

But even if the Senate were to agree on language, the body would have draft a brand new one --largely similar to the current one under consideration --and the House would have to do likewise, said Conway.

And if the Senate did not reach agreement over the weekend, it might mean Congress would have to come back for a lame duck session in mid-November, after the election, said Conway.

For his part, UPS spokesman David Bolger said his company had worked with the bill's sponsor, Senator Susan Collins (R-ME), and representatives of the White House, the Office of Management and Budget and others to reach a compromise.

"We've been negotiating in good faith for three years, but we find language in Senate bill unacceptable," he said. "We like language in the House bill [H.R. 22]."

According to the Direct Marketing Association, language in the House bill could possibly raise Parcel Post rates by as much as 40%.

Bolger sidestepped questions late Friday about whether UPS was still negotiating on the postal bill.

In addition to the single piece small parcel rates, other issues that needed resolution in the bills included setting a cap on rate increases and reworking some terms of negotiated service and worksharing agreements.

"The White House said this was a top legislative priority for them," said Conway.

Meanwhile, the DMA was engaged Friday in what appeared to be a feverish battle to get its members to e-mail high-level UPS executives to end what it termed a "stalemate" over postal reform legislation.

Specifically, the DMA asked its members to fax letters to UPS chairman/CEO Michael Eskew, saying in part:

"Not only could higher shipping rates turn consumers away from shopping by mail, but failure to pass postal reform means that all mailers will face significantly higher costs that could ultimately result in drastic reductions in mail volume, and further revenue losses for private parcel shippers, the Postal Service, and the many businesses that rely on both."

This language dispute with UPS arose after long negotiations with the White House, which got behind the bill that partly relieved the USPS of huge financial obligations relating to payment of retiree health benefits, according to Conway.

This is not the first time UPS has objected to postal reform bills.
In June 2002, the House Government Affairs Committee defeated the postal accountability and enhancement act, effectively scuttling the prospect of postal legislative reform for at least the following two years (Direct Newsline, June 25, 2002).

That bill similarly sought to give the USPS some pricing flexibility, and the ability to establish rates for products and services that compete with private business and to set its own rates in some cases.

"I really don't believe United Parcel Service wants us to solve this problem," Dan Burton (R-IN), then the House Government Reform Committee's Chairman, said after the committee defeated the motion.

What happens now?

"Beats he living daylights out of me," said Gene Del Polito, president of the Association for Postal Commerce who was skeptical a lame-duck session of Congress would take up the bill.

"If it didn't happen [Thursday] night, it's probably not going to happen," he said.

He warned that lawmakers such as Collins who have worked steadily on postal reform for years weren't too likely to take up the cause again.

"After all, she's chair of the Committee that oversees homeland security," said Del Polito