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Postal Reform: Everyone Stands in the Way
By Sam Ryan, 10/18/2006

For months now, long overdue reform of the U.S. Postal Service has languished after different versions were passed by the Senate and House of Representatives. Many observers had hoped that the two chambers of Congress and the Bush Administration would work out their differences before lawmakers returned home for elections.

But while they came very close earlier this month, the system has failed to produce what would have been the first significant update to the laws governing the Service in 30 years.

When Congress returns for a few brief weeks starting Nov. 13, it's still possible lawmakers will salvage some of these reforms. But it seems rather unlikely that a strong reform package will be passed during this "lame duck" session.

At points earlier in the process, many observers and interested parties were enthusiastic about the prospects for reform. And while the latest versions are far from perfect, they still contain a number of critical improvements.

Both the House and Senate plans address many of the problems hindering USPS operations. Both limit the Postal Service to offering products and services that are intimately related to its principal mission -- delivering mail. They would require USPS to provide increased financial transparency. And they would create a new "Postal Regulatory Commission" (PRC), with strong oversight authority over the agency.

Further, both plans share similar provisions that would give USPS more flexibility to enter into agreements (like worksharing) with the private sector, while taking steps to ensure that individual consumers will not have to shoulder the costs of excessive discounts to business mailers.

Perhaps most important, both versions would attempt to prevent USPS from abusing its government monopoly.

If both versions share so many positive aspects, and both represent the first major postal-reform bill in decades, why have they been stalled for so long?

The answer is simple: At every twist and turn, labor unions and special-interest groups have either stood in the way or withheld their support for consumer-friendly changes.

The postal labor unions have voiced the loudest opposition to the bill. They've tried to block a range of reforms -- including increased worksharing; the PRC's greater regulatory oversight; limitations on workers' compensation claims; and an inflationary cap on rate hikes.

Indeed, William Burrus, the President of the American Postal Workers Union, has claimed that "only through the combined efforts of the postal craft unions (APWU, National Association of Letter Carriers, National Postal Mail Handlers Union, and National Rural Letters Carriers Association) were we able to delay final action on this bill."

Postal Service management itself has also lobbied against the reforms. Last year, the Postal Board of Governors sent the House Government Reform Committee a letter outlining several concerns with both the House and Senate versions of the bill, refusing to endorse either version until their concerns were addressed.

Most notable was the fact that the Postal Service would rather abandon reform altogether than live with provisions that would give strong independent oversight of its business and pricing decisions.

Also at odds over specific reforms were the bulk mailer consortiums (led by the Direct Marketing Association, the Magazine Publishers of America, and American Business Media), the Newspaper Association of America and the private-sector parcel delivery industry.

Ultimately, though, political officials have been responsible for the lack of movement of these reforms. Unwilling or unable to push on when the enthusiasm of the entrenched postal interests waned, decision-makers may now have missed an opportunity to help the consumers who are the American public.

With no clear path to the finish line now, it looks as if we are destined to continue to pay for, and be served by, a Postal Service operating under a business model devised more than three decades ago - and one that that meets the needs of its labor unions and special interests better than those of its consumers.

Sam Ryan is a senior fellow at the Lexington Institute, a think tank based in Arlington, Virginia. He can be reached at ryan@lexingtoninstitute.org.


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