February 15, 2006

Unless you are brand new to the commercial mailing industry, you have likely been following what is the most significant moment in commercial mail since the United States Postal Service^® came into existence on July 1, 1971. On February 9, 2006, the United States Senate unanimously passed their version of postal reform. This, along with the House passing HR22 last July, are significant milestones and represent the first major reform to the USPS in over 30 years.

Postal reform legislation has many aspects. However, there are several key areas that I believe would provide significant benefits to the USPS^® and the mailing industry as a whole.

• Repeal of the P.L. 108-18 escrow payment requirement. The rate increase of 5.4 percent on January 8 was entirely due to this and hopefully removing this, we can end the “stamp tax” burden on the mailing industry.
• Return the military pension responsibility back to the Treasury where it belongs. No other government entity has to pickup their military employees’ pensions in this manner.
• Provide greater price flexibility for the USPS, while at the same time capping the rate increases by limiting them to the Consumer Price Index (CPI).

There are also many other proposed changes, such as transforming the Postal Rate Commission into a regulatory commission that could have significant impact on the USPS and the mailing industry. Of course, like any piece of legislation, not everyone is happy with the proposed changes. In fact, the USPS Board of Governors (BOG) sent a letter a few weeks ago to Senator Susan Collins (R-ME) urging that the Senate not move forward with it.

I am in favor of the postal reform legislation and support it moving forward. With so much going on in Congress right now and after waiting for so many years, I just don’t see when we’ll get another shot at correcting some things that are clearly wrong and outdated. Sure, there are some aspects that may not be perfect, but I believe those can be dealt with in other ways later. Stopping this escrow payment business and moving the military pension payments where they belong are just too important to keep the mailing industry growing.

So now we stand in the final moments when the House and the Senate try to rationalize both forms of legislation and present a final bill to the President for signing. Some are worried that President Bush will veto the bill if it does not have a neutral impact on the Treasury, and in fact, that is one of the concerns expressed by the BOG in their letter. The President has not vetoed a bill yet (http://clerk.house.gov/histHigh/Congressional_History/vetoes.html) and I find it hard to believe that he will with this one, particularly with such an overwhelming number of supporters.