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The Postal Service Reform Act of 2016

USPS Mail BoxesTwo weeks ago the House Committee on Oversight and Government Reform released a draft of “The Postal Service Reform Act of 2016.”  A summary of the bill is here; the full text is here.

Considering that Congress has been trying unsuccessfully to do postal reform for several years now, it’s difficult to be optimistic about this latest effort.  But the sponsors of the bill — Reps. Jason Chaffetz, R-Utah, and Elijah Cummings, D-Md., the respective chairman and ranking member of the House Oversight and Government Reform Committee — have expressed confidence that they may finally be able to get a postal reform bill passed.

As Cummings told GovExec.com, “We are probably closer than we’ve ever been” to passing a bill. “We may not resolve every postal issue, but certainly, I’m of the belief that we will address those things that we can agree on and be able to come up with something that makes sense.”

One reason for the optimism is that the House bill is very close to its counterpart in the Senate,  S.2051 — Improving Postal Operations, Service, and Transparency Act of 2015 (iPOST).  In drafting the House bill, Chaffetz says he worked closely with Senators Tom Carper, D-Del., who authored the Senate bill, and Ron Johnson, R-Wis., who chairs the Senate’s Homeland Security and Governmental Affairs Committee.  The two bills are similar in several respects.  

Both bills address the problems caused by the prefunding mandate for retiree health care by integrating postal workers with Medicare, though they do so in different ways (as discussed here), and they both change the payment schedule to avoid the $5 billion annual payments that have contributed significantly to the USPS deficits.  The Senate bill also reduces the pre-funding requirement to 80% of the projected liability, while the House bill continues the status quo and requires the Postal Service to cover 100% of the liability.

Both bills would use postal-specific assumptions about the demographics of the USPS workforce to calculate the pension liabilities, in order to prevent overpayment to the funds.

Both have provisions about pushing the Postal Service to convert millions of addresses from door and curb delivery to cluster boxes.  The House bill, however, is aggressive and would require conversions in an area if 40 percent of the residents approved, while the Senate bill sticks with the status quo and makes conversions voluntary for all existing addresses.

Both bills do not address the issue of reducing delivery to five days a week.

Both bills would grant the Postal Service a rate increase for market-dominant products.  The House bill allows a 2.15 percent increase while the Senate bill calls for a 4.3 percent increase (the full amount of the exigent surcharge, which expired earlier this year).

Both bills call for the creation of a Chief Innovation Officer who would lead the development and implementation of innovative postal products and services and nonpostal services.

Both bills have provisions giving customers the opportunity to express their views about alternatives if their post office is being considered for closure.  The provisions look a lot like POStPlan, which surveyed patrons about their preferences, e.g., accept reduced hours, use another post office, replace the post office with a Village Post Office, etc.  (The options weren’t really options, and no community ever chose anything but reduced hours.)

Aside from sort of differences just noted, there are also sections in each bill that do not appear in the other.  For example, the Senate bill puts a five-year moratorium on closing post offices or reducing their hours and a two-year moratorium on closing other postal facilities.  The House bill has no such provisions.

The House bill reduces the size of the Board of Governors from nine members to five, and it makes the Postmaster General and Deputy PMG presidential appointees (they’re currently chosen by the BOG).   The Senate bill does not include these changes.

The House bill directs the Postal Service to raise rates on loss-making monopoly products — apparently an effort to address concerns that market-dominant products are cr0ss-subsidizing competitive produces (i.e., most packages) and thereby causing unfair competition with UPS and FedEx (a charge raised repeatedly by UPS in PRC proceedings).  The Senate bill does not contain such a provision.

(For more about the two bills, there’s a good article on Government Executive.)