Congress tries again: The Postal Service Reform Act of 2016

SteveStory


The House is looking at another postal reform bill, but does it have a chance of becoming law?  A lot of money has been spent lobbying Congress for legislation to fix the USPS, with not much to show for it.
Two 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.”

 

The House and Senate bills compared

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.)

 

Responses to the bill

While there may be reason to hope that postal reform is finally on the horizon, it’s hard not to be skeptical.  Congress has been trying for at least five years now to pass a sequel to the Postal Accountability and Enhancement Act (2006).  The Senate hasn’t even been able to approve any of the President’s nominations to the Board of Governors, so it currently has only one member, and the PRC is short one member as well.

One might expect to get some indication of the fate of the bill by looking at how the stakeholders are responding, but they haven’t had much to say.  It’s been two weeks since a draft of the House bill was released, and public comments are few and far between.

The National Association of Letter Carriers said right away that it needed time to review the bill but in the meantime there was one provision it clearly could not support — converting an undefined number of business and residential delivery points that now receive door delivery service to curb-line or centralized delivery service over the next five years. “This cut in service,” says NALC, “is neither sensible nor necessary.”  The conversions would eventually mean the loss of thousands of letter carrier jobs.

The National Active and Retired Federal Employees Association Legislative has also weighed in.  NARFE Director Jessica Klement said that requiring postal retirees to enroll in Medicare to maintain their eligibility in the Federal Employees Health Benefits Program would be “unacceptable”  to NARFE.

Many of the big mailers probably object to the rate increase in the House bill, but maybe not as vigorously as one might expect.  Paul Miller, Vice President & Deputy Director of the American Catalog Mailers Association, seemed willing to accept the increase.

“Although there are very few legislative days remaining in this Congress, we feel this is a workable bill, given the wide variety of interests each pulling for their vision of an ideal Postal Service,” said Miller. “The cost improvements will offset the two percent rate hike and in our view if that is the price of getting it done, it is worth the support.”

Not everyone seems as content with the bill as Miller, though.  Just yesterday, David Williams, president of the Taxpayers Protection Alliance told InsideSources the reforms amount to “window dressing” when the agency is in need of a greater overhaul.  Williams also criticized the bill for allowing the Postal Service to get involved with nonpostal products and for failing to address five-day delivery.

Along the same lines, Steve Pociask of the American Consumer Institute criticized the bill for “inexplicably raising rates on consumers” and for encouraging “ill-advised” innovation in nonpostal areas.  “Overall,” Pociask told InsideSources, “this is just a bad bill and the Oversight Committee needs to rethink it entirely.”

Aside from these responses, the media have reported almost nothing else from other stakeholders in the mailing industry.  Thus far, the Postmaster General, the APWU and other unions, the big mailers and their associations, and most of the other players have had very little to say about the bill, at least in public.

Perhaps there’s a lot of quiet lobbying going on behind the scenes, or maybe it’s on hold for a while.  The House is on recess from June 25 to July 4, and there aren’t many days left in this legislative session.  Or maybe the stakeholders just aren’t getting too worked up about another postal reform bill.  So many previous bills have gone nowhere.

 

Previous postal bills

A search of Congress.gov indicates that since 2011, something like fifty bills have been put forward in the House and Senate to address postal issues.  (Several are duplicates of bills introduced in previous sessions.)  None of these fifty bills has made it to the President’s desk.

(A compendium of the proposed bills, along with summaries, sponsors, etc., appears at the end of this post.)

Since 2011, over thirty bills have been introduced in the House to address postal issues. A few have taken a comprehensive approach and addressed numerous issues, while other have focused on specific topics. For example:

H.R.4656 – Stop Postal Closures Act of 2016 would have prohibited the Postal Service from closing post offices and other postal facilities without the approval of the Postal Regulatory Commission, and it would have returned the Postal Service to the service standards in effect before the changes that took place in January 2015.

H.R.5377 — Postal Facilities Preservation and Sales Reform Act puts limits on the sale of historic postal properties, an issue that has concerned historic preservations (and Save the Post Office).

H.R.4422 — POSTAL Act of 2015 (Providing Opportunities for Savings, Transactions, and Lending Act of 2014) expands the specific powers of the Postal Service to include the provision of basic financial services (as advocated by Sen. Elizabeth Warren and others).

H.R.3319 – Postal Innovation Act directs the Postal Service to establish a pilot program to create public-private partnerships to test nonpostal services like community support services, Internet voting, and Internet service.

Aside from the new House bill and Carper’s iPOST bill, the big bills that have taken a more comprehensive approach include S.1789 – 21st Century Postal Service Act of 2012, introduced by Sen. Joe Lieberman; S.1625 – Postal Reform Act of 2011, introduced by Sen. John McCain; and H.R.2309 — Postal Reform Act of 2012, introduced by Rep. Darrell Issa.

Issa’s bill would have ended Saturday delivery, required millions of conversions to cluster boxes, and created a Commission on Postal Reorganization to close a significant number of postal facilities.  The bill showed that sometimes no new legislation is better than bad legislation.

 

Naming post offices

The fact that Congress has been unable to pass any serious reform legislation does not mean that there’s been no new postal legislation at all.  Over the past five years, Congress has actually passed many bills concerning the Postal Service.

A search of Congress.gov reveals, for example, that during the 112th, 113th, and 114th Congress (2011-2016), about 150 bills mentioning the Postal Service have become law.

About 115 of these bills involved renaming a postal facility in honor of someone, like a solider who died in combat, an elected official, or a civic leader.  This is apparently one area where bipartisan agreement can be found.  In fact, according to a 2013 report by the Congressional Research Service, about 20 percent of laws passed in recent years were for renaming post offices.

Just last week the House approved three more bills renaming post offices  — one after the founders of PFLAG (Parents, Families and Friends of Lesbians and Gays), another after U.S. Rep. Mike Oxley, who died this year, and still another after voting rights activist Amelia Boynton Robinson.

The other 35 postal-related bills that have been passed since 2011 were not about the Postal Service per se, but they mentioned the Postal Service, often just in passing, as with the National Defense Authorization Acts.

Several of these other bills were general appropriations acts, which include a passage that compensates the Postal Service for revenue it forgoes in providing free mailing privileges to the blind and overseas voters, as required by the 1993 Revenue Forgone Reform Act.  The 2012 appropriations bill also included a passage requiring the Postal Service to continue regular mail delivery on Saturdays.

 

The high cost of legislation

Congress’s failure to produce any new legislation has been frustrating for all concerned.  The businesses and organizations in the mailing industry must be particularly frustrated, given that many of them have spent a lot of time, energy, and money on trying to get something passed.

According to OpenSecrets.org, in 2015 there were 85 companies and organizations that lobbied on postal issues.  The list includes UPS, FedEx, Pitney Bowes, the Newspaper Association of America, the American Postal Workers Union, Hallmark Cards, and so on.  Open Secrets also lists 215 lobbyists and lobbying firms who work on postal issues.

Many of the lobbying entities are big mailers and their associations. Others are among the Postal Service biggest contractors, like Accenture and FedEx.

A deeper study of Open Secrets might begin to reveal how much money has been spent on postal issues since PAEA. It must be a huge amount.

In 2015 alone, FedEx spent $12.4 million on lobbying; UPS spent $8.16 million; Pitney Bowes spent $1.25 million; Amazon spent $9.4 million; Accenture spent $3.36 million; American Forest & Paper Association spent $2.46 million; and the APWU spent $716,000.

Extrapolate numbers like this for the five-year period since 2011, and we’re probably talking about something on the order of $250 million, maybe much more.

Obviously, not all of this money was directed specifically at postal reform legislation, but a good deal of it was.  However many million have been spent, at this point there’s nothing much to show for it.

Perhaps in the months remaining before the current session of Congress ends (on January 3, 2017),  something will finally happen.  Or maybe not.


Most of the articles on Save the Post Office about previous legislation, which appear in the slideshow at the top, are archived here.   Below is a  list of the proposed postal bills since 2011, along with summaries, sponsors, etc.  (View on separate page here.)

Proposed Postal Legislation: 2011-2016

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