Business mailers throw monkey wrench in postal reform bill

Opposition from business mailers to a plan to allow the U.S. Postal Service to raise postage rates in the long term threw a monkey wrench Wednesday in a Senate committee’s efforts to pass legislation to rescue the financially ailing agency.

Leaders of the Senate Homeland Security and Governmental Affairs Committee were scheduled to approve a wide-ranging postal reform bill. But an amendment from Sen. Tammy Baldwin (D-Wis.), backed by the powerful mailing industry, to strike a plan allowing higher postal rates appeared to be gaining support.

The committee tabled its deliberations at midday. Aides said the Baldwin amendment, along with another proposal from Sen. Rand Paul (R-Ky.) to remove a federal ban on guns in post offices, would require more study.

The delay underscores the challenges lawmakers continue to face as they try to satisfy businesses, labor unions, rural and urban constituents and postal officials seeking a legislative fix to help stanch multibillion-dollar losses.

One of the biggest impediments to new postal revenue is a 2006 law that caps rate increases to the rate of inflation.

The Postal Service recently won a surcharge on that rate from regulators, who allowed a 3-cent jump in the price of first-class letters and other mail that took effect Monday. The surcharge would last two years, raising $2.8 billion to help the Postal Service recoup revenue it lost during the recession.

But the committee’s chairman, Thomas R. Carper (D-Del.), and its ranking Republican member, Tom Coburn (Okla.), agreed to language that would allow that increase to be permanent and raise the annual price cap from inflation to inflation plus 1 percent. The Postal Service’s governing board also would have some authority to override rulings by regulators on rate increases.

Commercial mailers and their suppliers are fighting back, calling the proposed increase a threat to their business and to mail volume.

Baldwin said the plan would give the Postal Service too much power.

“No public or quasi-public entity, especially one with monopoly power, should have near-absolute control in setting its own prices,’’ she said. “It’s wrong.”

But Coburn said her plan would effectively kill the bill by leaving the mail agency in the red.

“We will not have solved the problem,” he said, and asked her to suggest other ways to cut costs or increase revenue. ‘We don’t do the mailers a favor by not passing a bill.”

Along with a permanent rate increase, the bill would help the Postal Service reduce its losses by restructuring an annual payment to finance health benefits for future retirees. It would create a postal-only health plan within the broader Federal Employees Health Benefits Program. Postal officials have sought such a change for years. Medicare-eligible retirees would be required to enroll in the plan.

The bill would allow the Postal Service to drop Saturday mail delivery, but only after mail volume drops below 140 billion pieces of mail annually. The agency would be able to ship alcohol and enter other lines of business that are currently prohibited.

The slow move to five-day delivery is at odds with the Postal Service’s desires and with a postal reform bill that passed a House committee last year.

Paul said his gun rights amendment would allow licensed gun owners to carry weapons inside post offices, rather than having to unholster them and keep them in the car. Guns are banned in federal buildings, including post offices.

Lisa Rein covers the federal workforce and issues that concern the management of government.
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