Lawmakers Unexpectedly Take Up Postal Service Overhaul

By Stephen Barr
Friday, December 8, 2006

In a round of unexpected dealmaking, the House and Senate began moving yesterday toward passage of legislation that would overhaul the business operations of the U.S. Postal Service for the first time since 1970.

The measure stalled in September over objections lodged by a union, and one of the chief sponsors, Sen. Susan Collins (R-Maine), held out little hope that a compromise could be reached before the lame-duck session ended.

But key Senate and House leaders, including Rep. Henry A. Waxman (D-Calif.), came up with an agreement, and congressional aides said the measure could be approved no later than today under expedited procedures. Some aides, however, said they were worried that last-minute snags could develop that might sink the bill.

The measure would replace the lengthy and litigious process used to raise the price of stamps for first-class mail and to set rates for magazines and other products, and would free up billions of dollars to finance the health-care costs of postal retirees.

"This legislation will help us avoid disastrous future postal rate hikes and put the Postal Service on firm financial footing for the 21st century," Sen. Thomas R. Carper (D-Del.) said last night.

He predicted the bill would help the post office "survive at a time when more and more people communicate and do business through faxes, e-mail and electronic bill-pay rather than hard-copy mail."

The compromise, congressional aides said, would:

· Create a cap for raising postal rates by linking adjustments to increases in the consumer price index, giving mailers some predictability about postage increases. The price cap would be reviewed after 10 years by a newly created Postal Regulatory Commission, which could modify the cap or adopt an alternative rate system if necessary.

· Repeal a law that requires the Postal Service to make payments, originally intended for postal pensions but no longer needed, into an escrow fund. That essentially would release $78 billion over 60 years, money that would be used to cover retiree health-care liabilities, pay off postal debts to the Treasury and perhaps lower rate increases.

CONTINUED     1        >

© 2006 The Washington Post Company