A Large Load to Sort in USPS Overhaul

By Stephen Barr
Wednesday, April 18, 2007

Snail mail still draws a lively crowd.

At yesterday's House hearing on the future of the U.S. Postal Service, the witnesses jousted before the microphones at the front of the room while the crowd jostled to find seats in the back. Some had to stand, including Thurgood Marshall Jr., the well-connected Washington lawyer and a member of the postal Board of Governors, who peered from the back doorway.

The hearing, held by Danny K. Davis (D-Ill.), chairman of the federal workforce subcommittee, was the first called since President Bush signed a law that overhauls postal operations for the first time in 37 years.

The new law is reordering postal priorities and sparking some tension.

Postmaster General John E. Potter warned the subcommittee that "success under the new law will not be easy," in part because the Postal Service will be forced to hold some rate increases to inflation and become more rigorous about controlling costs.

As part of the overhaul, the law creates a regulator to write rules on how to establish mail rates and to hear complaints about mail service. Dan G. Blair, chairman of the Postal Regulatory Commission, suggested it might be best if he and Potter moved quickly to embrace the new rules, which must be in place by June 2008.

The law permits the Postal Service to raise rates one more time, by December, under the old law, but Blair said "there is no question that this final rate case would divert Postal Service and commission resources that, in my view, would be better devoted to developing the new system of regulatory oversight."

Rep. John M. McHugh (R-N.Y.), who played a key role in crafting the law, asked Potter whether he would be filing for a stamp increase under the old rules. Potter said he did not know but said he was "operating in the blind" and needed to keep his options open.

James C. Miller III, chairman of the Postal Service Board of Governors, told McHugh that the board has not decided how to handle the next case for raising stamp prices but said that it was unlikely a rate case would call for a price rise above inflation.

Miller said the new law means the Postal Service will need to focus more on market competition and friendliness toward its customers. He suggested that the postal service has a mixed record on customer service, noting that a postmaster had thanked him for a recent, large purchase of stamps while a letter carrier had complained about picking up a cardboard box with several hundred letters being mailed by his wife at their Washington apartment building.

On the issue of service, Davis, whose district is based in Chicago, won a personal commitment from Potter to fix the postal system in the Windy City, where mail is delivered late and at rates worse than the national average. Potter said he plans to increase staffing, upgrade equipment and reconfigure the delivery network.

Congress approved an overhaul of postal operations partly in response to the explosive growth of the Internet and e-mail, which are eroding the volume of first-class mail. Going forward, Potter said, it will be especially important for postal managers and unions to work even more closely to increase productivity and cut costs.

That means the post office will use contractors if it makes good business sense, Potter and Miller said. Long-standing provisions in collectivebargaining agreements permit the Postal Service to use contract workers, Miller noted.

But unions, led by the National Association of Letter Carriers, have complained to Congress in recent weeks that the Postal Service has shifted its policy on contractors.

Instead of using them primarily for long-haul and rural delivery of mail, the Postal Service has decided to use them to deliver mail in urban and suburban settings, William H. Young, the NALC president, testified.

Contractors may save money for the Postal Service, but their use could lower public trust in the mail and harms employee morale, Young, Donnie Pitts, president of the National Rural Letter Carriers' Association, and John F. Hegarty, president of the National Postal Mail Handlers Union, told the subcommittee.

Young portrayed the outsourcing as a public policy issue, but William Burrus, president of the American Postal Workers Union, cautioned against unions seeking congressional intervention in matters that should be left to collective bargaining. That could set a worrisome precedent, opening up provisions in union contracts that provide benefits to postal employees, he said.


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