House Committee passes postal reform measure

House Committee passes postal reform measure    The U.S. House Government Reform Committee last week unanimously approved a major piece of legislation to reform the U.S. Postal Service and give it the flexibility to operate like a modern business rather than a heavily regulated bureaucracy that is slow to react to market forces.
   H.R. 4341, the Postal Accountability and Enhancement Act of 2004, is the first significant piece of legislation in 30 years to address how the USPS is organized. The USPS is nearing a crisis by some accounts as its delivery network expands along with population growth and sprawl, while volumes for First Class mail continue to trend downward.
   The Postal Service and many large commercial customers argue the agency needs the flexibility to make quick operational changes and set rates within reasonable limits rather than having to regularly seek permission from the Postal Rate Commission.
   The bill would overhaul the rate-setting process to give the USPS authority to set rates as long as they don’t exceed the rate of inflation. It would also offer more rate flexibility for express and second-day mail offerings, areas in which the USPS competes with the likes of FedEx and UPS, but would eliminate preferential treatment the agency receives in the form of tax breaks, special loan rates, and exemptions from many types of regulations with which private companies must comply.
   The bill also attempts to reduce the ability of the agency to regulate its competitors and issue regulations that give it an advantage. Another reform item involves international mail, which would make it subject to Customs laws for the first time, and give the USPS the authority to contract with airlines for the transport of international mail as it currently does for domestic mail shipments.
   UPS, which is a competitor as well as a large consumer of postal service, issued a statement supporting the bill. Chairman Michael Eskew testified before a special postal reform panel earlier this year.
   “The last time the USPS was reformed, the cicadas were invading D.C. Two cicada life cycles and 34 years later, we are once again bracing for the cicada invasion, and it is once again high time to rewrite the out-of-date laws that govern the U.S. Postal Service, Committee Chairman Tom Davis, R-Va., said in a statement.