Prospects good for postal reform

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With President Bush’s support, direct marketers and publishers may finally see postal reform legislation pass this year, after years of political wrangling.

Advocates say failure to bring about postal reform could result in significant rate increases, an end to so-called universal service and a taxpayer bailout.

Following a meeting in December with the President’s Commission on the U.S. Postal Service, Postmaster General John E. Potter and Treasury Secretary John Snow, the president urged Congress to move quickly to pass reform legislation this year. That reform, he said, should provide accountability, transparency, flexibility, financial solvency and adherence to best practices.

Both the House and Senate have scheduled hearings that will focus on recommendations submitted last July by the President’s Commission, a group of private-enterprise executives who spent months studying the problems plaguing the USPS.

Blueprint for legislation

Lawmakers will use those recommendations as a blueprint to draft legislation. "The legislators will have to write language to turn thoughts into a proposal," said H. Robert Wientzen, chairman-CEO at the Direct Marketing Association. Wientzen predicted a bill would emerge in September.

Another executive said it was too soon to predict when a bill would be passed. "I think it would be premature to speculate about that," said Michael J. Critelli, chairman-CEO of Pitney Bowes and chairman of the Mailing Industry CEO Council, a lobbying group.

Of 35 recommendations by the President’s Commission, 18 require action by Congress. The recommendations, which focus on treating the USPS more like a business, urge cost-cutting, modernization, and revisions to governance and regulatory procedures. They include specific courses of action, including changing the current board of governors to a corporate-style board of directors and replacing the Postal Rate Commission with a regulatory board that would have broader rate-setting flexibility.

One major obstacle may be labor. "There are a number of things in the President’s Commission report that the unions don’t support," Wientzen said. "I don’t know how that will play out."

Others agreed. "Labor issues are complex," Critelli said. "The more legislation tries to tackle, the more complex it gets." Critelli called the process a delicate balance between trying to "cover as much as you can without taking too big a chunk and drawing so many opponents."

Union sees flaws

The American Postal Workers Union, which represents 330,000 postal workers, has called the commission’s recommendations "seriously flawed."

Meanwhile, marketers have banded together to move the process along. Several trade associations—including the DMA, American Business Media, the Magazine Publishers of America, the Association of National Advertisers and the Envelope Manufacturers Association—united two years ago to address postal reform and recently began to discuss how to work together to keep legislation on track. "We’ve got a loose coalition formed," Wientzen said.

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