Postal Reform Update from our CEO Tim Johnson

On August 13th our LSC met with a representative of the Postal Regulatory Commission to discuss the upcoming “lame duck” session of congress. The last postal reform bill passed in 2006 during lame duck (the time between the elections and the seating of the new congress).
Here’s some of what I took away from last Monday’s meeting:
1. The Postal Reform that was passed in 2006 was primarily about the future process for setting postal rates.  That legislation passed very, very late in the 2006 lame duck session.
2. The Postal Reform we’re hoping for this time around is more complex.  Postal rates, specifically the possibility of an exigency rate case is an issue; but there are many other concerns too: Closing postal facilities, 5-day delivery, incenting USPS employees to retire, curbside delivery, pre-funding benefits, etc.
3. Note: the phrase, ‘incenting USPS employees to retire,’ in point #2 above; does not read, ‘layoff.’  No one is proposing or arguing for USPS layoffs.  The USPS definitely needs to reduce their headcount but they have hundreds of thousands of employees who are nearing or beyond retirement age.  There is no need for the USPS to layoff anyone in order to achieve the needed reforms.
4. One issue that seems particularly complex and crucial for this upcoming round of Postal Reform is empowering someone or some group of people to make things happen if the planned reforms are not having their intended affect.  That “someone” or that “group” would be appointed by Congress.  They will need to have some sort of ‘hammer’ to make stuff happen.
5. Though the House has not yet passed any Postal Reform legislation, some staff members from the House and the Senate are working on Postal Reform behind closed doors.  (‘How a bill becomes a law’ is not exactly like we were taught in 9th grade.)
6. One of the primary tasks of the LSC continues to be to educate Congress.  In particular, we are trying to help them see postal issues in the context of a supply chain that begins with lumber/paper manufacturer and includes: mailers, all of the users of the USPS and the many companies that sell equipment and services to the printing, direct marketing and mailing industries.  Literally millions of private sector jobs are at stake.  It is tough because 100,000 USPS jobs are easier for Congress to see.  We are having a positive affect; whether it is enough remains to be seen.
7. A second, education related, task of the LSC is helping Congress see that ‘kicking the can’ down the road is not the best approach.  Real change needs to take place; delaying reform will make the future changes more difficult.
8. Both parties know that Postal Reform must happen.  Unfortunately, politics is reality.  At this time, both parties are relatively disinterested in getting things done; their focus is on getting re-elected.
9. The possibility of business disruption because the USPS is out of cash to pay their employees will not occur until next summer.
10. Unfortunately, this Congress does not seem willing to act until they must.  Never the less, I think that Congress will get something done with regard to Postal Reform before the USPS faces the threat of business disruption.  I think that Congress will get some form of Postal Reform done during this upcoming lame duck session, but that is far from certain.  That reform will likely be enough to eliminate the threat of business disruption for 1-2 years.
11. At this time, congressional priorities during lame duck are not known.  The outcome of the elections will have an affect on those priorities.
12. In 2013, the LSC is planning to shift our focus from being exclusively on Postal Reform to Postal Reform, Privacy Issues and Sales Tax on Postage.
13. It seems likely that privatizing more of what the USPS does is likely to gain traction in the future.  I suspect that receiving mail from the mail creators and the delivery of mail to the recipient’s mailbox will likely remain publically controlled for a long time.  However, with the cost pressure continuing to build, I would not be surprised to see more of the services between receipt and delivery move toward privatization.

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