Postal Service Overhaul Could Lose Impetus in New Congress

CQ Daily Monitor
January 3, 2001

The idea of organizing the U.S. Postal Service could end up in the dead-letter office now that Rep. John McHugh, R-NY, will no longer chair the Government Reform Postal Subcommittee.

McHugh labored in vain for six years to move a wide-ranging postal overhaul bill (HR 22). Now that he's leaving the term-limited post, it's unclear whether his successor will be as determined to pursue changes at the billion-dollar government agency.

"There's a real question of what's going to happen," said McHugh's chief of staff, Robert Taub. "The big fear is: Do we return to how postal issues are usually handled on the Hill - benign neglect or partisan expediency."

The postal service can scarcely afford either. It lost $199 million during the last fiscal year and projects a $1.2 billion deficit for fiscal 2001, despite a 1-cent increase in the first-class rate set to go into effect Jan. 7.

At the root of the agency's problems are e-mail and other fast-changing technologies that are eating away at its core, letter-mail business. It also faces growing competition from private shipping companies like Federal Express and United Parcel Service.

To cope with those problems, McHugh's bill would have allowed the postal service to price its products more flexibly and experiment and compete in the private sector with new, more profitable services. At the same time, it would have capped future rate increases for non-competitive letter mail.

But the bill bogged down in committee amid a chorus of complaints from potential competitors, such as newspapers, direct mail companies and the world's largest private shipper, UPS. Some postal unions also balked at McHugh's bill.

"It's very unclear whether or not HR 22 or some version of that will be introduced in the new Congress, " said UPS spokesman Tad Segal. "Reintroducing that identical legislation would not necessarily be productive."

The postal service continues to appeal for congressional action. On Dec. 5, after the postal service reported its heavy losses for the year, the Postal Service Board of Governors, complained that Congress must overhaul the system. if the Postal Service is going to continue maintaining high quality universal service."

But Taub said McHugh isn't anxious to take the lead again, preferring to give the new subcommittee chairman "a chance to find their own way.