McHUGH'S LANDMARK POSTAL REFORM RECEIVES PRESIDENT'S STAMP OF APPROVAL
President Bush Signs Legislation to Modernize Nation’s Postal Laws
Washington,
Dec 20, 2006 -
After 12 years of hard work on an issue that impacts every household and business in America, Congressman John M. McHugh’s (R-NY) landmark reform of the U.S. Postal Service was signed into law by President Bush today. McHugh joined the President at The White House for a formal signing ceremony. The comprehensive legislation will modernize operations and ensure the agency’s future solvency, while having virtually no impact on the way the American mailing consumer interacts with the Postal Service. This marks the first major change to the nation’s postal laws since President Nixon signed legislation creating the U.S. Postal Service in August 1970.
“For me, and many with whom I have worked over the past 12 years, this is a major achievement,” McHugh said. “We have taken a decisive step to ensure the future of a service that virtually all Americans have come to rely on in their daily lives.
“The legislation updates the Postal Service’s antiquated, costly regulatory system, toughens oversight, and provides the Postal Service the tools to both act and compete as a modern business. Our nation has moved into the 21st Century, and it is finally time that our postal delivery structure has too,” McHugh noted.
McHugh served as Chairman of a House Subcommittee on the Postal Service from January 1995 through January 2001, and then continued as the lead sponsor of postal reform efforts as a senior member of the House Committee on Government Reform. During the 108th Congress in 2003 and 2004, McHugh was Chairman of a Special Panel on Postal Reform & Oversight, which the Committee created to respond to a Presidential Commission that evaluated and concurred with the need for reform legislation. McHugh had first introduced a bill to modernize the nation’s postal laws in June 1996, and continued to reintroduce revised versions in each subsequent Congress.
Overall, the legislation retains the key principles of reform McHugh has been championing over the last dozen years. It also provides compromise between the House, Senate, and Administration on a number of issues. Specifically, it includes:
Modern Rate Regulation
– shifting the basis of the Postal Rate Commission from a costly, complex scheme of rate cases to a modern system designed to ensure that rate increases generally do not exceed the annual change in the Consumer Price Index. This applies only to market-dominant products (letters, periodicals, advertising mail) because the Postal Service is provided with different pricing freedom for its competitive products (Express Mail, Priority Mail, etc.). The compromise includes a tighter cap on the cost of postage, prohibiting the Postal Service from raising its prices above inflation for the next 10 years.
Combining Market Disciplines with Regulation
– combining market mechanisms with Commission regulation to govern the rates of competitive products. The Postal Service would be given additional pricing freedom but would lose favored legal treatment for such products.
Limitations on Postal Monopoly and Nonpostal Products
– requiring the Postal Service to only offer postal services and for the first time defining exactly what constitutes “postal services.” The bill also revises the authority of the Postal Service to regulate competitors.
Reform of International Mail Regulation
– clarifying the authority of the State Department to set international policy, applying customs laws equally to postal and private shipments, and giving the Postal Service the authority to contract with airlines for transport of international mail.
Strengthening of the Commission
– giving the PRC “teeth” by granting it subpoena power and a broader scope for regulation and oversight. The PRC would be renamed the “Postal Regulatory Commission.”
Maintaining Budget Neutrality –
including Administration-proposed language that eliminates the escrow account and puts the Postal Service in a better position with regard to retiree health liabilities. OMB scores the bill’s language as budget neutral.
Providing Greater Oversight –
requiring a greater role for the regulator in overseeing the performance of the Postal Service. For the first time ever, the Postal Service will be held accountable for delivering all classes of mail on time.
