Postal Service fights overhaul bill's accounting language

The Postal Service is contesting language in both the House and Senate versions of a postal overhaul bill the agency contends would damage its ability to compete with private companies such as UPS.

At issue is how the agency's general accounting practices will be determined once the overhaul legislation is enacted. Both versions say the Treasury secretary -- "in consultation with" the Postal Service -- will recommend the accounting method the agency should use in pricing products such as overnight mail and parcel shipping that compete in an open market alongside UPS and FedEx.

Treasury's report, which would also include advice from a private accounting firm, would be submitted to the newly created Postal Regulatory Commission for final consideration. The provision was created to keep the Postal Service from subsidizing the costs of its competitive products with revenue from first-class mail.

According to one postal insider, creating separate funds for competitive products and first-class mail will keep the Postal Service from offering its products at a lower price than its competitors.

While the Postal Service does not object to new accounting rules for its first-class and competitive products, representatives say the House and Senate language prevents the agency from having an active role in determining the guidelines. The agency is lobbying to alter the language to give the Postal Service equal footing in negotiating how it accounts for its products, a spokesman said.

He added that the eight Senate conferees and the likely House conferees are "keenly aware" of the agency's position, and that "people are giving us a sympathetic hearing." Postal overhaul legislation, sponsored by Rep. John McHugh, R-N.Y., passed overwhelmingly in the House last July.

The Senate's version, offered by Homeland Security and Governmental Affairs Chairwoman Susan Collins, R-Maine, was approved by the full chamber last February.

A veto threat from the White House has stalled the naming of House conferees and a final vote.