Lawmaker hopes panel's report will drive reform at Postal Service

A postal commission report due by the end of the month may finally provide momentum for much needed reform at the Postal Service, Rep. John McHugh, R-N.Y., said Tuesday at a forum hosted by a postal workers' union.

By July 31, the nine-member Commission on the U.S. Postal Service, created in December, will deliver a report to President Bush that recommends enhancing the Postal Service's financial viability. The report will suggest that the agency retain a monopoly on delivering the mail, but work on consolidating its facilities and consider outsourcing some tasks. Panel members would also like to grant the agency more flexibility to initiate rate hikes.

McHugh, who has chaired the House Government Reform Committee's Special Panel on Postal Reform and Oversight since 1994, said he has yet to convince many of his fellow lawmakers, or the public at large, that the Postal Service needs a major overhaul. The agency is using an obsolete business model developed in the 1970s, McHugh said in an address at the Brookings Institution to the American Postal Workers Union and other interest groups.

Without reforms, the Postal Service cannot improve its financial health, according to McHugh. The agency ran a $1.7 billion deficit in fiscal 2001 and a $676 million deficit in fiscal 2002. A declining volume of mail is partly to blame, he added. But lawmakers will probably not enact significant postal reform bills until they have a "crisis" on their hands, McHugh speculated. "When things are going to hell, that's when we'll deal with it."

Polls may demonstrate that constituents are generally satisfied with the mail services they receive, McHugh said, but this does not mean that agency reforms are unnecessary. "The vast majority of the American public not only likes, but appreciates the postal services they get because their perspective is from the front porch," he said. "By and large, people don't even think about the Postal Service."

The postal pension reform bill signed by President Bush in late April will help the Postal Service, McHugh said. But he added that he is worried some of his colleagues will view the legislation, which locks postal rates at the current level until 2006 by reducing the amount the Postal Service contributes to the Civil Service Retirement System by $2.9 billion, as the only reform needed.

McHugh said he hopes the commission's report will provide the impetus for reform that has been lacking so far. Whether lawmakers and interest groups agree with the content of every recommendation issued by the commission, its report should foster constructive discussions, he said. The House Panel on Postal Reform and Oversight will hold hearings on the commission's report after its release, McHugh said. Hearing dates have yet to be determined.