One sticking point removed in postal reform measure

House and Senate members meeting with White House officials on the Postal Service overhaul bill might have found common ground on how the agency should spend its growing escrow fund.

After meeting with White House Chief of Staff Joshua Bolten last week, Senate Homeland Security and Governmental Affairs Chairwoman Susan Collins, R-Maine, said she felt "confident that we've reached a solution" on the escrow fund, one of the issues that has stalled final approval of the sweeping bill.

Collins said language in the Senate bill allowing the Postal Service partial access to the fund to pay for future employee health benefits and operating costs probably will be included in the conference report.

The Senate bill that passed in February requires the agency to use 88 percent of the escrow account for health benefits, while the House version calls for a minimum two-thirds contribution. The remainder would be used for operational costs to offset possible rate hikes.

The White House objected to both versions, arguing that the entire escrow -- holding about $3 billion and growing -- should pay for benefits.

The White House also opposes proposals in the House and Senate versions that would shift to the Treasury Department the costs of postal workers' military pensions. The move would add a projected $27 billion to the federal deficit, and President Bush has said he would not sign a bill that is not budget neutral.

Talks among Bolten, Collins and House Government Reform Chairman Tom Davis, R-Va., also seek to reconcile the pension issue. The Postal Service contends rate increases are inevitable if it is forced to maintain the liability.

Davis said "we're close" to naming House conferees and approving the first Postal Service overhaul bill in three decades. He said he expected conferees to be named and the conference report voted on by the July 4 recess.