Fixing The USPS.

Water torture is quicker than reform

Reforming the United States Postal Service (USPS) isn't the hottest topic at Washington, D.C., cocktail parties this season. You don't hear postal reform debates on the T-ball diamonds of the White House lawn. But for those who rely upon an effective, efficient and inexpensive national mail delivery network, these are urgent issues.

The USPS may -- or may not -- be in financial trouble. Actually, it is hard to tell. And that may be one of the more perplexing problems in the debate. The USPS is not very forthcoming in presenting financial information.

Capitol Hill refers to problems with fiscal "transparency" at postal headquarters. The independent Postal Rate Commission constantly complains about the reliability of USPS cost and revenue figures. The Government Accounting Office has reported serious shortcomings in USPS financial reporting.

So when the USPS lamented the likelihood of $2 to $3 billion losses in the current year, many were skeptical. It was perceived that the USPS was trying to put the worst possible "spin" on finances in an attempt to:

* Increase rates twice in calendar year 2001 (done);

* Build pressure for another rate filing later this autumn;

* Affect negotiations and arbitration deliberations with employee groups;

* Capture the attention of Capitol Hill for more competitive freedoms and flexibility.

That perception appears accurate. The projected deficit may be less than $1 billion. Yet, it can be expected that the USPS will file another rate increase proposal sometime in October.

Legislative reforms?

There are actually two, very distinct schools of thought on whether the USPS needs greater legislative freedoms or whether the USPS should take better advantage of competitive flexibility already built into Title 39 of the US Code.

For some time the USPS has expressed a desire for legislation that would address:

* People -- labor, benefits and retiree costs;

* Products -- the ability to introduce and set prices for new competitive products and services;

* Prices -- the flexibility to in crease (or decrease?) competitive rates faster than the current 10-month cycle; and the ability to offer negotiated rates or discounts.

Others in the postal community believe that current law allows the USPS much greater competitive flexibility than it is currently exercising. Note that new Postmaster General Jack Potter has expressed an interest in more aggressively "pushing the envelope" on the competitive freedoms already incorporated in the statute.

What reforms might improve upon the national mail delivery network? There are no fewer than four substantial legislative proposals floating around Capitol Hill that are designed to provide reform relief to the USPS.

The USPS Board of Governors proposal has been soundly criticized by postal employee groups. Proposals put forth by mailers and USPS employees are unacceptable to. postal competitors. The United Parcel Service proposal garners little support from the postal community and the proposal by the House Committee, on Government Reform stalled in the last Congress.

Considering the broad differences among special interests, is postal reform a political possibility? Anything is possible -- especially in Washington, D.C. But, realists remind us that it's taken the House Committee more than six years to move a reform bill out of the subcommittee only to have it stall at the full committee level. And remember, the House of Representatives is usually much faster at moving new legislative initiatives than the Senate.

However, all of the political arithmetic would be altered if the USPS were perceived to be in a genuine crisis. Postal leadership, labor, mailers, and others might move very quickly to avoid a postal train wreck.Absent a real crisis however, postal reform is on a very slow political track.

How will nonprofit fundraisers and publishers be affected by action on Capitol Hill? Last year the Alliance of Nonprofit Mailers and others worked hard to pass legislation that protects the preferred postal rate for nonprofit mailers. That bill, S. 2686 (now Public Law 106-384) set discounted rates for Standard mail fundraisers at approximately 60 percent of commercial rates and set a 5 percent discount on nonprofit Periodicals rates vs. commercial rates. Any realistic proposal promoted on Capitol Hill will contain a continuation of the benefits of this new legislation.

There are some in Washington who promote a legislative approach that would free the USPS from the expensive responsibilities of universal service (unprofitable, smaller post offices and preferred postal rate privileges). Vigilance by nonprofit leaders should protect the nonprofit community from the passage of these types of proposals.

Any efforts to reform the USPS are going to take time. In that time, USPS management must continue its efforts to find new competitive opportunities that exist in the current statute.

Most importantly perhaps, USPS management should respond to criticisms of poor "fiscal transparency." If mailers, Congress and the general public perceive the USPS is "cooking the books," then real postal reforms will take even longer to deliver.

Some might argue that the reinvention of the USPS has been underway for the past few years. For nonprofit advocates, fundraisers and publishers who rely on the mail, the future of postal reform will affect our success in the way we communicate with our constituents and supporters.

Neal Denton is the executive director of the Alliance of Nonprofit Mailers in Washington, D.C.