Copyright 1999 Federal News Service, Inc.
Federal News Service
MARCH 4, 1999, THURSDAY
SECTION: IN THE NEWS
LENGTH:
843 words
HEADLINE: PREPARED STATEMENT OF
THE
HONORABLE JOHN M. MCHUGH
CHAIRMAN
BEFORE THE HOUSE
GOVERNMENT REFORM COMMITTEE
SUBCOMMITTEE ON THE
POSTAL SERVICE
SUBJECT - HR 22 HEARING
BODY:
Good Afternoon. The Subcommittee's third
heating in the 106th Congress will come to order. I welcome all of my
colleagues.
Three weeks ago, we heard from the Postal Service, the Rate
Commission, and the postal employee groups on the current version of HR 22, as
passed by the Subcommittee last fall. Our four-year journey continues today as
we hear from cabinet departments and a variety of competitors and customers of
the Postal Service, both "live" and "for the record." Such a hearing is
consistent with our longstanding approach of attempting to ensure that we obtain
as many points of view on the legislation as practical. I look forward to yet
another full, frank, and fair exchange with all four of today's panels.
As I
have consistently maintained, the goal of HR 22 is two-fold: to provide the
Postal Service greater freedom to compete, both today and into tomorrow, in
order to successfully carry out its universal service mission, while at the same
time, establishing new rules to ensure fair competition and protect the public
interest. We will hear today from some who suggest that the best alternative is
to generally keep the status quo and restrict the Postal Service to its
noncompetitive products, leaving it unresponsive as demand for those services
continues to decline. Of course, many of these same groups also demand the
Postal Service somehow provide lower rates and better service.
Given such
statements, I believe it's important to underscore that because of HR 22's price
caps, strong oversight, and overall incentives for greater competitiveness and
efficiency, this bill would almost surely result in lower rates and better
postal service for noncompetitive customers compared to what rates and service
will be if HR 22 is not ultimately enacted. HR 22 strengthens consumer
protections through such provisions - among others - as quality-of- service
reviews, complaint processes with much greater enforcement power, subpoena
power, and annual audits.
Let's take price caps as one example. Rather than
being a totally untested and unknown process, as a few of the testimonies
submitted today imply, in reality, eight foreign nations presently use price cap
plans to regulate their post offices' rates. So it's not some blind journey into
the unknown. While price caps would provide the Postal Service new pricing
freedom, they would also rectify a problem with the 1970 Act. Currently, the
Service has sole discretion to determine the overall level of revenues to be
extracted from captive customers, and as such, has little reason to control
costs. Clearly, an independently administered system of price caps would
represent a vast improvement in protecting the public interest.
Some mailers
apparently feel that they are tiding a winning trend with respect to their
particular rates as determined in the last couple of rate cases and, therefore,
assume that this particular trend line will continue. However, I would suggest
we don't have the luxury of enjoying the future until that future has actually
become the past. When you have a system that is without constraint in any
meaningful measure as to the overall level of revenues that the Postal Service
can demand in a rate case, then no one should feel secure about their likely
position tomorrow. Perhaps a few of those folks who are all warm and fuzzy about
their future rate trends and protections under the existing framework might wish
to speak with the nonprofit mailers testifying today who provide a somewhat
different perspective.While this may be the last of four years of Subcommittee
hearings on HR 22, we are at step one of the legislative process and there is
still a long way to go. At the conclusion of today's heating, as we have since
the beginning, we will fully digest all of the comments received, and modify the
bill to respond to those constructive concerns and suggestions that have been
put forward.
I would be remiss if I did not note a special coincidence
today. I understand that them will be a memorial service this afternoon for a
legendary and well-respected member of the House, Mo Udall. As many know,
Congressman Udall was one of the key forces in making the Postal Reorganization
Act a reality in 1970. Indeed, as just one example of how far the Postal Service
has come from its challenges in those early days, we should recall Mr. Udall's
joking remedy for inflation in 1972: "Let's turn inflation over to the post
office. That'll slow it down." I know our departed friend would be pleased to
know that through the work he helped to begin - and especially because of the
dedication of the hardworking postal workers - that joke no longer works.
Times have certainly changed, and the postal system he helped create has
served this nation well for more than a generation. As we continue the journey
of modernizing our nation's postal laws, I know that we will succeed if we
infuse our efforts with the vision and bipartisanship that Congressman Udall and
his colleagues brought to the table nearly 30 years ago.
END
LOAD-DATE: March 6, 1999 
