Feb. 14, 2012 – 12:31 a.m.

Postal Service Debate Centers on New Areas of Revenue

Lawmakers trying to avoid Postal Service scenarios that involve ending Saturday deliveries and massive layoffs are floating ideas to remake the post office as a broader enterprise with new revenue streams.

But many of those ideas come from congressional Democrats and other allies of organized labor and federal workers. Republicans are hesitant to allow the USPS to engage in further competition with private sector companies.

President Obama’s fiscal 2013 budget, sent to the Hill on Monday, proposes delivering mail only five days a week, raising postage by 1.8 percent, and “more collaboration” between the postal service and state and local governments.

The Postal Service has been an independent agency since the 1970 postal overhaul (PL 91-375), but cannot enter new lines of business unless they specifically are permitted by law.

Senate Homeland Security and Governmental Affairs Chairman Joseph I. Lieberman, I-Conn., wants to let the Postal Service pursue new ventures in order to avoid service reductions. Lieberman’s postal overhaul legislation (S 1789) would preserve six-day mail delivery for at least two more years. The chairman is hoping for Senate action on his bill after next week’s Presidents Day recess.

Lieberman agrees with the idea of Postal Service links to state and local governments, and has shared the example of having state fishing licenses sold through post offices. Sen. Bernard Sanders, I-Vt., has called for an “entrepreneurial business model” to help preserve post offices in rural areas.

Lieberman says he hopes to assuage concerns of small-government conservatives with his inclusion of a ban on “unfair competition” with the private sector, but one of his ideas — Postal Service delivery of interstate shipments of beer and wine — would put mailmen in competition with FedEx and United Parcel Service.

House Oversight and Government Reform Chairman Darrell Issa, R-Calif., is skeptical that an expansion of revenue sources is going to solve the Postal Service’s financial problems. Comprehensive reform, he argues, is needed to reduce costs in line with the nation’s reduced use of the postal system.

But Issa is open to some new Postal Service ventures involving state and local government. The House version of the postal overhaul bill (HR 2309) would allow such undertakings with states and the federal government as long as the new activities do not lead to further losses for the agency. That bill also would allow the Postal Service to pursue revenue by selling advertising on its buildings and vehicles.

But Issa cautions that allowing the tax-exempt Postal Service to compete against private-sector businesses in new fields would create a whole new set of problems.

Social conservatives, including Rep. Jason Chaffetz, R-Utah, say that they likely would oppose allowing the USPS to deliver alcoholic beverages because it would be so difficult to prevent underage customers from placing and receiving orders through the mail.

Issa and Chaffetz also have signaled resistance to the launch of USPS ventures such as coffee shops to retail kiosks. “I’m worried about competition with Main Street. The Postal Service is not paying local property taxes,” Chaffetz says.