Order Code RL32903
CRS Report for Congress
Received through the CRS Web
Postal Reform Bills:
A Side-by-Side Comparison
of H.R. 22 and S. 662
May 5, 2005
Kevin R. Kosar
Analyst in American National Government
Government and Finance Division
Congressional Research Service ˜ The Library of Congress

Postal Reform Bills: A Side-by-Side Comparison
of H.R. 22 and S. 662
Summary
The 109th Congress is considering two bipartisan bills that would reform the
U.S. Postal Service (USPS) — H.R. 22 and S. 662. H.R. 22 was introduced and
referred to the House Government Reform Committee on the first day of the 109th
Congress (January 4, 2005). On April 14, the Government Reform Committee
marked up H.R. 22 and approved it by a vote of 39-0. S. 662 was introduced into the
Senate on March 17, 2005, and referred to the Committee on Homeland Security and
Governmental Affairs.
H.R. 22 and S. 662 are similar to two bills from the 108th Congress — H.R.
4341 and S. 2468 — which cleared committee by unanimous votes but were not
brought to the floor. Like these previous bills, H.R. 22 and S. 662 would attempt to
make the Postal Service focus on its core mission (universal delivery of the mail) by
defining the term “postal services.” The bills would define the categories of postal
services and products as “competitive” or “market-dominant” and prohibit the Postal
Service from subsidizing competitive products with revenues from market-dominant
products.
H.R. 22 and S. 662 are more alike than H.R. 4341 and S. 2468. For example,
previously the House and Senate differed over USPS’s right to invest excess monies
from the Competitive Products Fund in private sector securities and obligations.
H.R. 22 and S. 662 both propose limiting USPS purchases to U.S. Treasury
investments. The bills have also reconciled formerly divergent approaches to limits
on “worksharing” discounts for barcoding and mail sorting.

That said, H.R. 22 and S. 662 possess significant differences. These include:
— the definition of “market-dominant” postal products and services;
— the components and goals of the new ratemaking system for
market-dominant products and services;
— disability payments and retirement;
— retiree health benefits funding;
— the establishment of “modern service standards”;
— the expansion of USPS contracting authority in transportation of
mail; and
— the governance of the Postal Service.
This report will be updated to reflect significant legislative developments.

Contents
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Side-by-Side Comparison of H.R. 22 and S. 662 . . . . . . . . . . . . . . . . . . . . . . . . . 4
Title I — Definitions, Postal Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Title II — Modern Rate Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Title III — Provisions Relating to Fair Competition . . . . . . . . . . . . . . . . . . 18
Title IV — General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Title V — Enhanced Regulatory Commission . . . . . . . . . . . . . . . . . . . . . . 28
Title VI — Inspectors General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Title VII — Evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Title VIII — Miscellaneous, Technical and Conforming Amendments . . . 36
Title IX — Postal Pension Funding Reform Amendments . . . . . . . . . . . . . 38

Postal Reform Bills: A Side-by-Side
Comparison of H.R. 22 and S. 662
Overview
The 109th Congress is considering two bipartisan bills that would reform the
U.S. Postal Service (USPS) — H.R. 22 and S. 662. H.R. 22 was introduced and
referred to the House Government Reform Committee on the first day of the 109th
Congress (January 4, 2005). On April 14, the Government Reform Committee
marked up H.R. 22 and approved it by a vote of 39-0. S. 662 was introduced into the
Senate on March 17, 2005, and referred to the Committee on Homeland Security and
Governmental Affairs. Both bills were sponsored by the chairpersons and ranking
minority members of the committees of jurisdiction.
H.R. 22 and S. 662 share many features — more so than the postal reform bills
of the 108th Congress.1 To take three prominent examples, both bills would require
increased financial transparency at USPS by requiring USPS to prepare quarterly and
annual reports that contain the same information that publicly traded corporations file
with the Securities and Exchange Commission. H.R. 22 and S. 662 also now share
identical language regulating USPS discretion to enter into work-sharing agreements
with the private sector, a matter of concern to large mailers and postal employee
unions. Finally, the bills share identical language on the operation of the proposed
Postal Service Competitive Products Fund. Previously, the House and Senate
differed over USPS’s right to invest excess funds in private sector securities and
obligations. Now, H.R. 22 and S. 662 agree that any excess funds may be invested
only in U.S. Treasury investments, a concession to the Treasury Department.
Both bills propose changes that would have significant effects on the financial
condition of the Postal Service. H.R. 22 and S. 662 would transfer back to the
Treasury the responsibility to fund pension benefits arising from former military
service of postal workers. This would reverse a provision of the Postal Civil Service
Retirement System Reform Act of 2003 (P.L. 108-18) that could cost USPS (and its
customers) $27 billion. H.R. 22 and S. 662 would abolish the escrow account
provided for in P.L. 108-18.2
H.R. 22 and S. 662 also propose incremental reforms that would attempt to
make the Postal Service operate more openly and predictably. Both bills would
require USPS to focus on its core mission (the delivery of mail) by defining the term
1 For a similar comparison of postal reform legislation in the 108th Congress, see CRS
Report RL32402, Postal Reform Bills: A Side-by-Side Comparison of H.R. 4341 and S.
2468
, by Kevin R. Kosar.
2 On pension and escrow issues, see CRS Report RL32346, Pension Issues Cloud Postal
Reform Debate
, by Nye Stevens.

CRS-2
“postal services.” H.R. 22 and S. 662 also would define various postal products and
services as “competitive” or “market-dominant” and prohibit USPS from subsidizing
competitive products with revenues from market-dominant products. Additionally,
the bills would transform the Postal Rate Commission into a broader regulatory body
with subpoena powers (the new Postal Regulatory Commission, hereafter PRC).
H.R. 22 and S. 662 would also replace the present adversarial postage ratemaking
process, which typically takes 10 to 14 months, with a rate-cap system that would
permit USPS to raise postage rates on market-dominant products at the rate of
inflation. The Board of Governors (BOG) of USPS would establish rates and classes
for competitive products.
While very similar, H.R. 22 and S. 662 do possess substantive differences,
which are described below.
The Definition of Market-Dominant Postal Products and Services. H.R. 22
and S. 662 differ over the definition of market-dominant products. Both bills would
include first class, library, and media mail, as well as postcards, in their definitions.
However, H.R. 22, Section 202, would include periodicals, standard mail, and bound
printed matter in this category. S. 662, Section 202, omits these and includes single-
piece parcel post and single-piece international mail. The inclusion or non-inclusion
of a product in this classification is of concern to mailers and competitors of the
Postal Service (such as UPS and FedEx) because of the possible effects on product
prices. Critics have long complained that USPS keeps the prices for some products
(such as parcels) artificially low, thereby garnering a larger market share. USPS is
accused of doing this by failing to attribute the full cost of providing such a product;
these products are said to be “cross-subsidized” by the large earnings USPS earns on
first-class mail. Under both H.R. 22 and S. 662, products that are not defined as
market-dominant would fall into the “competitive products” category and would have
to fully attribute the costs of providing them. Some believe that including, for
example, parcels in the competitive products category would lead to increased prices
for parcel delivery service (which competitors would likely favor and large mailers
would likely disfavor).
The Components and Goals of the New Ratemaking System for Market-
Dominant Products and Services. While H.R. 22, Section 201, and S. 662, Section
201, are similar on the components and goals of the new ratemaking system,
significant differences remain. Both would require USPS to cap the prices of market-
dominant products at the Consumer Price Index for All Urban Consumers, but S. 662
would require the new ratemaking system to permit USPS to exceed the rate cap only
under “extraordinary” circumstances. H.R. 22 would allow USPS to exceed the rate
cap if PRC held a public hearing and determined that breaking the rate cap “is
reasonable and equitable and necessary.” (The Postal Service would like to have this
rate-cap escape clause because it believes that staying below the CPI will be
“extremely challenging” due to falling revenues, the growing number of delivery
points, and USPS’s limited control over its costs.)3 H.R. 22 would prohibit USPS
3 Testimony of John E. Potter, Postmaster General/CEO, United States Postal Service,
before U.S. Senate, Committee on Homeland Security and Governmental Affairs, U.S.
Postal Service: What is Needed to Ensure its Future Viability?
, hearings, 109th Cong., 1st
(continued...)

CRS-3
from raising the postage rate of any subclass of mail more than the CPI with
permission from PRC. S. 662 would apply this restriction at the class level — a
provision the Postal Service prefers because it gives USPS greater flexibility to adjust
rates. Finally, H.R. 22 would require the new ratemaking system to establish a “fair
and equitable” schedule for rates and the classification system; S. 662 would not, and
instead would require that the new system “allocate the total institutional costs of the
Postal Service equitably between market-dominant and competitive products.”

Disability Payments and Retirement. S. 662, Section 902, would encourage
injured workers of retirement age to retire rather than go on disability leave. Under
current law, an employee suffering total disability from a workplace injury is entitled
to compensation of 66b% of monthly pay. S. 662 would reduce this to 50%. H.R.
22 does not carry this provision, and is favored by USPS unions.
Retiree Health Benefits Funding. Both H.R. 22, Secs. 901-904, and S. 662,
Secs. 802-804, would return the obligation for postal worker benefits attributable to
military service to the Treasury and establish a Postal Service Retiree Health Benefits
Fund for the purpose of pre-funding retiree health benefits. The two bills, however,
have different approaches to the unfunded retiree health benefits liability. H.R. 22
would require USPS to make annual payments into the fund consisting of a
contribution to cover predicted retirement health care costs of current postal workers
and interest on the contribution owed for both current and future annuitants. The
House bill also would require that two-thirds of the annual escrow “savings” be
devoted to the fund. S. 662 would also require an annual contribution to the fund,
but it would consist of a contribution to cover predicted retirement health care costs
of current postal workers and an installment payment on an amortization schedule to
reduce the unfunded liability. The Postal Service has expressed a preference for S.
662 because it does not include the two-thirds provision (which limits USPS
discretion). USPS also has said that having a predictable annual amortization
payment would make operating under a rate cap easier.
The Establishment of Modern Service Standards. S. 662, Title III, would
require PRC to establish service standards designed to achieve four objectives
(provided they are consistent with USPS’s universal service obligation):
! Enhance the value of the Postal Service to both senders and
recipients;
! Preserve regular and effective access to postal services in all
communities, including those in rural areas or where post offices are
not self-sustaining;
! Reasonably assure USPS customers delivery reliability, speed, and
frequency consistent with reasonable rates and best business
practices; and
! Provide a system of objective external performance measurements
for each market-dominant product as a basis for measurement of
USPS performance.
3 (...continued)
sess., Apr. 14, 2005, available at [http://hsgac.senate.gov/_files/PMGTESTIMONY
FINAL412.pdf], pp. 15-17.

CRS-4
The Postal Service would be required to prepare a report each year that details its
progress in achieving objectives. The USPS Inspector General would be required to
examine this report and issue an assessment of its own on USPS compliance with the
law. Both reports would be submitted to Congress. H.R. 22 excludes this title
altogether. Instead, Section 204 of H.R. 22 would require USPS to develop its own
service standards and PRC to monitor its achievement of them.
The Expansion of USPS Contracting Authority in Transportation of Mail.
S. 662, Section 1002, would remove present protections in the law that favor airlines
based in the United States. Section 1002 would permit the Postal Service to
“contract with any air carrier or foreign air carrier for the transportation of mail ...
either through negotiations or competitive bidding.” S. 662 would also require that,
six years after the date of enactment, “every contract that the Postal Service awards
to a foreign air carrier ... shall be subject to the continuing requirement that air
carriers shall be afforded the same opportunity to carry the mail of the country to and
from which the mail is transported.” H.R. 22, as introduced, carried a similar
provision at Section 805. This provision was struck during markup by the House
Government Reform Committee on April 14. The Postal Service would like
increased freedom to solicit bids for foreign air carrier transportation of mail because
it would reduce costs;4 domestic-based air carriers and their employee unions would
prefer that current restrictions remain in place.
Governance of the U.S. Postal Service. Both bills would amend present law
so that members of the Board of Governors would be chosen “solely on the basis of
their demonstrated ability in managing organizations or corporations (in either the
public or private sector) of substantial size.” H.R. 22 would define the term
“substantial size” to mean 50,000; S. 662 would not define this term. H.R. 22 would
require that an early vacancy on the Board of Governors be filled by a person
nominated with the concurrence of labor unions; S. 662 would not.
Side-by-Side Comparison of H.R. 22 and S. 662
This side-by-side comparison uses H.R. 22 from the 109th Congress as reported
by the House Government Reform Committee on April 14, 2005, as its base. The
left-hand column provides digests of the sections of H.R. 22; the right-hand column
holds digests of the sections of S. 662 from the 109th Congress. As the reader will
see, the titles and sections of the two bills are not always the same. For example, S.
662 carries a title on “Modern Service Standards;” H.R. 22 does not. H.R. 22 carries
a section (601) that would create an Inspector General of the Postal Regulatory
Commission; S. 662 does not. In some cases, the bills carry similar provisions but
place them in different titles. For example, Section 407 of H.R. 22 proposes reforms
to the structure of the collective bargaining process; so does S. 662, but at Section
505. In such cases, the columns cross-reference one another, directing the reader to
the comparable provisions of the bills.
4 For further information, see U.S. Government Accountability Office, International Mail
Air Transportation
, GAO-05-529R (Washington: GAO, 2005).

CRS-5
Side-by-Side Comparison of House and Senate Postal Reform Bills (109th Congress)
H.R. 22
S. 662
Title I — Definitions, Postal Services
Title I — Definitions, Postal Services
Sec. 101. Definitions.
Sec. 101. Definitions.
Would amend 39 U.S.C. 102 to define the following terms: product, rates,
Identical.
market-dominant product, competitive product, consumer price index, and year.
Would amend 39 U.S.C. 10 to define “postal service” as “the carriage of letters,
Would define “postal service” as “the physical delivery of letters, printed matter,
printed matter, or mailable packages, including acceptance, processing,
or packages weighing up to 70 pounds, including physical acceptance, collection,
delivery, or other services supportive or ancillary thereto.”
sorting, transportation, or other functions ancillary thereto.”
Would define “consumer price index” to mean the “monthly Consumer Price
Equivalent provision at Sec. 201 (see below).
Index for All Urban Consumers.”
Sec. 102. Postal Services.
Sec. 102. Postal Services.
Would amend 39 U.S.C. 404 to include the following provision: “nothing in this
Identical.
title shall be considered to permit or require that the Postal Service provide any
special nonpostal or similar services, except that nothing in this subsection
shall prevent the Postal Service from providing any special postal or similar
services provided by the Postal Service as of May 12, 2004.”
Not included.
Would also include a conforming amendment to 39 U.S.C. 2003(b)(1) by striking
“and nonpostal,” a provision that USPS has used to justify entering businesses
outside its core mission.

CRS-6
H.R. 22
S. 662
Sec. 103. Financial Transparency.
Sec. 103. Financial Transparency.
Would amend 39 U.S.C. 101 and 39 U.S.C. 5001 to require the USPS to “be
Equivalent provision included at Sec. 605.
subject to a high degree of financial transparency, including its finances and
operations, to ensure fair treatment of customers of the Postal Service’s market-
dominant products and companies competing with the Postal Service’s
competitive products.”
Identical provision at Sec. 204 (see below).
Would provide for significant reforms in USPS financial reporting. Would
require USPS to file with the PRC reports containing the same information as the
quarterly Form 10-Q, annual Form 10-K, and periodic Form 8-K reports that
publicly-traded corporations must file with the Securities and Exchange
Commission. The Form 10-Q type reports required would have to include
information on the USPS’s financial obligations to retirees. USPS would be
required to obtain the opinion of an independent auditor on the information on its
reporting on these obligations. Would also require USPS to comply with the
financial reporting rules “prescribed by the Securities and Exchange Commission
implementing section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262;
P.L. 107-204) beginning with fiscal year 2007 and in each fiscal year thereafter.”

Title II — Modern Rate Regulation
Title II — Modern Rate Regulation
Sec. 201. Provisions Relating to Market-Dominant Products.
Sec. 201. Provisions Relating to Market-Dominant Products.
H.R. 22 would define market-dominant products to include:
S. 662 would define market-dominant products as:
! single piece first-class letters (both domestic and
! first-class letters (both domestic and international);
international);
! single piece international mail;
! all first-class mail;
! Not included.
! single piece first-class cards;
! first-class cards;
! media mail;
! Identical.
! library mail;
! Identical.
! special services;
! Identical.

CRS-7
H.R. 22
S. 662
! periodicals;
! Not included.
! standard mail;
! Not included.
! bound printed matter.
! Not included.
! Not included.
! single-piece parcel post;
Would amend 39 U.S.C. 3621 and 3622 to require the new Postal Regulatory
Identical except that PRC would be required to establish the new rate regulation
Commission (see Sec. 501 below) to establish a “modern system for regulating
system within 12 months of enactment.
rates and classes for market-dominant products within 24 months.”
The proposed “modern rate regulation system” would be required to:
Similar provision but would require new rate regulation system to:
! Reduce the administrative burden of the ratemaking process;
! Reduce the administrative burden and increase the transparency
of the ratemaking process while affording reasonable
opportunities for interested parties to participate in that process;
! Create predictability and stability in rates;
! Identical;
! Maximize incentives to reduce costs and increase efficiency,
! Identical;
! Allow USPS flexibility in pricing, assure adequate revenues
! Allow the Postal Service pricing flexibility, including the
(including retained earnings)
ability to use pricing to promote intelligent mail and
encourage increased mail volume during nonpeak periods;
! Maintain financial stability; and maintain high service
! Assure adequate revenues, including retained earnings, to
standards;
maintain financial stability and meet the service standards
established (see below);
! The establishment and maintenance of a fair and equitable
! Would include this provision as a factor not a goal of the rate
schedule for rates and the classification system;
system (see below at p. 8).
! Not included.
! Enhance mail security and deter terrorism by promoting
secure, sender-identified mail;
! Not included.
! Allocate the total institutional costs of USPS equitably
between market-dominant and competitive products.

CRS-8
H.R. 22
S. 662
In crafting this system, PRC would be required to take into account:
In crafting this system, PRC would be required to take into account:
! “The value of the mail service actually provided each class or
! Identical;
type of mail service to both the sender and the recipient,
including, but not limited to the collection, mode of
transportation, and priority of delivery;
! “The direct and indirect postal costs attributable to each class
! “The requirement that each class of mail or type of mail
or type of mail service plus that portion of all other costs of
service bear the direct and indirect postal costs attributable to
the Postal Service reasonably assignable to such class or type;
each class or type of mail service plus that portion of all other
costs of the Postal Service reasonably assignable to such class
or type;”
! “The effect of rate increases upon the general public, business
! Identical;
mail users, and enterprises in the private sector of the
economy engaged in the delivery of mail matter other than
letters;
! “The available alternative means of sending and receiving
! Identical;
letters and other mail matter at reasonable costs;
! “The degree of preparation of mail for delivery into the postal
! Identical;
system performed by the mailer and its effect upon reducing
costs to the Postal Service;
! “Simplicity of structure for the entire schedule and simple,
! Identical;
identifiable relationships between the rates or fees charged the
various classes of mail for postal services;
! “The relative value to the people of the kinds of mail matter
! Identical;
entered into the postal system and the desirability and
justification for special classifications and services of mail;
! “The importance of providing classifications with extremely
! Identical;
high degrees of reliability and speed of delivery and of
providing those that do not require high degrees of reliability
and speed of delivery;
! “The desirability of special classifications from the point of
! Identical;

CRS-9
H.R. 22
S. 662
view of both the user and of the Postal Service;
! “The educational, cultural, scientific, and informational value
! Identical;
to the recipient of mail matter; and
! “The policies of this title as well as such other factors as the
! Identical;
Commission deems appropriate.”
! Not Included.
! The need for the Postal Service to increase its efficiency and
reduce its costs to help maintain high quality, affordable,
universal postal service.
! Not included.
! The establishment and maintenance of a fair and equitable
schedule for rates and classification system.
Would permit the rates and classes regulation system for market-dominant
Would require the new rate system to:
products to include one or more of the following characteristics:
! price caps, revenue targets, or other forms of incentive
! “set annual limitations on the percentage changes in rates
regulation;
based on the Consumer Price Index for All Urban
Consumers;”
! cost-of-service regulation;
! Not included.
! such other forms of regulation as the Commission considers
! Not included.
appropriate to achieve.”
This new system would “not permit the average rate in any subclass of mail to
! “establish a schedule whereby rates, when necessary and
increase at an annual rate greater than the comparable increase in the Consumer
appropriate, would change at regular intervals by predictable
Price Index, unless it has, after notice and opportunity for a public hearing and
amounts;” and
comment, determined that such increase is reasonable and equitable and
! require USPS to provide 45 days public notice before
necessary....”
enacting changes and empower PRC to review proposed rate
changes.
Not included.
Would require the ratemaking system to include “procedures whereby rates
may be adjusted on an expedited basis due to unexpected and extraordinary
circumstances.”

CRS-10
H.R. 22
S. 662
See Sec. 206 below on workshare discounts.
Would define and establish rules on workshare discounts (identical to H.R. 22,
Sec. 206).
Sec. 202. Provisions Relating to Competitive Products.
Sec. 202. Provisions Related to Competitive Products.
Would amend 39 U.S.C. 3631, 3632, and 3633 to list the following as
Similar provision but would define “competitive products” as:
competitive products:
! priority mail;
! Identical;
! expedited mail;
! Identical;
! mailgrams;
! Identical;
! international mail; and
! bulk international mail; and
! parcel post.
! bulk parcel post.
The Board of Governors (BOG) of USPS would establish rates and classes for
Similar provision but would require “the written concurrence of a majority of all
these products. BOG would be required to publish these decisions in the
of the Governors then holding office” to establish rates and classes in the
Federal Register at least 30 days before the effective date of any new rates or
competitive category.
classes.
These rates would be in accordance with PRC regulations that “prohibit the
Similar provision.
subsidization of competitive products by market-dominant products ... and
ensure that each competitive product overs its costs attributable ... and ensure
that all competitive products collectively make a reasonable contribution to the
institutional costs of the Postal Service.”
Differentiates between changes to rates and classes of “general applicability”
Would require 30 days public notice of any changes to rates or classes and review
in the nation as a whole or a substantial region thereof and changes not of
by PRC to ascertain whether the proposed changes are in compliance with PRC
general applicability. For the former, BOG would need to provide 30 days
regulations prohibiting cross-subsidization and cost attribution.
notice in the Federal Register before the effective date of such changes; for the
latter, BOG would be required to file records of their decision with PRC at least
15 days before the effective date.
Not included.
Would also require PRC to conduct a review to determine whether the

CRS-11
H.R. 22
S. 662
institutional costs contribution requirement for competitive products should be
retained in its current form, modified, or eliminated. The first review would have
to be five years after enactment of this bill, with periodic reviews coming every
five years thereafter.
Sec. 203. Provisions Relating to Experimental and New Products.
Sec. 203. Provisions Relating to Experimental and New Products.
Would amend 39 U.S.C. 3641, which provides for temporary changes in postal
Identical.
rates and classes, to create a process for testing new postal products.
In order to test a new product, USPS would be required to file a request with the
Identical.
Postal Regulatory Commission and publish a notice in the Federal Register.
PRC would have the power to approve or disapprove of any new product. A
product would qualify for testing only if it was a “significantly different
product” and would not create a market disruption or unfair competitive
advantage for the USPS. Applications for competitive products would be
required to include costs and revenues attributable (PRC, though, would retain
ultimate power to determine whether a new product should be classified as a
market dominant or competitive product).
Would prohibit market tests for new products from exceeding 24 months;
Nearly identical provision, except that S. 662 would require”[a]ny test that solely
although upon written request of USPS, PRC could extend the trial period 12
affects products currently classified as competitive, or which provides services
months for the sake of determining the feasibility or desirability of a product
ancillary to only competitive products, shall be presumed to be in the competitive
being tested.
product category without regard to whether a similar ancillary product exists for
market-dominant products.”
Would permit a product to be tested only if the total revenue anticipated or
Nearly identical, though Senate bill does not include the term “nationwide.”
received does not exceed $10 million per year nationwide.
Would empower PRC to “limit the amount of revenues the Postal Service may
S. 662 would not empower PRC to “limit the amount of revenues the Postal
obtain from any particular geographic market as necessary to prevent market
Service may obtain from any particular geographic market as necessary to prevent
disruption.” PRC may waive the requirement that a tested product’s revenues
market disruption.”

CRS-12
H.R. 22
S. 662
not exceed $10 million if:
(1) Total anticipated or actual revenues do not exceed $50 million per year;
(2) The PRC determines that the product is likely to benefit the public and meet
an expected demand; the product is likely to contribute to the financial stability
of the Postal Service; and the product is not likely to result in unfair
competition.
Sec. 204. Reporting Requirements and Related Provisions.
Sec. 204. Reporting Requirements and Related Provisions.
Would amend 39 U.S.C. 36 to require the PRC to provide to Congress and the
Identical.
President an annual report “concerning the operations of the Commission under
this title, including the extent to which regulations are achieving the objectives
of the regulation of the prices of market-dominant products.
Would also require an estimate of the costs incurred by the Postal Service in
Not included here but a universal service study would be required at Sec. 702.
providing —
(1) postal services to areas of the nation where the Postal Service either would
not provide services at all or would not provide such services in accordance
with the requirements of this title if it were not required to do so;
(2) free or reduced rates for postal services as required by this title; and
(3) other public services or activities which, in the judgment of PRC, would not
otherwise have been provided by USPS but for the requirements of law.
Would require USPS to prepare and submit to PRC a report including analysis
Similar provision except that S. 662 would not empower PRC to prescribe the
of the costs, revenues, rates, service quality, timeliness, and reliability of
methodology and S. 662 would have the USPS Inspector General audit the report
competitive products no later than 90 days after the end of each year. Would
itself — not the data collection systems and procedures employed to produce it.
require the analysis in the report to conform to methodological specifications
prescribed by PRC. Would require the USPS Inspector General to audit “the
data collection systems and procedures utilized in collecting information and
preparing [this] report” and submit the findings to PRC.

CRS-13
H.R. 22
S. 662
This report should also include information on market-dominant products for
Identical.
which workshare discounts were in effect during the time covered, including the
per-item cost avoided by the Postal Service by virtue of such discount ... the
percentage of such per-item cost avoided that the per-item workshare discount
represents ... the per-item contribution made to institutional costs.”
H.R. 22 would define “workshare discount” as “presorting, barcoding,
Identical.
dropshipping, and other similar discounts, as further defined under regulations
which the Postal Regulatory commission shall prescribe.”(See Sec. 206 below
for further language on workshare discounts.)

Would also empower PRC to require USPS to provide “summary data on the
Identical provision but also would empower PRC to demand such data on
costs, revenues, and quality of service” on experimental competitive products.
negotiated service agreements.
Would empower PRC to prescribe the form and content of all reports. Would
Identical except S. 662 would also require the information to be timely;
require PRC to take the following into consideration in crafting its reporting
prescriptions:
! providing the public with adequate information to assess the
Identical.
lawfulness of rates charged;
! avoiding inflicting unnecessary or unwarranted administrative
Identical.
effort and expense on USPS; and
! protecting the confidentiality of commercially sensitive
Identical.
information.
Would require the Postal Service to submit to PRC its comprehensive
Identical.
statement, performance plan, strategic plan, and program performance reports.
Would permit USPS to petition PRC to be permitted to not disclose publicly
Similar provision.
any information that falls within the exceptions to the Freedom of Information
Act as outlined at outlined in 5 U.S.C. 552(b).

CRS-14
H.R. 22
S. 662
Would require PRC to take comments of the public and interested parties on the
Similar provision, but would not require PRC to assess if market-dominant
various reports, statements, and plans submitted each year and would require
products met service standards. H.R. 22 would have USPS devise its own service
PRC to assess USPS compliance with laws and rules regarding rates and
standards for market-dominant products; S. 662 would have PRC design them
whether USPS performance goals and market-dominant product service
(see Title III below.)
standards were met. Would also empower PRC to require USPS to correct
noncompliant behavior.
Would provide for significant reforms in USPS financial reporting. Would
Identical provision at Sec. 103 (see above).
require USPS to file with the PRC reports containing the same information as
the quarterly Form 10-Q, annual Form 10-K, and periodic Form 8-K reports that
publicly-traded corporations must file with the Securities and Exchange
Commission. The Form 10-Q type reports required would have to include
information on the USPS’s financial obligations to retirees. USPS would be
required to obtain the opinion of an independent auditor on the information on
its reporting on these obligations. Would also require USPS to comply with the
financial reporting rules “prescribed by the Securities and Exchange
Commission implementing section 404 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7262; P.L. 107-204) beginning with fiscal year 2007 and in each fiscal
year thereafter.”
Sec. 205. Complaints; Appellate Review and Enforcement.
Sec. 205. Complaints; Appellate Review and Enforcement.
Would amend 39 U.S.C. 3662 and 3663 to permit “interested persons” to lodge
Identical except for clerical differences.
a complaint with the PRC should they believe USPS is not operating in
conformance with the requirements of Chapters 1, 4, 6 of 39 U.S.C. 36,
regarding rates, classifications, and products. The PRC would have to begin
proceedings on or dismiss such cases within 90 days of receipt thereof.
If the complaint is ruled justified, the PRC may require USPS to remedy the
Identical except for clerical differences.
effects of noncompliance. To this end, PRC is authorized to delay
implementation of rates or classifications and fine USPS. Any person

CRS-15
H.R. 22
S. 662
dissatisfied with a PRC decision (including USPS) may appeal adverse
decisions to the United States Court of Appeals for the District of Columbia.
Would allow PRC to suspend “implementation of rates or classifications ... for
Not included.
a limited period of time pending expedited proceedings under this section.”
Would empower PRC to impose fines for deliberate noncompliance with the
Identical.
requirements of this title.
Sec. 206. Workshare Discounts.
Identical provision at Sec. 201.
Would allow PRC to permit USPS to enter workshare agreements that give
greater discounts than costs avoided by the USPS under the following
conditions:
“(1) where the discount is associated with a new postal service, a change to an
existing product or service, or a new workshare initiative related to an existing
postal service;
“(2) to the extent that a reduction in the discount would lead to a loss of volume
in the affected category and reduce the aggregate contribution to institutional
costs of the Postal Service, from the mail matter subject to the discount, below
what it otherwise would have been if the discount had not been reduced to costs
avoided; would result in a further increase in the rates paid by mailers not able
to take advantage of the discount; or would impede the efficient operation of the
Postal Service;
“(3) where the amount of the discount above costs avoided is necessary to
mitigate rate shocks and will be phased out over time; or
“(4) where the workshare discount is provided in connection with subclasses of
mail consisting exclusively of mail matter of educational, cultural, scientific,
or informational value.”

CRS-16
H.R. 22
S. 662
Would require USPS to provide a report to PRC that explains reasons and
analyses supporting USPS decision to enter into any negotiated service
agreements.
Sec. 207. Clerical Amendment.
Sec. 207. Clerical Amendment.
Would amend heading and strike analysis for 39 U.S.C. 36, which presently sets
Identical provision except for clerical differences.
forth the Chapter 36 sections on “Postal Rate, Classes and Service,” which Title
II proposes to amend.
Not included.
Title III — Modern Service Standards
Not included. See Sec. 204 above for the brief H.R. 22 proposal for USPS-
Sec. 301. Establishment of Modern Service Standards.
crafted service standards.
Would amend 39 U.S.C. 36 to require PRC to establish modern service
standards for market-dominant products within 12 months of enactment of this
bill.
Would require the modern standards to be designed to achieve the following
objectives (provided they are consistent with USPS’s universal service
obligation):
! Enhance the value of the postal service to both senders and
recipients;
! Preserve regular and effective access to postal services in all
communities, including those in rural areas or where post
offices are not self-sustaining;
! Reasonably assure Postal Service customers delivery
reliability, speed, and frequency consistent with reasonable
rates and best business practices; and
! Provide a system of objective external performance

CRS-17
H.R. 22
S. 662
measurements for each market-dominant product as a basis
for measurement of Postal Service performance.
In establishing the standards to achieve the objectives, PRC is to take eight
factors into consideration:
! the actual service levels that customers receive from USPS;
! present customer satisfaction with USPS;
! the needs of customers, including those with physical
impairments;
! mail volume and revenues projected for future years;
! projected growth in addresses to be served;
! present and future costs of serving customers;
! the effect of technological innovation and demographics on
the efficient, reliable operation of the postal delivery system;
and
! the policies of this title as well as other factors PRC deems
appropriate.
Not included.
Sec 302. Postal Service Plan.
Would require the Postal Service, within 6 months of PRC’s establishment of
the above-mentioned service standards, to submit to Congress a plan for
achieving these standards. The plan is to include:
! a description of the Postal Service’s long-term vision for
rationalizing its infrastructure and workforce and how it
intends to implement that vision;
! information on the possible effects of these actions on the
work force;
! predicted costs and savings of proposed changes;

CRS-18
H.R. 22
S. 662
! efforts to expand postal retail operations through automation;
and
! a plan for re-employment assistance of displaced postal
workers and early retirement benefits.
Each year USPS would be required to provide a report “how postal decisions
have impacted or will impact rationalization plans.”
Finally, before being submitted to Congress, this report must be submitted to
the Inspector General of the U.S. Postal Service, who would prepare a report
detailing USPS compliance with the law and the new service standards. This
Inspector General report would be submitted with USPS report to Congress.
Title III — Provisions Relating to Fair Competition
Title IV — Provisions Relating to Fair Competition
Sec. 301. Postal Service Competitive Products Fund.
Sec. 401. Postal Service Competitive Products Fund.
Would amend 39 U.S.C. 20 to establish a Postal Service Competitive Products
Identical.
Fund, “which shall be available to the Postal Service ... for the payment of —
(1) costs attributable to competitive products; and
(2) all other costs incurred by the Postal Service, to the extent allocable to the
competitive products.” [This includes any competitive products judgments
against USPS.]
Deposits to the Competitive Product Fund would include:
Identical.
(1) revenues from competitive products;
(2) amounts received from obligations issued by the Postal Service;
(3) interest and dividends earned on investments of the Competitive Products
Fund; and
(4) any other receipts of the Postal Service (including from the sale of assets),
to the extent allocable to competitive products.

CRS-19
H.R. 22
S. 662
Should the funds be in excess of current needs, USPS would be permitted to
Identical.
invest those funds in obligations of, or guaranteed by, the U.S. Government or
in accordance with regulations issued by the Secretary of the Treasury not more
than 18 months after the enactment of this act.
USPS may deposit excess funds in a Federal Reserve bank or a depository for
Identical.
public funds with the approval of the Secretary of the Treasury.
USPS would be authorized to “borrow money and to issue and sell such
Identical.
obligations as it determines necessary to provide for competitive products and
deposit such amounts in the Competitive Products Fund.”
Would permit the federal government to purchase USPS issued debt and would
Identical.
provide USPS clear discretion over the denomination, time of issuance,
maturity dates, prices, and rates of USPS debt issued — the attempt being to
clarify to the market that USPS debt is USPS debt alone and not guaranteed by
the U.S. government.
Obligations would not be exempt from taxation by any state or locality nor
Identical.
would they be obligations of the Government of the United States. Except
during the first five years after the enactment of this act, USPS obligations
would not be permitted to be purchased, committed to purchase by, sold, or
issued to the Federal Financing Bank . H.R. 22 would have this five-year period
begin on the date that the Secretary of the Treasury submits his
recommendations regarding the accounting practices and principles that should
be followed by USPS.
Would require USPS to provide an annual report to the Secretary of the
Identical.
Treasury on the operation and condition of the Competitive Products Fund.
Would have the Secretary of the Treasury, in consultation with USPS, an
independent accounting firm, and such other advisers as the Secretary deems

CRS-20
H.R. 22
S. 662
appropriate, develop recommendations regarding:
“(A) the accounting practices and principles that should be followed
by the Postal Service with the objectives of identifying the capital
and operating costs incurred by the Postal Service in providing
competitive products, and preventing the cross-subsidization of such
products by market-dominant products; and “(B) the substantive and
procedural rules that should be followed in determining the Postal
Service’s assumed Federal income tax on competitive products
income for any year.
These proposals would then be submitted to PRC, which would accept
comments by USPS, the public, and interested parties, and then issue final
accounting rules for USPS.
Sec. 302. Assumed Federal Income Tax on Competitive Products Income.
Sec. 402. Assumed Federal Income Tax on Competitive Products Income.
Would define “assumed Federal income tax” to mean the net income tax that
Identical.
would be imposed by chapter 1 of the Internal Revenue Code of 1986 on the
Postal Service’s assumed taxable income from competitive products for the
year.”
Would require USPS to compute its assumed federal income tax each year and
transfer this amount to the Postal Service Fund.
Sec. 303. Unfair Competition Prohibited.
Sec. 403. Unfair Competition Prohibited.
Would amend 39 U.S.C. 4 by adding a provision that prohibits USPS from
Identical.
establishing “any rule or regulation” or “term of competition” unless USPS
demonstrates that the rule, regulation, or term “does not create an unfair
competitive advantage for itself or any federally funded entity” or “compel the
disclosure, transfer, or licensing of intellectual property to any third party.”

CRS-21
H.R. 22
S. 662
Would prohibit USPS from “obtain[ing] information from a person that
provides (or seeks to provide) any product, and then offer any product or service
S. 662 is worded nearly identically except that it refers to “any postal service”
that uses such information, without the consent of the person providing the
instead of “any product or service.”
information...”
PRC would prescribe regulations to carry out this section.
Identical.
Sec. 304. Suits By and Against the Postal Service.
Sec. 404. Suits By and Against the Postal Service.
Would amend 39 U.S.C. 409 to read “for the purposes of the provisions of law
Identical except that S. 662 also would declare USPS to the “extent that the Postal
cited in paragraphs (2)(A) and (2)(B), respectively, the Postal Service ... shall
Service engages in conduct with respect to the provision of competitive products,
be considered a ‘person’ ... and shall not be immune under any other doctrine
it shall be considered a person for the purposes of the Federal bankruptcy laws.”
of sovereign immunity from suit in Federal court by any person for any
violation of those provisions of the law by any officer or employee of the Postal
Service. Would further amend present law to declare USPS to be a ‘person’ for
purposes of the Clayton Act antitrust provisions and Federal Trade Commission
Act provisions on unfair methods of competition.
Also would require USPS, when building new buildings or altering existent
Identical but would also require USPS should to “the extent practicable, model
ones to comply with “one of the nationally recognized model building codes”
building codes should meet the voluntary consensus criteria established for codes
and to do so only after “considering all requirements of zoning laws, land use
and standards as required in the National Technology Transfer and Advancement
laws, and applicable environmental laws of a State or subdivision of a State...”
Act of 1995 as defined in Office of Management and Budget Circular A1190. For
purposes of life safety, the Postal Service shall continue to comply with the most
current edition of the Life Safety Code of the National Fire Protection Association
(NFPA 101).”
Present law would be further amended to deny USPS legal representation by the
Identical.
Department of Justice in some instances.

CRS-22
H.R. 22
S. 662
Sec. 305. International Postal Arrangements.
Sec. 405. International Postal Arrangements.
Would declare United States policy to be to:
Identical except as below noted.
! “promote and encourage communications between peoples by
efficient operation of international postal services and other
international delivery services for cultural, social, and
economic purposes;
! “promote and encourage unrestricted and undistorted
competition in the provision of international postal services
and other international delivery services...;
! “to promote and encourage a clear distinction between
! Would not include “and other international delivery services by
governmental and operational responsibilities with respect to
the Government of the United States and by intergovernmental
the provision of international postal services and other
organizations of which the United States is a member.”
international delivery services by the Government of the
United States and by intergovernmental organizations of
which the United States is a member; and
! “to participate in multilateral and bilateral agreements with
! Not included.
other countries to accomplish these objectives.”
Would amend 39 U.S.C. 407 to give the Secretary of State responsibility for the
Identical except that S. 662 does not empower the Secretary of State with
“formulation, coordination, and oversight of foreign policy related to
oversight of operations of “other international delivery services.”
international postal services and other international delivery services, and shall
have the power to conclude treaties, conventions and amendments related to
international postal services and other international delivery services...”.
Would require the Secretary of State to “maintain continuing liaison with the
Would require the Secretary of State to “maintain continuing liaison with the
Committee on Government Reform of the House of Representatives and the
Committee on Homeland Security and Governmental Affairs of the Senate and
Committee on Governmental Affairs of the Senate.”
the Committee on Government Reform of the House of Representatives.”
Would require the Secretary of State to request a PRC decision before
Identical.
concluding any treaty, convention, or amendment affecting international

CRS-23
H.R. 22
S. 662
postage rates or classifications.
Would require the Secretary of State to ensure that each treaty, convention, or
Similar but would not permit modification of PRC decision by Secretary of State.
amendment ... is consistent with PRC decisions “except if, or to the extent, the
Secretary determines, by written order, that considerations of foreign policy or
national security require modification of the Commission’s decision.”
Would define a private company as a company that is “substantially owned or
Not included.
controlled by persons who are citizens of the United States.”
Would require the “Bureau of Customs and Border Protection of the
Similar provision but refers to “the Customs Service” instead of the “Bureau of
Department of Homeland Security and other appropriate Federal agencies shall
Customs and Border Protection of the Department of Homeland Security.”
apply the customs laws of the United States and all other laws relating to the
importation or exportation of such shipments in the same manner to both
shipments by the Postal Service and similar shipments by private companies.”
Sec. 306. Redesignation.
Not included.
39 U.S.C. 36 would be amended to include “ Subchapter VI — General.”
Title IV — General Provisions
Title V — General Provisions
Sec. 401. Qualification Requirements for Governors.
Sec. 501. Qualification Requirements for Governors.
Would amend 39 U.S.C. 202(a) to require that at least four of the Governors of
Similar provision but would not stipulate that “at least four of the Governors” be
USPS be selected solely on the basis of their demonstrated ability in managing
selected based on their experience managing entities of a “substantial size.”
organizations or corporations of “substantial size” (defined as possessing
Would not define “substantial size.” Would also require that “[e]xperience in the
50,000 or more employees). Governors may “not be representatives of specific
fields of law and accounting shall be considered in making appointments of
interests using the Postal Service” and may be removed only for cause.
Governors.”
Further amends 39 U.S.C. 202(a) to require the President to consult with the
Identical.

CRS-24
H.R. 22
S. 662
Speaker of the House of Representatives, the minority leader of the House of
Representatives, the majority leader of the Senate, and the minority leader of
the Senate regarding nominees for open Governor seats.
Would require that the passage of this act not “affect the appointment or tenure
Identical.
of any person serving as a Governor of the United States Postal Service under
an appointment made before the date of enactment of this Act.”
Would limit governors to three terms.
Identical.
Not included.
Would reduce terms of governors from 9 to 5 years and procedures for
replacement of sitting governors with 9-year terms in the event of death or
removal for cause.
Would require that an early vacancy on the Board of Governors be filled by a
Not included.
person nominated with the concurrence of the major postal labor unions.
Sec. 402. Obligations.
Sec. 502. Obligations.
Would amend 39 U.S.C. 2005 to limit USPS new obligations for capital
Not included.
improvements and defraying operating expenses to $3 billion per annum.
Forbids pledging assets related to the provisions of competitive products.
Identical.
Sec. 403. Private Carriage of Letters.
Sec. 503. Private Carriage of Letters.
Would amend 39 U.S.C. 601 to lessen the restrictions on private carriage of
Identical.
letters if:
! the amount paid for private carriage is equal to at least 6 times
the rate then currently charged for the 1st ounce of a single-
piece first class letter;

CRS-25
H.R. 22
S. 662
! the letter weighs at least 12 ½ ounces; or
! such carriage is within the scope of services described by
regulations of the United States Postal Service (as in effect on
July 1, 2004) that purport to permit private carriage by
suspension of this section (as then in effect).
PRC would be empowered craft any regulations necessary to carry out this
section.
Sec. 404. Rulemaking Authority.
Sec. 504. Rulemaking Authority.
Would modify USPS’s rulemaking authority under 39 U.S.C. 401 to include the
Identical.
power “to adopt, amend, and repeal such rules and regulations, not inconsistent
with this title, as may be necessary in the execution of its functions under this
title and such other functions as may be assigned to the Postal Service under
any provisions of law outside this title.”
Sec. 405. Noninterference With Collective Bargaining Agreements.
Sec. 405. Noninterference With Collective Bargaining Agreements.
Would declare that present employee and labor organization privileges, rights,
Similar declaration made although S. 662 would amend 39 U.S.C. 1207 regarding
and benefits under 39 U.S.C. 12 are not restricted or expanded, except as
labor disputes.
provided in Sec. 407 below.
Would continue free mailing privileges afforded to postal unions.
Identical provision.
Identical provision at H.R. 22 Sec. 407 (see below).
Would change the collective bargaining arbitration process (details below at H.R.
22 Sec. 407).

CRS-26
H.R. 22
S. 662
Sec. 406. Bonus and Compensation Authority.
Sec. 506. Bonus Authority.
Would amend 39 U.S.C. 36 to permit USPS to create one or more programs to
Identical.
provide employee bonuses or other rewards.
Would limit annual executive compensation with bonuses to no more than the
Identical.
“total annual compensation” of the Vice President of the United States
($208,100 in 2005).
Would require any bonus program to be approved by the USPS Board of
Identical.
Governors, which also would be empowered to revoke or suspend the Postal
Service’s bonus-granting authority under any program if should find that the
bonus program is fails to based on relative performances among employees.
Would require USPS to report any bonuses or rewards given in its annual
Not included.
comprehensive statement, including the names of persons receiving a bonus, the
amount of these bonuses, and the amount by which these bonuses exceeded
employees’ permissible compensation.
Would permit the exemption of 12 employees from compensation limits
Not included.
described above. Instead, these 12 may receive annual compensation up to
120% of the annual compensation of the Vice President of the United States
($249,720 in 2005).
Sec. 407. Mediation in Collective-Bargaining Disputes.
Identical provision found at Sec. 405.
Would amend 39 U.S.C. 1207(b) to require that in the event of a labor dispute
the Director of the Federal Mediation and Conciliation Service “shall within 10
days appoint a mediator of nationwide reputation and professional standing ...
who is also a member of the National Academy of Arbitrators” instead of a
factfinding panel.

CRS-27
H.R. 22
S. 662
Would amend 39 U.S.C. 1207(c) to reduce from 90 to 60 days the period after
the expiration of a bargaining agreement that may pass before the parties would
be required to go through arbitration.
Would amend 39 U.S.C. 1207(d) to require the appointment of a mediator
instead of a fact-finding panel when a bargaining units is without an agreement
with USPS.
Thus, the labor dispute resolution process would include the following steps:
1. A bargaining unit with an agreement with the USPS that desires modification
or termination of an agreement must serve notice to that effect to the other party
no less than 90 days before the expiration of the agreement;
2. Within 45 days of providing notice, the party serving notice must notify the
Director of the Federal Mediation and Conciliation Service (FMCS);
3. If parties fail to resolve their differences (or provide for a process for
resolving their differences) before the expiration of the agreement, then the
Director of FMCS must appoint a mediator within 10 days. Both parties must
work with the mediator and negotiate in good faith;
4. If no resolution has been reached 60 days after the appointment of the
mediator, then a 3-person arbitration board must be appointed. Each disputant
chooses one member and the two members chosen choose the third member.
The arbitration board is to give both sides a full and fair hearing and render a
decision within 45 days of its appointment. If either party fails to select a
member or the two parties disagree on the third member, then a list of nine
arbitrators will be provided and the parties must agree to select from it. It is
unclear what would happen if the parties failed to do this. Under current law,
the Director would have the power to select members.

CRS-28
H.R. 22
S. 662
A similar procedure is created for bargaining units whose recognized bargaining
representative does not have an agreement with the USPS.
Title V — Enhanced Regulatory Commission
Title VI — Enhanced Regulatory Commission
Sec. 501. Reorganization and Modification of Certain Provisions Relating
Sec. 601. Reorganization and Modification of Certain Provisions Relating to
to the Postal Regulatory Commission.
the Postal Regulatory Commission.
Would amend 39 U.S.C. to include a chapter 5 which replaces the Postal Rate
Similar provisions but also would require that “[n]o Commissioner shall be
Commission with the new Postal Regulatory Commission (PRC). PRC would
financially interested in any enterprise in the private sector of the economy
have five commissioners, appointed by the President with the advice and
engaged in the delivery of mail matter.”
consent of the Senate. Commissioners are to be chosen solely on the basis of
their “technical qualifications, professional standing, and demonstrated
expertise in economics, accounting, law, or public administration, and may be
removed by the President only for cause.” Not more than three members may
be adherents of the same political party; commissioners are to serve six year
terms.
Identical provision at H.R. 22 Sec. 505.
S. 662 also would require PRC to “designate an officer of the Postal Regulatory
Commission in all public proceedings who shall represent the interests of the
general public.”
Sec. 502. Authority for Postal Regulatory Commission to Issue Subpoenas.
Sec. 602. Authority for Postal Regulatory Commission to Issue Subpoenas.
Would empower “the Chairman of the Commission, any Commissioner
Similar provision but would require PRC to “balance the nature and extent of the
designated by the Chairman, and any administrative law judge appointed by the
likely commercial injury to the Postal Service against the public interest in
Commission” to issue subpoenas (provided a majority of PRC concurs). Any
maintaining the financial transparency of a government establishment competing
person failing to obey a subpoena may be punished for contempt of court by the
in commercial markets” in making its decisions regarding public nondisclosure
district court of the U.S. in the district in which the person subpoenaed resides
of USPS documents..
or is served. In cases involving documents exempt from public disclosure,

CRS-29
H.R. 22
S. 662
USPS may respond to the subpoena with written notification that explains the
reasons for withholding documents. PRC would be empowered to render final
decision over the public disclosure or nondisclosure of such documents.
Sec. 503. Appropriations for the Postal Regulatory Commission.
Sec. 603. Appropriations for the Postal Regulatory Commission.
Would amend 39 U.S.C. 504(d) to authorize appropriations for PRC out of the
Identical.
Postal Service Fund. Each fiscal year, PRC would be required to submit a
budget of expenses to Congress in order to receive an appropriation.
Sec. 504. Redesignation of the Postal Rate Commission.
Sec. 604. Redesignation of the Postal Rate Commission.
Would replace the words “Postal Rate Commission” with “Postal Regulatory
Identical.
Commission” in Titles 39, 5, and 44 of U.S.C.
Sec. 505. Officer of the Postal Regulatory Commission Representing the
Identical provision at Sec. 601 above.
General Public.
Would require PRC to designate “an officer of the Postal Regulatory
Commission in all public proceedings (such as developing rules, regulations,
and procedures) who shall represent the interests of the general public.”
Title VI — Inspectors General
Not included
Sec. 601. Inspector General of the Postal Regulatory Commission.
Not included.
Would amend the Inspector General Act of 1978 (5 U.S.C. Appendix) and 39
U.S.C. 504 to establish the Office of Inspector General (OIG) of the Postal

CRS-30
H.R. 22
S. 662
Regulatory Commission. The first PRC Inspector General is to be appointed
no later than 180 days from enactment of this act. H.R. 22 would not enumerate
additional duties of the PRC IG beyond those carried in present law.

Sec. 602. Inspector General of the United States Postal Service to be
Not included.
Appointed by the President.
Would amend the Inspector General Act of 1978 (5 U.S.C. Appendix) to require
presidential appointment of the Inspector General of the U.S. Postal Service.
Sec. 602 would also make it the responsibility of the USPS IG to audit or
contract to audit the financial statements of USPS. Appropriations for the
Office of the Inspector General would be available beginning October 1, 2005.
Sec. 605. Financial Transparency.
Equivalent provision at H.R. 22, Sec. 103.
Title VII — Evaluations
Title VII — Evaluations
Sec. 701. Universal Postal Service Study.
Sec. 702. Universal Postal Service Study and the Postal Monopoly.
Would require the Postal Service to submit to Congress, the President, and
Similar provision but PRC would be charged with preparing the report and would
PRC, a written report on universal postal service (within 12 months of
also need to provide an assessment of the postal monopoly and provide any
enactment of this act). The report must include a history of universal service
proposed changes to either universal service or the monopoly.
and how it has evolved, USPS recommendations on universal service, along
with descriptions of the scope and standards of universal service under present
law; any geographic areas, populations, communities, organizations, or other
groups not covered by universal service at present; and the scope and standards
of universal service likely to be required in the future. Would further require
PRC to prepare an analysis of the USPS report on universal service, including
estimates of the costs of providing universal service under present and prior

CRS-31
H.R. 22
S. 662
law, and send it to the President within 12 months. In preparing these reports,
both USPS and PRC are obliged to consult with governmental and
nongovernmental stakeholders.
Sec. 702. Assessments of Ratemaking, Classification, and Other Provisions.
Sec. 701. Assessments of Ratemaking, Classification, and Other Provisions.
Would require PRC to provide, at least every 5 years, a report to the President
Similar provision but would not include the requirement that the report provide
and Congress concerning the operation of this act’s amendments to the law and
information on cost coverage on competitive products or on the Competitive
any recommendations to improve the efficiency of the postal laws. USPS, after
Products Fund. (Note: H.R. 22, Sec. 301 and S. 662, Sec. 401 both would require
considering this report, would be required to submit its comments, which would
USPS to prepare annual studies of the Competitive Products Fund for submission
be attached to this report. The report would be required to include specific
to the Secretary of the Treasury.)
information on “cost-coverage relating to competitive products collectively”
and the operations of the Competitive Products Fund and the assumed federal
income tax thereon.
Sec. 703. Study on Equal Application of the Laws to Competitive Products.
Sec. 703. Study on Equal Application of the Laws to Competitive Products.
Within one year of the enactment of this act, the Federal Trade Commission
Similar provision but would require a study “identifying Federal and State laws
(FTC) would be required to prepare and submit to the President, Congress, and
that apply differently to the United States Postal Service with respect to the
PRC a report that “identifying Federal and State laws that apply differently to
competitive category of mail ... and similar products provided by private
the United States Postal Service with respect to the competitive category of mail
companies.”
... and private companies providing similar products.”
The study should include appropriate recommendations for bringing “such legal
Similar provisions but uses the phrase “such legal discrimination.”
differences” to an end.
In preparing the report, the FTC shall consult with governmental and
Identical.
nongovernmental stakeholders.
PRC is to take into account the recommendations of the study and “subsequent
Would not require PRC to take into account “subsequent events that affect the
events that affect the continuing validity of the estimate of the net economic
continuing validity of the estimate of the net economic effect.”

CRS-32
H.R. 22
S. 662
effect ... in promulgating or revising the regulations” required by 39 U.S.C.
3633.
Sec. 704. Greater Diversity in Postal Service Executive and Administrative
Not included.
Schedule Management Positions.
Would require the BOG to “study and, within 1 year after the date of the
enactment of this act, submit to the President and Congress a report concerning
the extent to which women and minorities are represented in supervisory and
management positions within the United States Postal Service.” Would require
data included in the report to be “presented in the aggregate and by pay level.”
Also would require USPS to “take such measures as may be necessary to ensure
that, for purposes of conducting performance appraisals of supervisory or
managerial employees, appropriate consideration shall be given to meeting
affirmative action goals, achieving equal employment opportunity
requirements, and implementation of plans designed to achieve greater diversity
in the workforce.”
Sec. 705. Plan for Assisting Displaced Workers.
Included at Sec. 302 above.
Would require USPS within one year to prepare and submit to Congress and the
Board of Governors a report and a plan on assisting workers displaced as a
result of automation or privatization of postal functions.
Sec. 706. Contracts with Women, Minorities, and Small Businesses.
Not included.
Would require BOG to “study and, within 1 year after the date of the enactment
of this Act, submit to the President and Congress a report concerning the
number and value of contracts and subcontracts the Postal Service has entered
into with women, minorities, and small businesses.”

CRS-33
H.R. 22
S. 662
Sec. 707. Rates for Periodicals.
Not included.
USPS and PRC would be required to collaborate on a study concerning “the
quality, accuracy, and completeness of the information used by the Postal
Service in determining the direct and indirect postal costs attributable to
periodicals ... and any opportunities that might exist for improving” efficiencies
in the collection, handling, transportation, or delivery of periodicals by the
Postal Service: including any pricing incentives for mailers that might be
appropriate. Would require copies of the study to be submitted to the President
and Congress.

Sec. 708. Assessment of Certain Rate Deficiencies.
Not included.
Would direct the OIG of USPS, within 12 months of enactment of this act, to
submit to the President, Congress, and USPS a study concerning the
administration of 39 U.S.C. 3626(k), often referred to as the “cooperative
mailing provision.” This section of the law, and 39 U.S.C. 3626 generally,
permit certain types of mail materials sent by nonprofit groups and
organizations to qualify for reduced postal rates. The study is to specifically
address “the adequacy and fairness of the process by which assessments under
39 U.S.C. 3626(k) are determined and appealable” and to consider whether PRC
or some other body ought to be assigned a role in this administrative process.
The study should further consider “whether a statute of limitations should be
established for the commencement of proceedings by the Postal Service
thereunder.” For further language on nonprofit mailing rates, see Sec.808
below.
Sec. 709. Network Optimization.
Not included. Sec. 302 above, which describes “modern service standards,”
would require USPS to develop a plan that includes a description of “the
Would require USPS to submit to PRC, Congress, and the Board of Governors
long-term vision of the Postal Service for rationalizing its infrastructure and
a written report on the postal processing and distribution network. The report
workforce.”
should provide account of efforts taken to improve mail processing,

CRS-34
H.R. 22
S. 662
transportation, and distribution network and actions taken to identify excess
capacity. The report should also identify any statutory or regulatory obstacles
to facility realignment or consolidation. USPS would be required to treat
optimization as a Government Performance and Results Act (31 U.S.C. 1115
note) performance goal.
Sec. 710. Assessment of Future Business Model of the Postal Service.
Not included.
Would empower Comptroller General to appoint an independent research
organization to prepare a report assessing the best business model for promoting
‘an efficient, reliable, innovative, and viable Postal Service.” Would require the
report to consider the costs, benefits, and feasible options associated with
maintaining USPS in its current form and transforming it into a corporation
owned by the government. Would require the report to be submitted to
Congress and the President within 27 months of enactment of this act.
Sec. 711. Study on Certain Proposed Amendments.
Not included. However, Sec. 1002 would permit USPS greater flexibility to
contract with foreign air carriers than present law permits (see below).
Would require the Government Accountability Office to prepare a report on the
costs and benefits of increasing USPS’s discretion to permit foreign air carriers
to transport mail.
Sec. 712. Definition.
Not included.
Would clarify that for purposes of this title, the term “Board of Governors” has
the meaning given such term by 29 U.S.C. 102.

CRS-35
H.R. 22
S. 662
Not included.
Sec. 704. Report on Postal Workplace Safety and Workplace-Related
Injuries

Would require the IG of USPS to submit a report to Congress and the Postal
Service — no later than six months after enactment of this bill — that would:
! discuss any injury reduction goals established by the Postal
Service;
! describe the actions that the Postal Service has taken to improve
workplace safety and reduce workplace-related injuries;
! assess how successful the Postal Service has been in meeting its
injury reduction goal and,
! identify opportunities for making further progress in meeting
these goals.
Would require USPS to submit a report to Congress — not later than 6 months
after receiving the USPS IG report — that details how USPS plans to improve
workplace safety and reduce workplace-related injuries nationwide, including
goals and metrics. These plans should be “developed in consultation with the
Inspector General and employee representatives, including representatives of each
postal labor union and management association...”
Not included.
Sec. 705. Study on Recycled Paper.
Would require the Government Accountability Office (GAO) to study and submit
to the Congress, the Board of Governors of the Postal Service, and to the Postal
Regulatory Commission a report concerning —
! the economic and environmental efficacy of establishing rate
incentives for mailers linked to the use of recycled paper;
! a description of the accomplishments of the Postal Service in
each of the preceding five years involving recycling activities...;
and
! additional opportunities that may be available for the United

CRS-36
H.R. 22
S. 662
States Postal Service to engage in recycling initiatives and the
projected costs and revenues of undertaking such opportunities.
Would also require the report to include recommendations for any administrative
or legislative actions that may be appropriate.
Title VIII — Miscellaneous, Technical and Conforming Amendments
Somewhat similar title at Title X (see below)
Sec. 801. Employment of Postal Police Officers.
Similar provision at Sec. 1001 with exception noted here.
Would amend 39 U.S.C. 404 to permit USPS to “employ police officers for
Would amend 39 U.S.C. 404 to permit USPS to “employ guards for all buildings
duty in connection with the protection of property owned or occupied by the
and areas owned or occupied by the Postal Service or under the charge and control
Postal Service or under the charge and control of the Postal Service.” Sec. 801
of the Postal Service, and may give such guards, with respect to such property,
also details the powers and functions of the police officers.
any of the powers of special policemen” provided under 40 U.S.C. 1315.
Sec. 802. Date of Postmark to be Treated as the Date of Appeal in
Not included.
Connection with the Closing or Consolidation of Post Offices.
Would amend 39 U.S.C. 404(b) so that any appeals to the closure of post offices
mailed or otherwise delivered would be considered received based upon the
postmark date or, if delivered by other means, by paperwork indicating the date
contracted for delivery. This would be effective 3 months after enactment of
this act.
Sec. 803. Provisions Relating to Benefits Under Chapter 81 of title 5,
Not included.
United States Code, for Officers and Employees of the Former Post Office
Department.

Would amend 39 U.S.C. 1001 note so that USPS would have the same

CRS-37
H.R. 22
S. 662
“authorities and responsibilities” with respect to any individual receiving
benefits under the former Post Office Department as it has to any officer or
employee of USPS receiving such benefits.
Sec. 804. Obsolete Provisions.
Not included.
Would repeal 39 U.S.C. 52 on the transportation of mail by a surface carrier.
Would amend 39 U.S.C. 5005(b)(1), 5402(d), and 5605 to eliminate restrictions
on lengths of contracts.
Sec. 805. Investments.
Not included.

Would amend 39 U.S.C. 2003(c) to prohibit USPS from investing monies from
the Postal Fund in any obligations or securities of a commercial entity.
Sec. 806. Reduced Rates.
Not included.
Would require USPS to permit a publication with a total paid circulation of less
than 5000 to be treated, for the purpose of postal rates, as in-county mail even
when issues of said publication are mailed to locations outside of the county in
which it is produced.
Sec. 807. Hazardous Matter.
Not included.
Would amend 36 U.S.C. 3001 to empower the Secretary of Transportation to
define hazardous materials and to enumerate the prohibitions against the
mailing of hazardous materials and provide criminal and civil penalties for
violation of these prohibitions.

CRS-38
H.R. 22
S. 662
Sec. 808. Provisions Relating to Cooperative Mailings.
Not included.
Requires USPS to examine section E670.5.3 of the Domestic Mail Manual to
determine whether it contains adequate safeguards against the abuse of rates for
nonprofit mail and the deception of customers.
Sec. 809. Technical and Conforming Amendments.
Not included.
Would amend 39 U.S.C. 3681 so that USPS may “establish size and weight
limitations for mail matter in the market-dominant category of mail consistent
with regulations the Postal Regulatory Commission may prescribe under section
3622. The Postal Service may establish size and weight limitations for mail
matter in the competitive category of mail consistent with its authority under
section 3632.”
In addition to conforming amendments regarding revenue forgone and
appropriations and reporting requirements, the act would amend 39 U.S.C. 404
to allow the Board of Governors to establish “reasonable and equitable” classes
of mail and rates of postage. The act also would require USPS to maintain one
or more classes of mail for transmission of letters that would be sealed against
inspection.
Title IX — Postal Pension Funding Reform Amendments
Title VIII — Postal Service Retirement and Health Benefit Funding
Sec. 901. Civil Service Retirement System.
Identical provision at Sec. 802 except for clerical differences.
Would amend 5 U.S.C. 83 to alter USPS’s contributions to the Civil Service
Retirement System (CSRS).
Would shift responsibility for pension payments related to employee military
service to the Department of the Treasury.

CRS-39
H.R. 22
S. 662
Would require an annual determination of USPS pension payment surplus or
supplemental liability by the Office of Personnel Management. Any USPS
surplus would be transferred into the Postal Service Retiree Health Benefits
Fund, which would pre-fund retiree health benefits. H.R. 22 would require the
creation of amortization schedule should a supplemental liability be found.
Would permit the cancellation of any existent supplemental liability
amortization schedule “to the extent of any amounts first coming due after the
close of the fiscal year to which such determination relates” if OPM should find
no CSRS liability.
Would require that any determination or redetermination made by OPM under
Not included.
this section shall, upon request of the United States Postal Service, be subject
to review by PRC, which shall submit a report containing the results of its
review to USPS, OPM, and Congress. OPM then would reconsider its
determination or redetermination in light of such report, and make any
appropriate adjustments.
Sec. 902. Health Insurance.
Similar provision at Sec. 803 except for differences noted here.
Would establish the Postal Service Retiree Health Benefits Fund, which would
Identical.
be administered by the Office of Personnel Management (OPM).
Would require USPS to begin paying into the fund by September 30, 2006.
Identical.
Each year, USPS would be required to pay into the Retiree Health Benefits
Each year, USPS would be required to pay into the Retiree Health Benefits Fund:
Fund:
(A) the portion of the net present value for current and future USPS annuitants
(A) the net present value of the future payments that is attributable to the current
that is attributable to the current year’s service of Postal Service employees;
year’s service of Postal Service employees; and
(B) interest on the net present value for that fiscal year at the interest rate used
(B) an annual installment computed as the difference between the net present
to compute that net present value.
value of the excess of future payments for current and future Postal Service
annuitants; and the value of the assets of the Postal Service Retiree Health
Benefits Fund and the net present value of the future payments that is attributable

CRS-40
H.R. 22
S. 662
to the current year’s service of Postal Service employees (This amount is to be
amortized.)
Would allow the USPS contribution to the Postal Service Retiree Health
Identical.
Benefits Fund in 2006 to be reduced by any USPS contributions attributable to
FY2006.
Would require that any computation or regulation by OPM “under this
Not included.
subsection shall, upon request of the Postal Service, be subject to review by the
Postal Regulatory Commission. The Commission shall submit a report
containing the results of any such review to the Postal Service, the Office of
Personnel Management, and the Congress .... Upon receiving the report of the
Postal Regulatory Commission, the Office of Personnel Management shall
reconsider its computation or other determination in light of such report, and
shall make any appropriate adjustments. The Office shall submit a report
containing the results of its reconsideration to the Commission, the Postal
Service, and the Congress.”
Sec. 903. Repealed.
Identical provision at Sec. 804.
Would repeal Sec. 3 of P.L. 108-18, which required that savings resulting from
the Postal Civil Service Retirement System Funding Reform Act of 2003 be
used to reduce the debt of the Postal Service (in 2003 and 2004) and thereafter
placed in escrow.
Sec. 904. Ensuring Appropriate Use of Escrow and Military Savings.
Not included.
Would define the “total savings” from Sec. 901’s transferral of responsibility
for pension payments related to miliary service by postal employees. Sec. 904
would require OPM to calculate the per annum total savings each year (2006-
2015). If the amount USPS has paid into the Postal Service Retiree Health
Benefits Fund that year is equal to or greater than two-thirds of the total savings

CRS-41
H.R. 22
S. 662
for that year, USPS need take no further action; if the payments are less than
two-thirds, USPS must pay into the Postal Service Retiree Health Benefits Fund
an amount equal to the difference. The Postal Service could avoid paying the
difference only in the instance of a fiscal year underpayment being negated by
an aggregate overpayment over previous fiscal years (beginning 2006). OPM
would be required to report its calculations of total savings to USPS, PRC, and
Congress.
Sec. 905. Effective Dates.
Identical provision at Sec. 805.
Makes the changes of this title effective October 1, 2005 and requires changes
to government contributions to the civil service retirement system begin on the
first day of the first pay period of October 1, 2005.
Not included
Title IX — Compensation for Work Injuries
Not included.
Sec. 901. Temporary Disability; Continuation of Pay.
Senate bill would also amend 5 U.S.C. 8117 so that a USPS employee would not
be entitled to compensation or continuation of pay for the first three days of
temporary disability. During this time, a USPS employee would be permitted to
use annual leave, sick leave, or leave without pay.
Not included.
Sec. 902. Disability Retirement for Postal Employees.
In order to reduce Postal Service expenses, this provision would encourage Postal
Service employees of retirement age who are injured on the job to retire rather
than to draw disability compensation. To this end, it would amend 5 U.S.C. 8105
and 8106 to reduce compensation for work injuries for a postal worker whose
injuries occur after enactment of S. 662. If enacted —

CRS-42
H.R. 22
S. 662
An employee suffering total disability from a workplace injury would be entitled
to compensation of 50 percent (currently 66 2/3 percent) of his monthly pay on
the later date of:
(1) the date on which the injured worker reaches retirement; or
(2) one year after the employee begins receiving compensation.
An employee suffering partial disability would be entitled to 50 percent (currently
66 2/3 percent) of the difference between his monthly pay and his monthly wage
earning capacity after the beginning of his partial disability on the later date of:
(1) the date on which the injured employee reaches retirement age; or
(2) one year after the employee begins receiving compensation.
Not included
Title X — Miscellaneous
See Sec. 801 above.
Sec. 1001. Employment of Postal Police Officers.
Similar provision in H.R. 22 Sec. 801.
See Sec. 711 above.
Sec. 1002. Expanded Contracting Authority.
Would permit USPS to “contract with any air carrier for the transportation of mail
by aircraft in interstate air transportation, including the rates for that
transportation, either through negotiations or competitive bidding.”
Would further provide that “[six] years after the date of enactment of the Postal
Accountability and Enhancement Act, every contract that the Postal Service
awards to a foreign air carrier under this paragraph shall be subject to the
continuing requirement that air carriers shall be afforded the same opportunity to
carry the mail of the country to and from which the mail is transported and the
flag country of the foreign air carrier, if different, as the Postal Service has
afforded the foreign air carrier.”

CRS-43
H.R. 22
S. 662
Not included.
Sec. 1003. Report on the United States Postal Inspection Service and the
Office of the Inspector General of the United States Postal Service.

Would require the GAO to “review the functions, responsibilities, and areas of
possible duplication of the United States Postal Inspection Service and the Office
of the Inspector General of the United States Postal Service and submit a report
on the review to the Committee on Homeland Security and Governmental Affairs
of the Senate.” The report should include legislative recommendations.
Not included.
Sec. 1004. Sense of Congress Regarding Postal Service Purchasing Reform.
Would declare that “the Postal Service should —
“(1) ensure the fair and consistent treatment of suppliers and contractors in its
current purchasing policies...; and
“(2) implement commercial best practices in Postal Service purchasing policies
to achieve greater efficiency and cost savings as recommended in July 2003 by
the President’s Commission on the United States Postal Service.”