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
Updated August 4, 2005
Kevin R. Kosar
Analyst in American National Government
Government and Finance Division
Congressional Research Service ˜ The Library of Congress

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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. Thereafter, H.R. 22 was
referred to the House Committee on the Judiciary on April 28, discharged therefrom
May 27, and placed on Union Calendar No. 55 that same day. The House passed
H.R. 22 on July 26, 2005, by a vote of 420 to 10 and it was placed on the Senate
Legislative Calendar (Calendar No. 176). S. 662 was introduced into the Senate on
March 17, 2005, and referred to the Committee on Homeland Security and
Governmental Affairs. On June 22, S. 662 was amended and reported by a vote of
15-1.
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”; and
— the governance of the Postal Service.
This report will be updated to reflect significant legislative developments.

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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 . . . . . . . . . . . . . . . . . . 22
Title IV — General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Title V — Enhanced Regulatory Commission . . . . . . . . . . . . . . . . . . . . . . 35
Title VI — Inspectors General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Title VII — Evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Title VIII — Miscellaneous, Technical and Conforming Amendments . . . 44
Title IX — Postal Pension Funding Reform Amendments . . . . . . . . . . . . . 47

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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. Both bills were sponsored by the
chairpersons and ranking minority members of the committees of jurisdiction. 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. Thereafter,
H.R. 22 was referred to the House Committee on the Judiciary on April 28,
discharged therefrom May 27, and placed on Union Calendar No. 55 that same day.
S. 662 was introduced into the Senate on March 17, 2005, and referred to the
Committee on Homeland Security and Governmental Affairs. On June 22, S. 662
was amended and reported by a vote of 15-1. (This report draws upon the manager’s
amendment version of S. 662; the bill as reported was unavailable at the time of
publication of this report.)
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
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.

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CRS-2
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
“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 201, would include single piece first-class
letters and cards while S. 662, Section 201, would include first-class letters and
cards. S. 662 would include sealed parcels and single piece parcel post; H.R. 22
would not. 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 under “extraordinary” circumstances and allow USPS to raise rates for a
2 On pension and escrow issues, see CRS Report RL32346, Pension Issues Cloud Postal
Reform Debate, by Nye Stevens.

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CRS-3
class or service above the CPI by the amount that rate increases in the previous year
were less than the CPI. (This provision was added June 22, 2005.) 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 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 USPS and PRC to establish service standards designed to achieve four
objectives (provided they are consistent with USPS’s universal service obligation):
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
sess., Apr. 14, 2005, available at [http://hsgac.senate.gov/_files/PMGTESTIMONY
FINAL412.pdf], pp. 15-17.

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CRS-4
! 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.
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.
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, Section 401, would define the
term “substantial size” to mean 50,000; S. 662, Section 501, would not define this
term. S. 662 would reduce the term of a governor from nine to five years; H.R. 22
would not. 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 — as amended June 22, 2005 — 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.

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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.
Would amend 39 U.S.C. 102 to define the following
Sec. 101.
Identical.
Definitions.
terms: product, rates, market-dominant product,
Definitions.
competitive product, consumer price index, and year.
Would amend 39 U.S.C. 10 to define “postal service” as
Would define “postal service” as “the physical delivery
“the carriage of letters, printed matter, or mailable
of letters, printed matter, or packages weighing up to 70
packages, including acceptance, processing, delivery, or
pounds, including physical acceptance, collection,
other services supportive or ancillary thereto.”
sorting, transportation, or other functions ancillary
thereto.”
Would define “consumer price index” to mean the
Equivalent provision at Sec. 201 (see below).
“monthly Consumer Price Index for All Urban
Consumers.”
Sec. 102. Postal
Would provide that “[n]othing in this title shall be
Sec. 102. Postal
Would provide that “[e]xcept as provided in section
Services.
considered to permit or require that the Postal Service
Services.
411, nothing in this title shall be considered to permit
provide any special nonpostal or similar services, except
or require that the Postal Service provide any special
that nothing in this subsection shall prevent the Postal
nonpostal or similar services.”
Service from providing any special nonpostal or similar
services provided by the Postal Service as of January 4,
2005.”
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.

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CRS-6
H.R. 22
S. 662
Sec. 103.
Would amend 39 U.S.C. 101 and 39 U.S.C. 5001 to
Equivalent provision at Sec. 605.
Financial Trans-
require the USPS to “be subject to a high degree of
parency.
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.”
Title II — Modern Rate Regulation
Title II — Modern Rate Regulation
Sec. 201.
H.R. 22 would define market-dominant products to
Sec. 201.
S. 662 would define market-dominant products as:
Provisions
include:
Provisions
Relating to
Relating to
Market-
— single piece first-class letters (both domestic and
Market-
— first-class letters and sealed parcels;
Dominant
international);
Dominant
— single piece international mail;
Products.
— all first-class mail;
Products.
— Not included.
— single piece first-class cards;
— first-class cards;
— media mail;
— Identical.
— library mail;
— Identical.
— special services;
— Identical.
— periodicals;
— Identical.
— standard mail;
— Identical.
— bound printed matter.
— Identical.
— Not included.
— single-piece parcel post;
Would amend 39 U.S.C. 3621 and 3622 to require the
Identical except that PRC would be required to
new Postal Regulatory Commission (see Sec. 501 below)
establish the new rate regulation system within 12
to establish a “modern system for regulating rates and
months of enactment.
classes for market-dominant products within 24 months.”

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CRS-7
H.R. 22
S. 662
The proposed “modern rate regulation system” would be
Similar provision but would require new rate regulation
required to:
system to:
— Reduce the administrative burden of the
— Reduce the administrative burden and increase
ratemaking process;
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
— Identical;
efficiency,
— Allow USPS flexibility in pricing, assure adequate
— Allow the Postal Service pricing flexibility,
revenues (including retained earnings)
including the ability to use pricing to promote
intelligent mail and encourage increased mail
volume during nonpeak periods;
— Assure adequate revenues — including retained
— Assure adequate revenues, including retained
earnings — to maintain financial stability; and to
earnings, to maintain financial stability and meet the
maintain high quality service standards;
service standards established (see below);
— Establish and maintain a fair and equitable
— Would include this provision as a factor not a
schedule for rates and the classification system;
goal of the rate 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.

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CRS-8
H.R. 22
S. 662
In crafting this system, PRC would be required to take
In crafting this system, PRC would be required to take
into account:
into account:
— “The value of the mail service actually provided
Identical;
each class or 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
— “The requirement that each class of mail or type
each class or type of mail service plus that portion of
of mail service bear the direct and indirect postal
all other costs of the Postal Service reasonably
costs attributable to each class or type of mail
assignable to such class or type;
service through reliably identified causal
relationships 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
— Identical;
public, business 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
— Identical;
receiving letters and other mail matter at reasonable
costs;
— “The degree of preparation of mail for delivery
— Identical;
into the postal system performed by the mailer and its
effect upon reducing costs to the Postal Service;

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CRS-9
H.R. 22
S. 662
— “Simplicity of structure for the entire schedule and
— Identical;
simple, 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
— Identical;
mail matter entered into the postal system and the
desirability and justification for special classifications
and services of mail;
— “The importance of providing classifications with
— Identical;
extremely 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
— Identical;
point of view of both the user and of the Postal
Service;
— “The educational, cultural, scientific, and
— Identical;
informational value to the recipient of mail matter; and
— “The policies of this title as well as such other
— Identical;
factors as the 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;

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CRS-10
H.R. 22
S. 662
— Not included.
— The importance of pricing flexibility to
encourage increased mail volume and operational
efficiency. (This provision was added June 22,
2005.)
Would permit the rates and classes regulation system for
Would require the new rate system to:
market-dominant products to include one or more of the
following characteristics:
— price caps, revenue targets, or other forms of
— “include an annual limitation on the percentage
incentive regulation;
changes in rates ... that will be equal to the change in
the Consumer Price Index for All Urban
Consumers...”
— cost-of-service regulation;
— Not included.
— such other forms of regulation as the Commission
— Not included.
considers appropriate to achieve.”
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.”
Not included.
Would allow USPS to “bank” unused pricing authority
for any class or service. Thus, USPS could exceed CPI
for a class or service by the amount that rate increases
for that class or service in the previous year were less
than the CPI. (This provision was added June 22, 2005.)
See Sec. 206 below on workshare discounts.
Would define and establish rules on workshare
discounts (identical to H.R. 22, Sec. 206).

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CRS-11
H.R. 22
S. 662
Sec. 202.
Would amend 39 U.S.C. 3631 to list the following as
Sec. 202.
Similar provision but would define “competitive
Provisions
competitive products:
Provisions
products” as:
Relating to
Related to
Competitive
— priority mail;
Competitive
— Identical;
Products.
— expedited mail;
Products.
— Identical;
— mailgrams;
— Identical;
— international mail; and
— bulk international mail; and
— parcel post.
— bulk parcel post.
The Board of Governors (BOG) of USPS would establish
Similar provision but would require “the written
rates and classes for these products. BOG would be
concurrence of a majority of all of the Governors then
required to publish these decisions in the Federal
holding office” to establish rates and classes in the
Register at least 30 days before the effective date of any
competitive category.
new rates or classes.
These rates would be in accordance with PRC regulations
Identical provision.
that “prohibit the 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.”
Would differentiate between changes to rates and classes
Would require 30 days public notice of any changes to
of “general applicability” in the nation as a whole or a
rates or classes and review by PRC to ascertain whether
substantial region thereof and changes not of general
the proposed changes are in compliance with PRC
applicability. For the former, BOG would need to
regulations prohibiting cross-subsidization and
provide 30 days notice in the Federal Register before the
requiring accurate cost attribution and appropriate
effective date of such changes; for the latter, BOG would
institutional cost contribution.
be required to file records of their decision with PRC at
least 15 days before the effective date.

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CRS-12
H.R. 22
S. 662
Not included.
Would also require PRC to conduct a review to
determine whether the 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.
Would amend 39 U.S.C. 3641, which provides for
Sec. 203.
Identical.
Provisions
temporary changes in postal rates and classes, to create a
Provisions
Relating to
process for testing new postal products.
Relating to
Experimental
Experimental
and New
In order to test a new product, USPS would be required to
and New
Identical.
Products.
file a request with the Postal Regulatory Commission and
Products.
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).

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CRS-13
H.R. 22
S. 662
Would prohibit market tests for new products from
Nearly identical provision, except that S. 662 would
exceeding 24 months; although upon written request of
require”[a]ny test that solely affects products currently
USPS, PRC could extend the trial period 12 months for
classified as competitive, or which provides services
the sake of determining the feasibility or desirability of a
ancillary to only competitive products, shall be
product being tested.
presumed to be in the competitive 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
Nearly identical, though Senate bill does not include the
revenue anticipated or received does not exceed $10
term “nationwide.”
million per year nationwide.
Would empower PRC to “limit the amount of revenues
S. 662 would not empower PRC to “limit the amount of
the Postal Service may obtain from any particular
revenues the Postal Service may obtain from any
geographic market as necessary to prevent market
particular geographic market as necessary to prevent
disruption.” PRC may waive the requirement that a
market disruption.”
tested product’s revenues 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.
Would permit PRC to move products not under the Postal
Identical.
Express Statutes (18 U.S.C. 1696) between the market-
dominant and competitive products categories.

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CRS-14
H.R. 22
S. 662
Sec. 204.
Would amend 39 U.S.C. 36 to require PRC to provide to
Sec. 204.
Identical.
Reporting
Congress and the President an annual report “concerning
Reporting
Requirements
the operations of the Commission under this title,
Requirements
and Related
including the extent to which regulations are achieving
and Related
Provisions.
the objectives of the regulation of the prices of market-
Provisions.
dominant products.
Would also require an estimate of the costs incurred by
Not included here but Sec. 702 would require a
the Postal Service in providing —
universal service study.
(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
Similar provision except that S. 662 would not
report including analysis of the costs, revenues, rates,
empower PRC to prescribe the methodology and S. 662
service quality, timeliness, and reliability of products no
would have the USPS Inspector General audit the report
later than 90 days after the end of each year. Would
itself — not the data collection systems and procedures
require the analysis in the report to conform to
employed to produce it.
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-15
H.R. 22
S. 662
This report must include information on market-dominant
Identical.
products for 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, and the per-item
contribution made to institutional costs.”
H.R. 22 would define “workshare discount” as
Identical.
“presorting, barcoding, 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
Identical provision but also would empower PRC to
“summary data on the costs, revenues, and quality of
demand such data on negotiated service agreements.
service” on experimental competitive products.
Would empower PRC to prescribe the form and content
Identical except S. 662 would also require the
of all reports. Would require PRC to take the following
information to be timely;
into consideration in crafting its reporting prescriptions:
— providing the public with adequate information to
Identical.
assess the lawfulness of rates charged;
— avoiding inflicting unnecessary or unwarranted
Identical.
administrative effort and expense on USPS; and
— protecting the confidentiality of commercially
Identical.
sensitive information.

---

CRS-16
H.R. 22
S. 662
Would require the Postal Service to submit to PRC its
Similar provisions but also would require USPS to
comprehensive statement, performance plan, and program
submit its strategic plan.
performance reports. Would permit USPS to petition
PRC to be permitted to not disclose publicly any
information that falls within the exceptions to the
Similar provision.
Freedom of Information Act as outlined at outlined in 5
U.S.C. 552(b).
Would require PRC to take comments of the public and
Similar provision, but would not require PRC to assess
interested parties on the various reports, statements, and
if market-dominant products met service standards.
plans submitted each year and would require PRC to
H.R. 22 would have USPS devise its own service
assess USPS compliance with laws and rules regarding
standards for market-dominant products; S. 662 would
rates and whether USPS performance goals and market-
have PRC design them (see Title III below.)
dominant product service standards were met. Would
also empower PRC to require USPS to correct
noncompliant behavior.
Would provide for significant reforms in USPS financial
Similar provision at Sec. 605 (see above).
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. USPS reports
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 FY2007 and in each fiscal year
thereafter.”

---

CRS-17
H.R. 22
S. 662
Sec. 205.
Would amend 39 U.S.C. 3662 and 3663 to permit
Sec. 205.
Identical except for clerical differences.
Complaints;
“interested persons” to lodge a complaint with the PRC
Complaints;
Appellate
should they believe USPS is not operating in
Appellate
Review and
conformance with the requirements of Chapters 1, 4, 6 of
Review and
Enforcement.
39 U.S.C. 36, regarding rates, classifications, and
Enforcement.
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
Similar provision but omits provision providing PRC
USPS to remedy the effects of noncompliance. To this
with rate suspension authority.
end, PRC is authorized to delay implementation of rates
or classifications and fine USPS. Any person 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
a limited period of time pending expedited proceedings
under this section.”
Would empower PRC to impose fines for deliberate
Identical.
noncompliance with the requirements of this title.
Sec. 206.
Would allow PRC to permit USPS to enter workshare
Similar provision at Sec. 201.
Workshare
agreements that give greater discounts than costs avoided
Discounts.
by the USPS under the following conditions:

“(1) the discount is —
“(A) associated with a new postal service, a change
to an existing product or service, or a new work-
share initiative related to an existing postal service;

---

CRS-18
H.R. 22
S. 662
“(B) necessary to induce mailer behavior that
furthers the economically efficient operation of the
Postal Service and the portion of the discount in
excess of the cost that the Postal Service avoids as a
result of the workshare activity will be phased out
over a limited period of time;
“(2) a reduction in the discount would —
“(A) lead to a loss of volume in the affected
category or subclass of mail and reduce the
aggregate contribution to the institutional costs of
the Postal Service from the category or subclass
subject to the discount below what it otherwise
would have been if the discount had not been
reduced to costs avoided;
“(B) result in a further increase in the rates paid by
mailers not able to take advantage of the discount;
or
“(C) impede the efficient operation of the Postal
Service;
“(3) the amount of the discount above costs avoided—
“(A) is necessary to mitigate rate shock; and
“(B) will be phased out over time; or

---

CRS-19
H.R. 22
S. 662
“(4) the discount is provided in connection with
subclasses of mail consisting exclusively of mail
matter of educational, cultural, scientific, or
informational value.”
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.
Would amend heading and strike analysis for 39 U.S.C.
Sec. 206.
Similar provision.
Clerical
36, which presently sets forth the Chapter 36 sections on
Clerical
Amendment.
“Postal Rate, Classes and Service,” which Title II
Amendment.
proposes to amend.
Similar provision.
Title III — Modern Service Standards
Not included. See Sec. 204 above for the brief H.R. 22
Sec. 301.
Would amend 39 U.S.C. 36 to require USPS and PRC
proposal for USPS-crafted service standards.
Establishment of
to establish modern service standards for market-
Modern Service
dominant products within 12 months of enactment of
Standards.
this section.
Would require the modern standards to be designed to
achieve the following objectives (provided they are
consistent with USPS’s universal service obligation):

---

CRS-20
H.R. 22
S. 662
— 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 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.

---

CRS-21
H.R. 22
S. 662
Not included.
Sec 302. Postal
Would require the Postal Service — in consultation
Service Plan.
with PRC — to create and submit to Congress a plan
for achieving these standards. The plan is to is due
within six months of establishment of the standards and
must include:
— establish performance goals and describe any
changes needed to the Postal Service’s network to
meet the goals;
— a facilities plan that provides a description of the
long-term USPS vision to rationalize its facilities
and workforce and plans for achieving this vision, a
discussion of the impacts of such changes, USPS
needs for flexibility to make workforce changes, and
anticipated costs and benefits.
Would require USPS to provide an annual report that
details how postal decisions have affected or will affect
rationalization plans and estimates of how other factors
(e.g., automation initiatives, worksharing) may affect
rationalization plans. Also would require the report to
include information on USPS plans for and actions to
reduce its facilities network, statutory or regulatory
impediments to network reduction, plans to expand
alternative retail outlets, and plans for reemployment
assistance and early retirement benefits for displaced
postal employees.

---

CRS-22
H.R. 22
S. 662
Would require USPS to submit the report 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. Would require the Inspector
General to submit both reports to Congress.
Title III — Provisions Relating to Fair Competition
Title IV — Provisions Relating to Fair Competition
Sec. 301. Postal
Would amend 39 U.S.C. 20 to establish a Postal Service
Sec. 401. Postal
Identical.
Service
Competitive Products Fund, “which shall be available to
Service
Competitive
the Postal Service ... for the payment of —
Competitive
Products Fund.
(1) costs attributable to competitive products; and
Products Fund.
(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:
(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-23
H.R. 22
S. 662
Should the funds be in excess of current needs, USPS
Similar provision.
would be permitted to invest those funds in obligations
of, or guaranteed by, the U.S. Government or in
accordance with the advice of the Secretary of the
Treasury.
USPS may deposit excess funds in a Federal Reserve
Identical.
bank or a depository for public funds with the approval of
the Secretary of the Treasury.
USPS would be authorized to “borrow money and to
Similar provision.
issue and sell such obligations as it determines necessary
to provide for competitive products and deposit such
amounts in the Competitive Products Fund.”
Would compute the total assets of the Competitive
Would compute the total assets of the Competitive
Products Fund as the greater of the assets related to the
Products Fund by multiplying the quotient resulting
provision of competitive products or the percentage of
from the total revenues of the Competitive Products
total USPS revenues and receipts from competitive
Fund divided by the total USPS revenue and total USPS
products multiplied by USPS total assets.
assets.
Would permit the federal government to purchase USPS
Identical.
issued debt and would provide USPS clear discretion over
the denomination, time of issuance, maturity dates,
prices, and rates of USPS debt issued.

---

CRS-24
H.R. 22
S. 662
Obligations would not be exempt from taxation by any
Identical.
state or locality nor would they be obligations of the
Government of the United States.
Would require USPS to provide an annual report to the
Identical.
Secretary of the Treasury on the operation and condition
of the Competitive Products Fund.
Would have the Secretary of the Treasury, in consultation
Identical.
with USPS, an independent accounting firm, and such
other advisers as the Secretary deems appropriate,
develop recommendations regarding:
“(1) the accounting practices and principles that should be
followed by USPS with the objectives of (A) identifying
and valuing USPS assets and liabilities associated with
providing competitive products — including the capital
and operating costs incurred in providing such
competitive products; and (B) preventing the
subsidization of such products by market-dominant
products; and
(2) the substantive and procedural rules that should be
followed in determining the assumed Federal income tax
on competitive products income of the Postal Service 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.

---

CRS-25
H.R. 22
S. 662
Sec. 302.
Would define “assumed Federal income tax” to mean the
Sec. 402.
Identical.
Assumed Federal
net income tax that would be imposed by chapter 1 of the
Assumed Federal
Income Tax on
Internal Revenue Code of 1986 on the Postal Service’s
Income Tax on
Competitive
assumed taxable income from competitive products for
Competitive
Products
the year.”
Products
Income.
Income.
Would require USPS to compute its assumed federal
income tax each year and transfer this amount to the
Postal Service Fund.
Sec. 303. Unfair
Would amend 39 U.S.C. 4 by adding a provision that
Sec. 403. Unfair
Identical.
Competition
prohibits USPS from establishing “any rule or regulation”
Competition
Prohibited.
or “term of competition”unless USPS demonstrates that
Prohibited.
the rule, regulation, or term “does not create an unfair
competitive advantage for itself or any federally funded
entity.”
Would prohibit USPS from “compel[ling]the disclosure,
S. 662 is worded nearly identically except that it refers
transfer, or licensing of intellectual property to any third
to “any postal service” instead of “any product or
party” or “obtain[ing] information from a person that
service.”
provides (or seeks to provide) any product, and then offer
any product or service that uses such information, without
the consent of the person providing the information...”
Would require PRC to prescribe regulations to carry out
Identical.
this section.

---

CRS-26
H.R. 22
S. 662
Sec. 304. Suits
Would amend 39 U.S.C. 409 so that USPS, with regard to
Sec. 404. Suits
Similar provision except that S. 662 also would declare
By and Against
activities involved in providing competitive products,
By and Against
that to the “extent that the Postal Service engages in
the Postal
would be considered a person — as used in the provisions
the Postal
conduct with respect to the provision of competitive
Service.
of law involved — and would not be immune under the
Service.
products, it shall be considered a person for the
doctrine of sovereign immunity. Persons could bring
purposes of the Federal bankruptcy laws.”
federal suits against USPS for violations of the
Trademark Act of 1946 (15 U.S.C. 1051) and Section 5 of
the Federal Trade Commission Act (on unfair or
deceptive acts and practices). Would deny USPS legal
representation by the Department of Justice in these
instances.
Also would require USPS, when building new buildings
Similar provision but would also require USPS should
or altering existent ones to comply with “one of the
to “the extent practicable, model building codes should
nationally recognized model building codes” and to do so
meet the voluntary consensus criteria established for
only after “considering all requirements of zoning laws,
codes and standards as required in the National
land use laws, and applicable environmental laws of a
Technology Transfer and Advancement Act of 1995 as
State or subdivision of a State...”
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).”

---

CRS-27
H.R. 22
S. 662
Sec. 305.
Would declare United States policy to be to:
Sec. 405.
Identical except as below noted.
International
International
Postal
— “promote and encourage communications between
Postal
Arrangements.
peoples by efficient operation of international postal
Arrangements.
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
— Would not include “and other international delivery
between governmental and operational responsibilities
services by the Government of the United States and by
with respect to the provision of international postal
intergovernmental organizations of which the United
services and other international delivery services by
States is a member.”
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 other countries to accomplish these
objectives.”

---

CRS-28
H.R. 22
S. 662
Would amend 39 U.S.C. 407 to give the Secretary of
Identical except that S. 662 does not empower the
State responsibility for the “formulation, coordination,
Secretary of State with oversight of operations of “other
and oversight of foreign policy related to international
international delivery services.”
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 prohibit the Secretary of State from
concluding a treaty, convention, or agreement that would,
with respect to any competitive product, give an undue or
unreasonable preference to USPS or any private provider
of postal or delivery services.
Before concluding any treaty, convention, or amendment
Similar provision, but would require Secretary of State
establishing international postage rates or classifications,
to request from PRC “its views.”
would require the Secretary of State to request a PRC
decision on whether such rate or classification is
consistent with the standards and criteria established by
the Commission under section 3622.
Would require the Secretary of State to ensure that each
Similar but would not permit exceptions and
treaty, convention, or amendment ... is consistent with
modifications due to considerations of foreign policy or
PRC decisions “except if, or to the extent, the Secretary
national security by Secretary of State.
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
Not included.
“substantially owned or controlled by persons who are
citizens of the United States.”

---

CRS-29
H.R. 22
S. 662
With respect to competitive products, would require the
Similar provision but refers to “the Customs Service”
“Bureau of Customs and Border Protection of the
instead of the “Bureau of Customs and Border
Department of Homeland Security and other appropriate
Protection of the Department of Homeland Security.”
Federal agencies shall 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.
39 U.S.C. 36 would be amended to include “ Subchapter
Not included.
Redesignation.
VI — General.”
Title IV — General Provisions
Title V — General Provisions
Sec. 401.
Would amend 39 U.S.C. 202(a) to require that at least
Sec. 501.
Similar provision but would not stipulate that “at least
Qualification
four of the Governors of USPS be selected solely on the
Qualification
four of the Governors” be selected based on their
Requirements
basis of their demonstrated ability in managing
Requirements
experience managing entities of a “substantial size.”
for Governors.
organizations or corporations of “substantial size”
for Governors.
Would not define “substantial size.” Would also
(defined as possessing 50,000 or more employees).
require that “[e]xperience in the fields of law and
Governors may “not be representatives of specific
accounting shall be considered in making appointments
interests using the Postal Service” and may be removed
of Governors.”
only for cause.
Further amends 39 U.S.C. 202(a) to require the President
Identical.
to consult with the 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.

---

CRS-30
H.R. 22
S. 662
Would require that the passage of this act not “affect the
Identical.
appointment or tenure 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.”
Not included.
Would reduce terms of governors from nine to five
years and procedures for replacement of sitting
governors with nine-year terms in the event of death or
removal for cause.
Would require that an early vacancy on the Board of
Not included.
Governors be filled by a person nominated with the
concurrence of the major postal labor unions. This
person would serve a three-year term instead of a nine-
year term.
Sec. 402.
Would amend 39 U.S.C. 2005 to limit USPS new
Not included.
Obligations.
obligations for capital improvements and defraying
operating expenses to $3 billion per annum.
Forbids pledging assets related to the provision of
Identical.
competitive products.
Sec. 403. Private
Would amend 39 U.S.C. 601 to permit the private
Sec. 503. Private
Similar provision.
Carriage of
carriage of letters if:
Carriage of
Letters.
Letters.
— 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;
— the letter weighs at least 12 ½ ounces; or

---

CRS-31
H.R. 22
S. 662
— 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 to craft any regulations
necessary to carry out this section.
Sec. 404.
Would modify USPS’s rulemaking authority under 39
Sec. 504.
Identical.
Rulemaking
U.S.C. 401 to include the power “to adopt, amend, and
Rulemaking
Authority.
repeal such rules and regulations, not inconsistent with
Authority.
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.
Would declare that present employee and labor
Sec. 505.
Similar declaration made although S. 662 would amend
Noninterference
organization privileges, rights, and benefits under 39
Noninterference
39 U.S.C. 1207 regarding labor disputes.
With Collective
U.S.C. 12 are not restricted or expanded, except as
With Collective
Bargaining
provided in Sec. 407 below.
Bargaining
Agreements.
Agreements.
Would continue free mailing privileges afforded to postal
Identical provision.
unions.
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-32
H.R. 22
S. 662
Sec. 406. Bonus
Would amend 39 U.S.C. 36 to permit USPS to create one
Sec. 506. Bonus
Identical.
and
or more programs to provide employee bonuses or other
Authority.
Compensation
rewards.
Authority.
Would limit annual executive compensation with bonuses
Identical.
to no more than the “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
Identical.
USPS Board of 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
Not included.
given in its annual 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.
Sec. 407.
Would amend 39 U.S.C. 1207(b) to require that in the
Identical provision found at Sec. 505.
Mediation in
event of a labor dispute the Director of the Federal
Collective-
Mediation and Conciliation Service “shall within 10 days
Bargaining
appoint a mediator of nationwide reputation and
Disputes.
professional standing ... who is also a member of the
National Academy of Arbitrators” instead of a factfinding
panel.

---

CRS-33
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;

---

CRS-34
H.R. 22
S. 662
4. If no resolution has been reached 60 days after
appointment of the mediator, then a three-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.
A similar procedure is created for bargaining units whose
recognized bargaining representative does not have an
agreement with the USPS.

---

CRS-35
H.R. 22
S. 662
Title V — Enhanced Regulatory Commission
Title VI — Enhanced Regulatory Commission
Sec. 501.
Would amend 39 U.S.C. to include a chapter 5 which
Sec. 601.
Similar provisions but also would require that “[n]o
Reorganization
replaces the Postal Rate Commission with the new Postal
Reorganization
Commissioner shall be financially interested in any
and Modification
Regulatory Commission (PRC). PRC would have five
and Modification
enterprise in the private sector of the economy engaged
of Certain
commissioners, appointed by the President with the
of Certain
in the delivery of mail matter.”
Provisions
advice and consent of the Senate. Commissioners are to
Provisions
Relating to the
be chosen solely on the basis of their “technical
Relating to the
Postal
qualifications, professional standing, and demonstrated
Postal
Regulatory
expertise in economics, accounting, law, or public
Regulatory
Commission.
administration, and may be removed by the President
Commission.
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.
Would empower “the Chairman of the Commission, any
Sec. 602.
Similar provision.
Authority for
Commissioner designated by the Chairman, and any
Authority for
Postal
administrative law judge appointed by the Commission”
Postal
Regulatory
to issue subpoenas (provided a majority of PRC concurs).
Regulatory
Commission to
Any person failing to obey a subpoena may be punished
Commission to
Issue Subpoenas.
for contempt of court by the district court of the U.S. in
Issue Subpoenas.
the district in which the person subpoenaed resides or is
served. In cases involving documents exempt from
public disclosure, USPS may respond to the subpoena
with written notification that explains the reasons for
keeping such documents from public view. PRC would

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CRS-36
H.R. 22
S. 662
be empowered to render final decision over the public
disclosure or nondisclosure of such documents.
Sec. 503.
Would amend 39 U.S.C. 504(d) to authorize
Sec. 603.
Identical except that Sec. 603 reads “[t]he amendments
Appropriations
appropriations for PRC out of the Postal Service Fund.
Appropriations
made by this section shall apply with respect to fiscal
for the Postal
Each fiscal year, PRC would be required to submit a
for the Postal
years beginning on or after October 1, 2002.”
Regulatory
budget of expenses to Congress in order to receive an
Regulatory
Commission.
appropriation. Would have amendments in this section
Commission.
“apply with respect to fiscal years beginning on or after
October 1, 2005.”
Sec. 504.
Would replace the words “Postal Rate Commission” with
Sec. 604.
Identical.
Redesignation of
“Postal Regulatory Commission” in Titles 39, 5, and 44
Redesignation of
the Postal Rate
of U.S.C.
the Postal Rate
Commission.
Commission.
Sec. 505. Officer
Would require PRC to designate “an officer of the Postal
Identical provision at Sec. 601 above.
of the Postal
Regulatory Commission in all public proceedings (such
Regulatory
as developing rules, regulations, and procedures) who
Commission
shall represent the interests of the general public.”
Representing the
General Public.

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CRS-37
H.R. 22
S. 662
Title VI — Inspectors General
Not included
Sec. 601.
Would amend the Inspector General Act of 1978 (5
Not included.
Inspector
U.S.C. Appendix) and 39 U.S.C. 504 to establish the
General of the
Office of Inspector General (OIG) of the Postal
Postal
Regulatory Commission. The first PRC Inspector
Regulatory
General is to be appointed no later than 180 days from
Commission.
enactment of this act. H.R. 22 would not enumerate
additional duties of the PRC IG beyond those carried in
present law.
Sec. 602.
Would amend the Inspector General Act of 1978 (5
Not included. Sec. 1003 would require GAO to
Inspector
U.S.C. Appendix) to require presidential appointment of
“review the functions, responsibilities, and areas of
General of the
the Inspector General of the U.S. Postal Service. Would
possible duplication of the United States Postal
United States
empower the IG to have oversight responsibility for all
Inspection Service and the Office of the Inspector
Postal Service to
activities of the Postal Inspection service. Appropriations
General of the United States Postal Service and submit
be Appointed by
for the Office of the Inspector General would be available
a report on the review to the Committee on Homeland
the President.
beginning October 1, 2005.
Security and Governmental Affairs of the Senate.”
Also would require the report to include legislative
recommendations.
Sec. 605.
Equivalent provision at H.R. 22, Sec.204.
Financial
Transparency.
Title VII — Evaluations
Title VII — Evaluations
Sec. 701.
Would require the Postal Service to submit to Congress,
Sec. 702.
Similar provision but PRC would be charged with
Universal Postal
the President, and PRC, a written report on universal
Universal Postal
preparing the report and would also need to provide an
Service Study.
postal service (within 12 months of enactment of this
Service Study
assessment of the postal monopoly (on the delivery of
act). The report must include a history of universal
and the Postal
mail and access to mailboxes) and provide any
service and how it has evolved, USPS recommendations
Monopoly.
proposed changes to either universal service or the

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CRS-38
H.R. 22
S. 662
on universal service, along with descriptions of the scope
monopoly. PRC would have 24 months after enactment
and standards of universal service under present law; any
to submit this report.
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 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.
Would require PRC to provide, at least every 5 years, a
Sec. 701.
Similar provision with differences noted below.
Assessments of
report to the President and Congress concerning the
Assessments of
Ratemaking,
operation of this act’s amendments to the law and any
Ratemaking,
Classification,
recommendations to improve the efficiency of the postal
Classification,
and Other
laws. USPS, after considering this report, would be
and Other
Provisions.
required to submit its comments, which would be
Provisions.
attached to this report. The report would be required to
Would not include the requirement that the report
include specific information on “cost-coverage relating to
provide information on cost coverage on competitive
competitive products collectively” and the operations of
products, the Competitive Products Fund, or the
the Competitive Products Fund and the assumed federal
assumed federal income tax.
income tax thereon.

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CRS-39
H.R. 22
S. 662
Sec. 703. Study
Within one year of the enactment of this act, the Federal
on Equal
Trade Commission (FTC) would be required to prepare
Application of
and submit to the President, Congress, and PRC a report
the Laws to
that “identifying Federal and State laws that apply
Competitive
differently to the United States Postal Service with
Product
respect to the competitive category of mail ... and private
companies providing similar products.”
The study should include appropriate recommendations
Similar provisions but uses the phrase “such legal
for bringing “such legal differences” to an end.
discrimination.”
In preparing the report, the FTC shall consult with
Identical.
governmental and nongovernmental stakeholders.
PRC is to take into account the recommendations of the
Would not require PRC to take into account
study and “subsequent events that affect the continuing
“subsequent events that affect the continuing validity of
validity of the estimate of the net economic effect ... in
the estimate of the net economic effect.”
promulgating or revising the regulations” required by 39
U.S.C. 3633.
Sec. 704.
Would require the BOG to “study and, within 1 year after
Not included.
Greater
the date of the enactment of this act, submit to the
Diversity in
President and Congress a report concerning the extent to
Postal Service
which women and minorities are represented in
Executive and
supervisory and management positions within the United
Administrative
States Postal Service.” Would require data included in
Schedule
the report to be “presented in the aggregate and by pay
Management
level.”
Positions.

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CRS-40
H.R. 22
S. 662
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
Would require USPS within one year to prepare and
Included at Sec. 302 above.
for Assisting
submit to Congress and the Board of Governors a report
Displaced
and a plan on assisting workers displaced as a result of
Workers.
automation or privatization of postal functions.
Sec. 706.
Would require BOG to “study and, within 1 year after the
Not included.
Contracts with
date of the enactment of this Act, submit to the President
Women,
and Congress a report concerning the number and value
Minorities, and
of contracts and subcontracts the Postal Service has
Small Businesses.
entered into with women, minorities, and small
businesses.”
Sec. 707. Rates
USPS and PRC would be required to collaborate on a
Not included.
for Periodicals.
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.

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CRS-41
H.R. 22
S. 662
Sec. 708.
Would direct the OIG of USPS, within 12 months of
Not included.
Assessment of
enactment of this act, to submit to the President,
Certain Rate
Congress, and USPS a study concerning the
Deficiencies.
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 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.
Would require USPS to submit to PRC, Congress, and the
Not included. Sec. 302 above, which describes
Network
Board of Governors a written report on the postal
“modern service standards,” would require USPS to
Optimization.
processing and distribution network. The report should
develop a plan that includes a description of “the
provide account of efforts taken to improve mail
long-term vision of the Postal Service for rationalizing
processing,transportation, and distribution network and
its infrastructure and workforce.”
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.

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CRS-42
H.R. 22
S. 662
Sec. 710.
Would empower Comptroller General to appoint an
Not included.
Assessment of
independent research organization to prepare a report
Future Business
assessing the best business model for promoting ‘an
Model of the
efficient, reliable, innovative, and viable Postal Service.”
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
wholly or partially 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
Would require GAO to prepare a report on the costs and
Not included.
on Certain
benefits of increasing USPS’s discretion to permit foreign
Proposed
air carriers to transport mail.
Amendments.
Not included.
Sec. 704. Report
Would require the IG of USPS to submit a report to
on Postal
Congress and the Postal Service — no later than six
Workplace
months after enactment of this bill — that would:
Safety and
Workplace-
Related Injuries
— 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 failure to achieve these goals and
opportunities for making further progress in meeting
these goals.

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CRS-43
H.R. 22
S. 662
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
Would require the (GAO) to study and submit to the
on Recycled
Congress, the Board of Governors of the Postal Service,
Paper.
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 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.

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CRS-44
H.R. 22
S. 662
Title VIII — Miscellaneous, Technical and Conforming Amendments
Somewhat similar title at Title X (see below)
Sec. 801.
Would amend 18 U.S.C. 3061 to permit USPS to “employ
Similar provision at Sec. 1001 but would amend 39
Employment of
police officers for duty in connection with the protection
U.S.C. 404 to permit USPS to “employ guards for all
Postal Police
of property owned or occupied by the Postal Service or
buildings and areas owned or occupied by the Postal
Officers.
under the charge and control of the Postal Service.”
Service or under the charge and control of the Postal
Service, and may give such guards, with respect to such
property, any of the powers of special policemen”
provided under 40 U.S.C. 1315.
Sec. 802. Date of
Would amend 39 U.S.C. 404(b) so that any appeals to the
Not included.
Postmark to be
closure of post offices mailed or otherwise delivered
Treated as the
would be considered received based upon the postmark
Date of Appeal
date or, if delivered by other means, by paperwork
in Connection
indicating the date contracted for delivery. This would be
with the Closing
effective three months after enactment of this act.
or Consolidation
of Post Offices.
Sec. 803.
Would amend 39 U.S.C. 1001 note so that USPS would
Not included.
Provisions
have the same “authorities and responsibilities” with
Relating to
respect to any individual receiving benefits under the
Benefits Under
former Post Office Department as it has to any officer or
Chapter 81 of
employee of USPS receiving such benefits.
title 5, United
States Code, for
Officers and
Employees of the
Former Post
Office
Department.

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CRS-45
H.R. 22
S. 662
Sec. 804.
Would repeal 39 U.S.C. 52 on the transportation of mail
Identical provision at Sec. 1002, which was added June
Obsolete
by a surface carrier.
22, 2005.
Provisions.
Would amend 39 U.S.C. 5005(b)(1), 5402(d), and 5605 to
eliminate restrictions on lengths of contracts.
Sec. 805.
Would amend 39 U.S.C. 2003 to prohibit USPS from
Not included.
Investments.
investing monies from the Postal Fund in any obligations
or securities of a commercial entity.
Sec. 806.
Would require USPS to permit a publication with a total
Identical provision at Sec. 1002, which was added June
Reduced Rates.
paid circulation of less than 5000 to be treated, for the
22, 2005.
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.
Would amend 36 U.S.C. 3001 to empower the Secretary
Not included.
Hazardous
of Transportation to define hazardous materials and to
Matter.
enumerate the prohibitions against the mailing of
hazardous materials and provide criminal and civil
penalties for violation of these prohibitions.
Sec. 808.
Requires USPS to examine section E670.5.3 of the
Not included.
Provisions
Domestic Mail Manual to determine whether it contains
Relating to
adequate safeguards against the abuse of rates for
Cooperative
nonprofit mail and the deception of customers.
Mailings.

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CRS-46
H.R. 22
S. 662
Sec. 809.
Would amend 39 U.S.C. 3681 so that USPS may
Not included.
Technical and
“establish size and weight limitations for mail matter in
Conforming
the market-dominant category of mail consistent with
Amendments.
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. “Postal rates and fees shall
be reasonable and equitable and sufficient to enable the
Postal Service, under best practices of honest, efficient,
and economical management, to maintain and continue
the development of postal services of the kind and quality
adapted to the needs of the United States.” Also would
require USPS to maintain one or more classes of mail for
transmission of letters that would be sealed against
inspection.

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CRS-47
H.R. 22
S. 662
Title IX — Postal Pension Funding Reform Amendments
Title VIII — Postal Service Retirement and Health Benefit Funding
Sec. 901. Civil
Would amend 5 U.S.C. 83 to alter USPS’s contributions
Similar provision at Sec. 802 except for below noted
Service
to the Civil Service Retirement System (CSRS). Would
differences.
Retirement
shift responsibility for pension payments related to
System.
employee military service to the Department of the
Treasury.
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.
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
Similar provision added June 22, 2005 except that
made by OPM under this section shall, upon request of
review would be performed by an outside actuary, one
the United States Postal Service, be subject to review by
with membership in the American Academy of
PRC, which shall submit a report containing the results of
Actuaries.
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. OPM would then be required to submit a
report containing the results of its reconsideration to
PRC, USPS, and Congress.

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CRS-48
H.R. 22
S. 662
Sec. 902. Health
Would establish the Postal Service Retiree Health
Similar provision at Sec. 803 except for differences
Insurance.
Benefits Fund, which would be administered by the
noted here.
Office of Personnel Management (OPM).
Would establish the Postal Service Retiree Health
Identical.
Benefits Fund, which would be administered by the
Office of Personnel Management (OPM).
Beginning September 30, 2006, USPS would be required
Beginning September 30, 2006, USPS would be
to pay into the Retiree Health Benefits Fund each year:
required to pay into the Retiree Health Benefits Fund
each year:
(A) the portion of the net present value for current and
(A) the net present value of the future payments that
future USPS annuitants that is attributable to the
is attributable to the service of Postal Service
current year’s service of Postal Service employees;
employees during the most recently ended fiscal
year; and
(B) interest on the net present value for that fiscal year
(B) an annual installment computed as the difference
at the interest rate used to compute that net present
between the net present value of the excess of future
value.
payments for current and future Postal Service
annuitants as of the fiscal year ending on September
30 of that year; and the value of the assets of the
Postal Service Retiree Health Benefits Fund as of
the fiscal year ending on September 30 of that year
and the net present value of the future payments that
is attributable to the service of Postal Service
employees during the most recently ended fiscal
year. This amount is to be amortized to create a
series of annual installments that provide for the
liquidation of the liability by September 30, 2045, or
within 15 years, whichever is later.

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CRS-49
H.R. 22
S. 662
Would allow the USPS contribution to the Postal Service
Similar provision.
Retiree Health Benefits Fund in 2006 to be reduced by
any USPS contributions attributable to FY2006.
Would require that any computation or regulation by
Similar provision added June 22, 2005 except that
OPM “under this subsection shall, upon request of the
review would be performed by an outside actuary, one
Postal Service, be subject to review by the Postal
with membership in the American Academy of
Regulatory Commission. The Commission shall submit a
Actuaries.
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.
Would repeal Sec. 3 of P.L. 108-18, which required that
Similar provision at Sec. 804.
Repealed.
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 placed in escrow thereafter.
Sec. 904.
Would require OPM to calculate the per annum “total
Not included.
Ensuring
savings” each year (2006-2015). If the amount USPS has
Appropriate Use
paid into the Postal Service Retiree Health Benefits Fund
of Escrow and
that year is equal to or greater than two-thirds of the total
Military Savings.
savings 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

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CRS-50
H.R. 22
S. 662
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.
Makes the changes of this title effective October 1, 2005
Identical provision at Sec. 805.
Effective Dates.
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.
Senate bill would also amend 5 U.S.C. 8117 so that a
Temporary
USPS employee would not be entitled to compensation
Disability;
or continuation of pay for the first three days of
Continuation of
temporary disability. During this time, a USPS
Pay.
employee would be permitted to use annual leave, sick
leave, or leave without pay.
Not included.
Sec. 902.
In order to reduce Postal Service expenses, this
Disability
provision would encourage Postal Service employees of
Retirement for
retirement age who are injured on the job to retire
Postal
rather than to draw disability compensation. To this
Employees.
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 —

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CRS-51
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.
Similar provision in H.R. 22 Sec. 801.
Employment of
Postal Police
Officers.
See Sec. 804 above.
Sec. 1002.
Similar provision at Sec. 804.
Obsolete
Provisions.

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CRS-52
H.R. 22
S. 662
See Sec. 808 above.
Sec. 1003.
Identical to H.R. 22, Sec. 808.
Reduced Rates.
Not included.
Sec. 1004. Sense
Would declare that “the Postal Service should —
of Congress
Regarding Postal
“(1) ensure the fair and consistent treatment of
Service
suppliers and contractors in its current purchasing
Purchasing
policies...; and
Reform.
“(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.”

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