[Congressional Record (Bound Edition), Volume 151 (2005), Part 13]
[House]
[Pages 17608-17648]
[From the U.S. Government Publishing Office, www.gpo.gov]




               POSTAL ACCOUNTABILITY AND ENHANCEMENT ACT

  The SPEAKER pro tempore. Pursuant to House Resolution 380 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the State of the Union for the consideration of the bill, H.R. 22.

                              {time}  1850


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 22) to reform the postal laws of the United States, with Mr. 
Simpson in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from Virginia (Mr. Tom Davis) and the 
gentleman from California (Mr. Waxman) each will control 30 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Tom Davis).
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 2 minutes to the 
gentleman from Indiana (Mr. Burton), the former chairman of the 
Government Reform and Oversight Committee, who has played a lead role 
in moving this bill to where it is today, and spent 6 long years in the 
vineyards laboring on this when he was chairman of the committee.
  Mr. BURTON of Indiana. Mr. Chairman, first of all, I want to 
congratulate the gentleman from New York (Mr. McHugh), who has done 
yeoman's service to the committee and to this government in fighting 
for a postal reform measure. He has just done a great job. I want to 
congratulate him on all of the hard work in bringing this thing to the 
floor.
  I want to congratulate our chairman, the gentleman from Virginia (Mr. 
Tom Davis). We fought for, I think, 6 years when I was chairman to 
bring this bill to the floor and pass it, and, Mr. Chairman, I want to 
congratulate you on being able to get this thing to the floor.
  I hope that we are successful in getting it not only through here, 
but through the Senate as well.
  I want to congratulate the gentleman from Illinois (Mr. Davis), my 
good buddy, who has one of the best voices in the Congress. If I could 
talk like him, I would be President. He has got that deep, resonant 
voice.
  I want to thank you and the gentleman from California (Mr. Waxman) 
for all of the hard work that you have put in on this bill. I want to 
congratulate you as well.
  Let me just say that we have been working on this now for, gosh, I 
guess at least 10 years, but 6 years when I was chairman and now 4 
years that you have been chairman. We have finally brought a bill to 
the floor. I do not think it is perfect, but it sure is a giant step in 
the right direction.
  If we do not do something about postal reform, what is going to 
happen is the costs are going to go through the roof, and instead of 
this being an agency that deals with the expenses themselves, we are 
going to be seeing taxpayers footing the bill for additional costs for 
postal service.
  With the advent of faxes and e-mails, you have seen the Postal 
Service have a lot more problems with revenues than they have had in 
the past. And it is absolutely essential, if we are going to have a 
viable Postal Service in this country, that we pass this legislation.
  So I think this is a very good bill. I believe it will pass tonight, 
and I hope that all of my colleagues will vote for it. Once again, I 
want to thank all of those responsible, especially the gentleman from 
New York (Mr. McHugh), the gentleman from Virginia (Mr. Tom Davis) and 
the gentleman from Illinois (Mr. Davis) for working so hard on this.
  Mr. DAVIS of Illinois. Mr. Chairman, I ask unanimous consent that I 
control the time of the gentleman from California (Mr. Waxman).
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Illinois?
  There was no objection.
  Mr. DAVIS of Illinois. Mr. Chairman, I yield myself such time as I 
might consume.
  Mr. Chairman, Members of the House have worked over a decade to 
reform this important part of our national culture and economy. I am 
truly pleased to serve in this Congress which is moving this historic 
reform forward.
  I also want to commend the gentleman from New York (Mr. McHugh),

[[Page 17609]]

the gentleman from Virginia (Chairman Davis), and the gentleman from 
California (Mr. Waxman) and their dedicated staffs for their commitment 
to postal reform and for the bipartisan cooperation to work for its 
passage.
  The gentleman from New York (Mr. McHugh) deserves particular 
recognition for his leadership and perseverance with regard to postal 
reform.
  Postal reform is a significant issue for my congressional district as 
it is for much of America. I represent one of the primary postal hubs 
in the Midwest, the great city of Chicago. In addition to the 12,000 
postal employees who deliver mail daily to 1.2 million homes and 
businesses in the Chicago area, we have many respected companies like 
R.R. Donnelley, the largest printing company in North America, that are 
clients of the Postal Service.
  The Postal Accountability and Enhancement Act of 2005 modernizes the 
postal system, helping it remain healthy and affordable well into the 
21st century. This bill is a delicate compromise that has gone through 
a series of processes of hearings, meetings and negotiations. We have 
worked extensively and effectively with administration representatives 
to address their concerns.
  There is something in this bill for everyone. It may not be 
everything that interest groups desire; however, as the gentleman from 
Virginia (Chairman Tom Davis) has said, it is our best chance at 
solving the structural, legal and financial constraints that put the 
Postal Service at risk of catastrophe.
  As the Comptroller General recognized this past January, 
comprehensive postal reform is urgently needed. The Postal Service 
historically has accumulated billions of dollars in debt and currently 
has massive unfunded liabilities.
  Declining first class mail volumes, high infrastructure-related costs 
and rigid statutes necessitate reform. It has been 35 years since 
comprehensive postal reform occurred. It is our responsibility to 
protect our treasured national asset before it is in crisis. The time 
for reform is now.
  H.R. 22 has many highlights for the Postal Service. It provides the 
rate-making flexibility and incentives needed to operate as an 
efficient business. For businesses it provides rate stability, fair 
competition rules, financial transparency, and procurement protections 
needed to predict costs and operate on a level playing field. For 
consumers it preserves universal service, maintains high-quality 
standards, and eliminates unfair mailing costs so that they have an 
affordable and reliable means of communication. For workers it protects 
collective bargaining and offers whistleblower protections that are 
needed to ensure safe employment. For taxpayers it ensures the 
viability of a national asset and removes the threat of a taxpayer 
bail-out of the Postal Service due to financial insolvency.
  These are just some of the provisions that will go a long way to 
helping the Postal Service better serve its customers, compete fairly 
with the mailing industry and contribute to our Nation.
  In addition, I am pleased that the bill requires a study of the 
number of contracts with women, minorities and small businesses, and 
that it protects our domestic airlines from outsourcing of jobs to 
foreign carriers. I represent many members from each of these groups, 
and it is important that our reforms treat them all fairly. I reiterate 
that this bill is the best option to protect our treasured national 
asset before it is in crisis.
  I know that the issue of classifying single-piece parcels as 
competitive or market-dominant has caused a good deal of anxiety for 
many parties affected by postal reform. I look forward to addressing 
this issue in conference.
  And at this time, Mr. Chairman, I would like to enter into a colloquy 
with the distinguished chairman of the Government Reform Committee, the 
gentleman from Virginia (Mr. Tom Davis).
  Mr. Chairman, section 404 of the Postal Accountability and 
Enhancement Act alters paragraph 2 of section 401 of title 39 of the 
U.S. Code. This section pertains to the rulemaking authority of the 
United States Postal Service. Obviously the issue of fairness in 
rulemaking by the Postal Service affects a number of businesses in my 
district.
  I would like to ask the distinguished chairman to clarify how 
rulemaking by the Postal Service should consider the circumstances 
within the postal sector.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, will the gentleman yield?
  Mr. DAVIS of Illinois. I yield to the gentleman from Virginia.
  Mr. TOM DAVIS of Virginia. I thank the gentleman for yielding.
  Mr. Chairman, the committee intends that the Postal Service will 
exercise the more clearly delineated rulemaking powers provided under 
this section in a way that is rationally related to the policy 
objectives set out in the revised statute, and it is predicated upon an 
understanding of the effect the regulations will have on the conditions 
in the postal sector.

                              {time}  1900

  Mr. DAVIS of Illinois. Reclaiming my time, I would like to ask the 
distinguished chairman of the Committee on Government Reform to further 
clarify the meaning of the language related to the role of the Postal 
Regulatory Commission in entering complaints related to rule-making.
  I yield to the chairman to find out his understanding.
  Mr. TOM DAVIS of Virginia. I thank the gentleman for yielding. Mr. 
Chairman, the committee further expects that the Postal Regulatory 
Commission will distinguish carefully between abuses of the Regulatory 
Authority set out in section 404 and the legitimate exercise of 
managerial discretion by the Postal Service in its implementation of 
the complaint provisions contained in section 205 of the bill.
  Mr. DAVIS of Illinois. Reclaiming my time, I would like to thank the 
distinguished chairman for his answers and for his cooperation.
  Mr. Chairman, I reserve the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, most of us are familiar with the engraved saying 
outside the James A. Farley Post Office in New York City: ``Neither 
rain, nor snow, nor heat, nor gloom of night might stay these couriers 
from the swift completion of their appointed rounds.''
  This is the unofficial motto depicting some of the circumstances our 
Nation's letter carriers face in fulfillment of the universal service 
obligation of the United States Postal Service.
  Mr. Chairman, I rise today in support of H.R. 22, the Postal 
Accountability and Enhancement Act, which addresses a problem plaguing 
our Postal Service today that is far greater than the snow or rain or 
heat or gloom of night. That problem is the outdated and unsustainable 
structural framework of the Postal Service which threatens to bring it 
to the brink of catastrophe unless Congress acts immediately.
  This legislation is about more than reforming the Postal Service 
itself. It is about reforming and sustaining a vital sector of our 
overall economy. After all, the Postal Service currently has about 
707,000 career and 98,000 noncareer employees. In addition, more than 9 
million American jobs, $900 billion in commerce, 9 percent of the 
Nation's gross domestic product, let me repeat, 9 percent of GDP depend 
on mail and package delivery. Thus, the Postal Service is not only 
vital to our national communication network but also to our national 
economy.
  Each year the Postal Service processes and delivers 208 billion 
pieces of mail to more than 130 million addressees in the United 
States. That is 208 billion magazines, catalogs, thank-you notes, 
birthday cards, wedding invitations, Social Security checks, IRS 
refunds, letters to Congressmen, movie rentals, all delivered in 
fulfillment of the Postal Service's promise of universal service.
  The last time Congress successfully passed legislation to overhaul 
the post office was 1970 when President Nixon signed the Postal 
Reorganization Act, before e-mails, before fax machines. It is time to 
bring the service into the 21st century.

[[Page 17610]]

  The legislation we are considering today, the Postal Accountability 
and Enhancement Act, is the culmination of a decade of hard work and 
study, not to mention a great deal of bipartisan negotiation and 
cooperation amongst various groups. Consequently, H.R. 22 now 
represents our best chance at solving the structural, legal, and 
financial constraints that have brought the Postal Service to the brink 
of utter breakdown.
  This past April, the Postal Service filed paperwork with the Postal 
Rate Commission to request a 5.4 percent rate increase for most 
categories of mail. These rate hikes, which are scheduled to take 
effect early next year unless Congress acts to prevent them, will 
impose a significant cost burden, let us call it what it is, a tax on 
the postal consumer.
  For direct marketers, financial service companies and businesses 
relying heavily on shipping and mailing, these rate hikes are 
devastating. To make matters worse, increasing postal rates could send 
the postal office into what many observers call a death spiral, where 
declining business leads to higher rates which in turn leads to decline 
in business until it is too late to change course.
  Unfortunately, under current law, the Postal Service's only recourse 
to remain competitive in today's market is to raise rates. That is no 
way to run an operation. In addition, the Postal Service's most recent 
request for a rate increase was spurred in part by an existing 
requirement that the Postal Service contribute $3.1 billion to a 
Federal pension escrow account which now houses more than $73 billion 
in civil service retirement savings that rightfully belongs to the 
United States Postal Service.
  This is just one of many instances in which the USPS is hampered by 
the current legal framework. And it is one of many outdated 
requirements that H.R. 22 seeks to reform.
  Quite simply, the laws that the Postal Service has today are outdated 
and unsuited for today's competitive environment. Let me take just a 
minute to highlight a few of the reform components included in this 
comprehensive bill that will enable the service to move into the 21st 
century.
  Universal service. First and foremost, the bill preserves the Postal 
Service's commitment to universal service, the guaranteed delivery 6 
days a week to each and every address in the United States.
  Pension responsibility. It returns responsibility for funding the 
military cost of postal retirees' pension to the Treasury Department 
where it belongs. It is recommended by the President's commission. This 
liability was shifted to the Postal Service in the last Congress. That 
shift was little more than an accounting gimmick, but it is one that 
must be reversed if we are to be serious about fixing the Postal 
Service's long-term balance sheet.
  The escrow account. As I have already mentioned, the bill frees up 
the $73 billion in civil service retirement savings that has been held 
in escrow, allowing the Postal Service to use this money to defray rate 
increases, among other options.
  Modern rate regulation. This legislation shifts the basis of the 
Postal Rate Commission from a costly, complex scheme of rates to a 
modern system designed to ensure that rate increases generally do not 
exceed the annual change in the consumer price index. This applies only 
to market-dominated products, such as letters, periodicals, and 
advertising mail, because the Postal Service has provided different 
pricing freedom for its competitive products, like express mail and 
priority mail.
  Strengthening the commission. This act will rename the Postal Rate 
Commission the Postal Regulatory Commission and give it teeth by 
granting it subpoena power and a broader scope for regulation and 
oversight.
  Finally, the act sets the stage for future reforms by mandating 
several studies including a comprehensive assessment of the scope of 
standards for universal service.
  Today, the White House released its statement of administration 
policy, its SAP, regarding this legislation. While we share the 
ultimate goal of effectively reforming the Postal Service, some issues 
still lack consensus between the Congress and the White House. The 
administration has established some general, overarching principles to 
guide the framing of the comprehensive reform of the U.S. Postal 
Service. These include best practices of corporate governance, 
transparency, flexibility, accountability, and self-financing.
  Our bill shares these goals, but recognizes these principles are 
often times at odds with one another and may require some give and 
take. For example, the administration has proposed segment reporting 
for each and every class of mail, a practice which would unfortunately 
place the Postal Service at a competitive disadvantage with some of its 
toughest competitors. Thus, this requirement would be contrary to the 
administration's first stated proposal of best practices of corporate 
governance. It is just one example of an instance in which compromise 
is needed if we are to enact meaningful, comprehensive reform.
  This bill, the refined product of nearly 10 years of careful 
negotiation and compromise, strikes an ideal balance among the guiding 
principles on which both the House and administration are in agreement. 
I just want to assure the administration we will continue to work 
closely will them as H.R. 22 heads toward a conference.
  Before I conclude, I want to take this opportunity to thank the 
gentleman from New York (Mr. McHugh), who chaired our special panel on 
postal reform and was the original bill's chief sponsor. He was, 
without doubt, the right leader to undertake this daunting task.
  I also want to thank the former chairman of the Committee on 
Government Reform, the gentleman from Indiana (Mr. Burton), who played 
an integral role in moving the ball forward on postal reform that 
allowed us to be where we are today.
  Finally, I want to thank the Committee on Government Reform's ranking 
member, the gentleman from California (Mr. Waxman), and the gentleman 
from Illinois (Mr. Davis), the ranking member on the special panel, for 
their dedication to this subject and their willingness to operate in a 
bipartisan manner and work through this, through the difficult issues 
that have been presented.
  Bipartisan cooperation is the primary reason why this bill has 
finally reached the House floor and why we have been able to keep such 
diverse stakeholders around the table in productive discussions.
  Mr. Chairman, I reserve the balance of my time.
  Mr. DAVIS of Illinois. Mr. Chairman, I yield 3 minutes to the 
gentleman from Missouri (Mr. Clay), a member of the Committee on 
Government Reform whose father preceded him, and his father preceded 
him not only in office but in having a great interest in postal 
matters.
  Mr. CLAY. Mr. Chairman, I thank the gentleman from Illinois (Mr. 
Davis) for yielding me time.
  I too want to join my colleagues in congratulating and thanking the 
gentleman from New York (Mr. McHugh), the gentleman from Virginia 
(Chairman Tom Davis), and the ranking members, the gentleman from 
California (Mr. Waxman) and the gentleman from Illinois (Mr. Davis), 
for the hard work they put into advancing this bill to this point.
  I rise in support of the Postal Accountability and Enhancement Act. I 
am committed to protecting the interests of the U.S. Postal Service. I 
have the honor of representing over 3,000 Postal Service employees. 
Together they earn over $167 million in annual payroll and pay almost 
$20 million dollars in income taxes.
  Postal employees represent an important part of my community economic 
base. Several months ago, I hosted a postal roundtable with groups 
representing postal-reliant businesses that depend on the postal system 
to deliver their products and collect their revenues. In addition, 
postmasters, letter carriers, direct mailers, and representatives of 
trucking companies participated in this roundtable.

[[Page 17611]]

  While overwhelming support was expressed for this legislation, many 
concerns were raised about single-piece parcels, single-piece parcel 
post, or single letters, whether they should continue to be classifieds 
as market dominant so that the Postal Service can continue to offer 
fair rates for items mailed anywhere, including rural and more remote 
areas. The U.S. Postal Service would have to dramatically raise prices 
on such packages and possibly be forced to stop offering the 
universally affordable rate for single-piece parcels to individuals and 
small businesses.
  This would result in the loss of many jobs within the Postal Service 
and create an inconvenience to customers. The U.S. Postal Service 
provides a vital public service to all of our constituents and is an 
essential part of our Nation's economic infrastructure.
  I urge my colleagues to put single-piece parcels back in the market 
dominance category and support the Postal Accountability and 
Enhancement Act.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield such time as he may 
consume to the gentleman from New York (Mr. McHugh), the chief author 
of this, someone who has championed this cause since I came to 
Congress.
  Mr. McHUGH. Mr. Chairman, I thank the gentleman for yielding me time.
  Mr. Chairman, today, obviously, represents a critical step in what 
has to this point been a journey of more than 10 years, a decade and a 
half of hearings and meeting, of negotiations followed by more 
hearings, more meetings, more negotiations, to rewrite and rewrite 
again and again a piece of legislation that will serve as the first 
true serious reform of the sector known as the United States Postal 
Service, that since 1970.
  In that length of effort, Mr. Chairman, that incredible commitment to 
the issue speaks directly to the critical importance of the Postal 
Service of this Nation and the complexity of this system that each and 
every day and each and every year delivers some 206 billion pieces of 
mail going through 38,000 postal facilities to 143 million addresses in 
virtually every community in every State in this Nation, 6 days a week, 
day in, day out, week in and week out.
  So since 1775 this is the service that American people and American 
businesses alike have come and grown to expect. Universal service at a 
uniform price, no questions asked. No one in this country, Mr. 
Chairman, goes to his or her mailbox or his or her local post office 
wondering if the mail will be there. It is always there. It has always 
been there. But the true question, the question that this bill seeks to 
answer with a resounding yes, I might add, is will the mail always be 
there?
  I am concerned that truly without this legislation the answer might 
well be far different than that resounding yes. Postal service of today 
is far removed from that of 30 years ago when reform was last enacted. 
Unlike then, the mail stream of today has diminished by such things as 
e-mails and faxes and cell phones and text messages, largely electronic 
means of communication that replace mail. They replace stamps. And thus 
they replace the revenues necessary to operate our key mail delivery 
system.
  Some ask, if people are choosing to communicate in different ways, 
why do we need to change things at all? Some even go so far as to 
suggest that the time of the Postal Service has passed, that we ought 
to let the private sector take over.

                              {time}  1915

  But the fact is, Mr. Chairman, for all the challenges the Postal 
Service of the 21st century faces, it still retains its traditional 
place as a key cog in how American businesses conduct their affairs and 
how Americans all across this land communicate.
  The postal business sector of this Nation, as we have heard the 
distinguished chairman of the full committee clearly state, represents 
a $900-billion-a-year industry, with 9 million jobs, and more than 8 
percent, nearly 9 percent, of our entire Nation's economy.
  The fact is, Mr. Chairman, if the Postal Service did not exist here 
in 2005, we would have to invent it. That is why more than 200 major 
companies in this country have strongly endorsed this measure, 200 
companies representing the lifeblood of the economy of this Nation. 
That is why virtually every major labor organization within the Postal 
Service has endorsed it, why even those companies that compete against 
the Postal Service have endorsed H.R. 22, including United Parcel 
Service, including FedEx, and others.
  Now, I have no doubt there are going to be those who believe they 
have a better idea, those who will say they can improve this bill by 
adding or diminishing its provisions. And, Mr. Chairman, speaking 
honestly, as someone who has been involved from day one for more than 
10 years, probably some, if not all, of these critics may be right. But 
what I would urge my colleagues to resist this day is the 
understandable temptation to make the perfect the enemy of the good.
  This bill's formation has taken more than a decade for some very good 
reasons. It is, frankly, based upon the complexity of the system 
itself. We have considered those interests of the people who manage it, 
those who man it, the businesses that rely upon it, those who compete 
against it, those who depend upon it, so many interests whose input and 
whose needs are all carefully balanced in this bill. Perfection? No, 
perhaps not, but a solution nevertheless, a solution to the challenges 
that provide the United States Postal Service with the necessary tools 
to operate in a manner that most of us expect, like a modern, flexible, 
nimble business competing on a fair playing field, operating in an 
efficient and professional manner.
  Mr. Chairman, at the risk of sounding immodest, I am very, very proud 
of this legislation. I am proud of its vision, I am proud of its 
construct and its provisions, but I am truly prouder still of those 
organizations and those special people, those individuals involved in 
those organizations and in this reform effort that have been there from 
the start.
  They say a year in government and politics is a lifetime, and if that 
is true, 10 years has to approach infinity. But through it all, we have 
had special people devoted to extraordinary efforts in a singularly 
vital cause. And our thanks, and clearly my thanks, are owed to so many 
to even begin to list at this moment. Many of them are cited on the 
page that I just held up, all those more than 200 interests who 
strongly support this.
  Many, if it were appropriate under the House rules, I would note are 
in the gallery today. But seeing as how it is not appropriate to say 
that under the House rules, I will resist the temptation. But without 
naming them specifically, I owe them thanks.
  At perhaps the risk of offending many, I have to acknowledge a 
particularly special few: The gentleman from Illinois (Mr. Davis) and 
the gentleman from Pennsylvania (Mr. Fattah), the two ranking members 
who first began to help us move this issue forward. Mr. Chairman, the 
gentleman from Illinois (Mr. Davis) has been a stalwart, a ranking 
member who lost focus at no time and never lost faith.
  The gentleman from California (Mr. Waxman), the full committee 
ranking member, who put aside partisanship, not an easy thing to do in 
Washington these days, for the simple reason he understood and deeply 
cared about the conclusion of this challenge.
  Bill Clinger, followed by the gentleman from Indiana (Mr. Burton), 
the first and second chairman of the Committee on Government Reform, 
who continued to bring our attention to it and keep us focused.
  And our current chairman, the gentleman from Virginia (Mr. Tom 
Davis), who might have, who might have, but thankfully did not, let 
this effort die; who urged us forward; whose political skills, 
intellectual depth, and administrative acumen have really advanced us 
to this threshold of success.
  These are all important folks, but I want to say, as much as I deeply 
indebted for those efforts, in my opinion the success of today's 
consideration is predicated largely upon the efforts of one very 
special, very dedicated man:

[[Page 17612]]

Robert Taub. Through it all, Robert has been the intellectual and 
spiritual glue that has held this effort together. He was always 
willing, even anxious, to my amazement, to do one more meeting, one 
more effort to advance reform. And when others saw failure, Robert saw 
a challenge. When others lost hope, Robert remained focused. When 
others remained angry, including myself, Robert remained calm. He has 
been the eye of the storm in a torrent of conflict, of divergent and 
seemingly irreconcilable differences. I am very, very proud that the 
payroll lists this very extraordinary man as my chief of staff. I am 
prouder still that in my heart I consider him a friend, and I am deeply 
in his debt particularly.
  So I will, with again a thanks to Chairman Davis for all that he has 
done, look forward to the passage of this bill.
  Mr. DAVIS of Illinois. Mr. Chairman, I yield myself such time as I 
may consume to say that there is a big difference between vanity and 
pride, and the gentleman from New York (Mr. McHugh) has every reason to 
be proud of this product, and we do not think it is vanity at all.
  Mr. Chairman, it is my pleasure to yield 3 minutes to the gentlewoman 
from New York (Mrs. Maloney).
  Mrs. MALONEY. Mr. Chairman, I thank the gentleman for yielding me 
this time and for his extraordinary leadership on the Task Force for 
Postal Reform, on which I have served, and I rise in strong support of 
it.
  It has been a long and difficult journey which has brought us here 
today, well over 10 years, and I thank everyone who has been involved 
in this bipartisan effort to reform the way the Postal Service 
currently operates: the gentleman from Virginia (Mr. Tom Davis), our 
chairman; the ranking member, the gentleman from California (Mr. 
Waxman); the gentleman from New York (Mr. McHugh); the gentleman from 
Illinois (Mr. Davis); and their hard and dedicated working staffs.
  This is very strongly supported legislation. It is a balance that we 
have achieved. We urge everyone to vote for it and to vote against the 
amendments that will be coming forward. It is supported by many of the 
unions, APWU, the Letter Carriers, the Postmasters, and the postal-
reliant businesses, some of whom are located in my district, the 
Magazine Publishers of America, the direct marketers, the financial 
services. In fact, there is a coalition of many, literally hundreds, of 
businesses, and the 21st Century Postal Service Committee has issued a 
statement of support along with the over seven union statements in 
support of this bipartisan legislation.
  As we know, this is incredibly important to our economy, with more 
than 9 million workers worldwide. They generate over $900 billion 
annually of our GDP, and represent nearly 9 percent of our overall 
budget. If we fail to act on this very pressing issue, the public and 
the postal-reliant businesses surely will face higher postal rates in 
the near future.
  With the Postal Service facing billions of dollars in debt over the 
next few years, this Congress, 2 years ago, passed bipartisan 
legislation that reduced the Postal Service's contribution to the Civil 
Service Retirement and Disability Fund after it was determined that it 
had been making overpayments. This reform was expected to help the 
Service reduce its debt to the Treasury by approximately $3 billion 
each year and to keep rates stable until 2006. It also created an 
escrow account designed to ensure that the Postal Service uses these 
savings wisely. The bill before us today releases that escrow account 
and will help us to keep our rates stable.
  Earlier this year, the Postal Service filed a request with the Rate 
Commission for yet another increase of 5.4 percent. It would be the 
fourth increase since 2001, and it is critical that we release these 
monies in the escrow to delay this rate increase.
  Mr. Chairman, this legislation relieves the Postal Service and postal 
customers of the $27 billion burden in military service payments by 
returning that responsibility to the Treasury. After all, every other 
agency has this responsibility in the Treasury, and Postal should also.
  This legislation also creates a Postal Regulatory Commission with 
authority to create a modern system for postal rate regulation. Mr. 
Chairman, a number of magazines have gone out of business because of 
rate increases, and so this legislation is vital to our economy.
  Mr. Chairman, I submit for the Record the material I referred to 
above regarding the unions in favor of this legislation, and also a 
listing of numerous companies and organizations in favor of the 
legislation:

         [From the Coalition for a 21st Century Postal Service]

 9 Million Workers . . . $900 Billion Economy . . . 9 Percent of U.S. 
GDP Help Keep the Mailing Industry Strong and the USPS Viable--Vote Yes 
                               on H.R. 22

       Dear Representative: The companies and organizations below 
     urge you to support H.R. 22, the ``Postal Accountability and 
     Enhancement Act of 2005.'' This legislation will bring 
     urgently needed modernization and meaningful reform to the 
     United States Postal Service (USPS), the lynchpin of the 
     mailing industry--a key economic sector that employs 9 
     million workers adding $900 billion annually to the U.S. 
     Gross Domestic Product. In fact, 9 percent of the nation's 
     GDP can be directly attributed to the mailing industry.
       H.R. 22 will bring increased efficiencies to the USPS, and 
     would allow for more predictability and affordability in 
     future postal rate increases. Without postal reform, American 
     jobs will be placed at risk as companies are forced to 
     compensate for capricious and expensive rate hikes in the 
     future.
       The companies and organizations listed below consider 
     passing postal reform legislation this year an urgent 
     priority, and urge you to cast a ``YES'' vote on H.R. 22 when 
     it is considered on the House floor. Thank you for your 
     consideration.


                Advertising/Marketing/Retail Industries

       Arandell, CC3, Direct Marketing Association, Domtar, 
     Hayzlett Companies, Inc., J.C. Penney, National Retail 
     Federation, Vertis Direct Marketing Services.


                Financial Services/Insurance Industries

       Aegon, American Express, Bank of America, CapitalOne, 
     Chase, JP Morgan Chase, Citigroup, CUNA Mutual, The Financial 
     Services Roundtable, LaSalle Bank, MBNA, Property Casualty 
     Insurers Association of America, USAA, Wachovia.


                   Forestry/Paper/Printing Industries

       American Forest & Paper Association, Banta, International 
     Paper, MeadWestvaco, National Association for Printing 
     Leadership, Paramount Cards, Quad Graphics, Quebecor World, 
     R.R. Donnelly, Richardson Printing, Inc., Solar 
     Communications, Stora Enso, Weyerhaeuser Company, Wisconsin 
     Paper Council.


                    Newspaper/Publishing Industries

       Harcourt, Inc., Holt Reinhart & Winston, Inc., IDEAlliance, 
     LexisNexis, Magazine Publishers of America, McGraw-Hill, 
     National Newspaper Association, Printing Industries of 
     America/GATF, Publishers Press, Reed Business Information, 
     Reed Elsevier, Inc., Time, Inc.


                Mailing/Fulfillment/Shipping Industries

       Alliance of Non-Profit Mailers, Association for Postal 
     Commerce, Association of Priority Mail Users, Mailers 
     Council, Mailing and Fulfillment Service Association, 
     National Postal Policy Council, Parcel Shippers Association, 
     Pitney Bowes, PSI Group, Total Systems Services, Inc.


                  Manufacturing/Technology Industries

       Document Management Industries Association, Envelope 
     Manufacturers Association, Keyspan, Kodak, Multi-Plastics, 
     Inc., National Association of Manufacturers, NPES The 
     Association for Suppliers of Printing, Publishing and 
     Converting Technologies.


                    Small Business/General Commerce

       National Federation of Independent Business, Small Business 
     Legislative Council.


                  USPS Management/Labor Organizations

       National Association of Postal Supervisors, National Rural 
     Letter Carriers Association.


                     State and Local Organizations

       Printing Industry Association of the South, Inc., Pacific 
     Printing and Imaging Association, PIA, Inc. of Arizona, PIA 
     of Southern California, PIA of San Diego, Printing Industries 
     of Northern California, Printing & Imaging Association 
     Mountain States, The Association of Graphic Communications, 
     Graphic Arts Association, Printing and Graphics Association 
     MidAtlantic, Printing Association of Florida, Inc., PIA of 
     Georgia, Inc., Printing Industries of Illinois/Indiana 
     Association, Printing Industries of the Midlands, Inc., 
     Printing and Imaging Association of Mid America, Printing 
     Industries of New England, Printing Industries of Michigan, 
     Printing Industry of Minnesota, Inc., Printing Industries of 
     St. Louis, Printing & Imaging Association of New York State, 
     Inc., PI of the Carolinas, Inc., Printing Industries of Utah, 
     Printing Industries of

[[Page 17613]]

     Virginia, Inc., Printing Industries of Wisconsin.
                                  ____

                                                    July 25, 2005.
       Dear Representative: On Tuesday, July 26, the House is 
     scheduled to consider H.R. 22, the Postal Enhancement and 
     Accountability Act. We understand that a series of amendments 
     may be offered that will have a catastrophic impact upon more 
     than 740,000 postal employees and the American public. 
     Therefore, we urge you to vote NO on amendments that 
     jeopardize affordable and universal mail service to your 
     constituents, and undermine a carefully drafted bill that 
     balances the needs of the mailing public and postal 
     employees.
       H.R. 22 is the product of years of give and take and 
     delicate negotiations with all sides making major concessions 
     along the way. Many of these amendments ignore the results of 
     those negotiations. Specifically, we oppose amendments being 
     offered by Congressmen Flake, Hensarling, McHenry, and Pence 
     because they individually or collectively undermine the ten-
     year effort by the authors of H.R. 22.
           Sincerely,
       American Postal Workers Union.
       National Association of Postmasters of the U.S.
       National Association of Letter Carriers.
       National League of Postmasters of the U.S.
       National Rural Letter Carriers Association.
       National Association of Postal Supervisors.
       National Postal Mail Handlers Union.

  Mr. TOM DAVIS of Virginia. Mr. Chairman, may I inquire as to how much 
time remains on each side?
  The CHAIRMAN. The gentleman from Virginia (Mr. Tom Davis) has 11 
minutes remaining, and the gentleman from Illinois (Mr. Davis) has 
17\1/2\ minutes remaining.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 3 minutes to the 
gentleman from Utah (Mr. Cannon), who has been very helpful in putting 
this bill together.
  Mr. CANNON. Mr. Chairman, first of all, I would like to thank the 
chairman of the full committee, the gentleman from Virginia (Mr. Tom 
Davis), my friend, for entering into this colloquy, and also my friend, 
the gentleman from New York (Mr. McHugh), for the work they have done 
on this bill. This has been extraordinary. Since I have gotten here, I 
have had hundreds of inquiries about this issue, as has every other 
Member of Congress, and the gentleman from New York (Mr. McHugh) has 
handled them remarkably well. I strongly support H.R. 22. It is long 
overdue.
  Mr. Chairman, I want to bring to the attention of the gentleman from 
Virginia (Mr. Tom Davis) an important problem in my district. The city 
of Taylorsville, Utah, has been assigned four different ZIP codes, and 
its citizens must access services at five different post offices, all 
outside the city.
  Mr. Chairman, if we were talking about New York City or Los Angeles, 
more ZIP codes would be common, but in a city of only 60,000, we should 
not have four different ZIP codes and be serviced by five different 
post offices. So it is my sincere hope that the chairman and I can work 
together to reduce the number of ZIP codes for Taylorsville from four 
to one, and work towards a fully functioning post office located within 
the city proper.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, will the gentleman yield?
  Mr. CANNON. I yield to the gentleman from Virginia.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, we have tried on this 
legislation to not get into some of the specific shortcomings of Postal 
Service delivery on ZIP codes and the like, but I want to tell the 
gentleman that I have looked at this Taylorsville issue. I want to 
pledge to work with the gentleman from Utah and with the Postmaster 
General to make sure these needs are resolved and to support a 
thoughtful solution for the city of Taylorsville, and just assure the 
gentleman that that is a priority.
  Mr. CANNON. Reclaiming my time, Mr. Chairman, I thank the gentleman 
from Virginia for his commitment to helping me solve this problem, and 
I want to thank Taylorsville Mayor Janice Auger for her tireless effort 
on this issue.
  Mr. DAVIS of Illinois. Mr. Chairman, I am pleased to yield 2 minutes 
to the gentlewoman from California (Ms. Watson).
  Ms. WATSON. Mr. Chairman, I thank the gentleman for yielding me this 
time, and I rise today in support of H.R. 22, the Postal Accountability 
and Enhancement Act. I am extremely happy that after years of work, we 
are finally bringing this important bill to the floor for a vote.
  In my congressional district alone, there are 66 postal facilities 
accounting for over 1,600 postal workers and $79 million in wages. The 
men and women of the United States Postal Service bind our Nation 
together, offering prompt and reliable services at uniform prices.
  Many people do not realize the economic power this industry has. The 
postal industry accounts for over 8 percent of the gross national 
product, and it is the backbone of a $900 billion mailing industry that 
drives the U.S. economy. To maintain the current level of high-quality 
service, we must reform our postal system for the new information age.
  The United States Postal Service is the world's most efficient postal 
system. While America is adding almost 2 million addresses per year, 
the number of postal employees have held steady, meaning that the same 
number of letter carriers are walking further, while delivering more 
mail.
  This bill must be passed because it addresses many pressing issues, 
such as rate changes, the Postal Service Retirement System, escrow 
accounts, and military pension issues. This is the only Federal agency 
where funds in the civil retirement system have to be used to fulfill 
military obligations within the Department.

                              {time}  1930

  The bill also addresses the issue of the United States Postal Service 
overpayment of over $78 billion in civil service retirement benefits. 
The Congressional Budget Office estimates that the escrow requirements 
will cost the United States Postal Service nearly $3 billion in 2006 
and over $36 billion over the next 8 years. If the postal system is not 
fixed, our constituents will bear the cost.
  This Nation is very fortunate to have a Postal Service system that 
handles such a large volume of mail while operating at affordable costs 
to our citizens.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 2 minutes to the 
gentleman from Pennsylvania (Mr. Murphy).
  Mr. MURPHY. Mr. Chairman, although we may be living in the age of 
technology and more than a few of us cannot live without our e-mail, 
the United States Postal Service continues to serve a key role for both 
personal and business communications. With 9 million jobs and $900 
billion in annual commerce dependent on services provided by USPS, 
consideration of this reform package could not come soon enough.
  In recent years, the U.S. Postal Service has struggled to perform its 
core mission of providing affordable mail service 6 days a week to 
every American. Today, the Postal Service operates under the same set 
of rules established in 1970; yet the service now delivers nearly 2\1/
2\ times more mail to almost twice as many homes.
  Rising costs and financial losses, coupled with rate increases meant 
to remedy a declining fiscal situation, have left the Postal Service in 
a position that threatens the long-term viability of mail as an 
affordable, effective business communications channel.
  I am pleased H.R. 22 protects universal service while taking steps to 
alleviate the seemingly constant threat of rate increases by 
modernizing rate regulation and by freeing up $73 billion in civil 
service retirement savings that have been held in escrow.
  Accountability and transparency are of particular interest to me as 
there continues to be unresolved questions surrounding the unfair and 
inconsistent application of a postal regulation more than 5 years ago.
  This particular issue is one I have championed for some time, and 
while I am disappointed that we were unable to reach a resolution 
before the bill reached the House floor, I look forward to working with 
the committee and the Pennsylvania Senators on the issue of

[[Page 17614]]

postal reform legislation moves into conference.
  Comprehensive legislation is 10 years in the making; and without the 
passage of this bill, we are putting in jeopardy millions of American 
jobs and the future availability of affordable mail service, the 
repercussions of which will be felt well beyond the mailing industry.
  In the last session of Congress when I was a member of the 
Subcommittee on Postal Reform and the Committee on Government Reform, 
we worked on this bill. I am pleased it has come before us, and I urge 
my colleagues to support H.R. 22.
  Mr. DAVIS of Illinois. Mr. Chairman, I yield 2 minutes to the 
gentleman from Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. Mr. Chairman, I came to Congress to help the Federal 
Government be a better partner and make communities more livable. One 
of the simplest ways to achieve that objective does not require new 
rules or regulations. It simply requires that the Federal Government 
follow the same rules as others.
  Well, H.R. 22 contains language from the Community Postal Partnership 
Act which I first introduced in the 105th Congress. It requires the 
Postal Service to abide by the same zoning and land use laws as 
everybody else and requires that the Postal Service garner input from 
communities on proposed changes for facilities.
  We have had tremendous support for this concept, from homebuilders, 
the National Association of Postmasters, the Trust for Historic 
Preservation, Realtors, landscape architects, planners, and from within 
the postal community itself.
  Good government organizations across the country have joined with 
mayors and local officials who understand that the over-37,000 postal 
facilities are not just remote outposts of Federal activity. They can, 
often are, and always should be centers of community activity.
  This legislation has had bipartisan support from the majority of the 
House of Representatives and has passed the Senate, only to become 
victim of the politics of postal reform which I am pleased the 
committee has been able to sort out.
  It is time, however, to make this relationship something that every 
community can count on. It should not be the exception, nor should it 
require extraordinary political action. There should be no variation in 
the commitment to provide the finest facilities that are part of each 
and every community. I am happy that the committee has chosen to 
include this language in the comprehensive postal reform bill.
  In turn, I think it is essential that we recognize the valuable 
service provided by the Postal Service. It delivers more items in one 
day than Fed Ex does in a year; it manages half the world's mail with 
one-fourth of the revenue and a fifth of the workforce. It is important 
that we not just applaud these accomplishments, but give the Postal 
Service the tools it needs to continue to deliver its valuable service.
  This bill accomplishes that goal. It is a delicately balanced 
compromise which I hope the House will support, rejecting amendments 
that would upset that balance, and build on this for a better Postal 
Service in the future.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I reserve the balance of my 
time.
  Mr. DAVIS of Illinois. Mr. Chairman, I yield 4 minutes to the 
gentleman from Maryland (Mr. Hoyer).
  Mr. HOYER. Mr. Chairman, I thank the gentleman for yielding me this 
time and rise in support of H.R. 22. It is a good bill that should be 
enacted this year.
  I applaud the gentleman from Illinois (Mr. Davis) and the ranking 
member, the gentleman from California (Mr. Waxman), and the gentleman 
from New York (Mr. McHugh). The gentleman from New York (Mr. McHugh) 
has made a career of this bill, and we are thankful for that. He is not 
on the floor, but I want to congratulate him on his efforts.
  Just a few months ago, the Committee on Government Reform marked up 
and passed this bill 39-0. Given the current political environment, 
that is amazing. An extraordinary achievement. Such bipartisanship on 
Capitol Hill is all too rare these days. When it happens, we should 
take note. The fact that every Democrat and Republican on the committee 
embraced H.R. 22 testifies to the need for postal reform that puts 
politics aside and focuses on pressing issues.
  It is also a tribute to the hard work and energy that postal 
employees, business groups, and postal customers brought to bear 
educating lawmakers about the merits of reform.
  Let me say something as an aside. The United States Postal Service is 
the most efficient and productive postal service in the world. It may 
surprise some to learn that some years ago when I took testimony in the 
Treasury Postal Subcommittee as chairman, the United States Postal 
Service was 40 percent more efficient than the number two postal 
service in the world which was Japan. I observed if we had that kind of 
productivity efficiency with respect to VCRs, we would not be buying 
JVCs, we would be buying RCAs made in America or Emerson or some other 
manufacturer.
  Why has H.R. 22 earned my support and the support of a bipartisan 
group? Simply put, because it satisfies four areas. First, it protects 
universal service. That is absolutely essential. Secondly, it protects 
collective bargaining. Since the Postal Reorganization Act of 1970 
established collective bargaining as a fundamental right, there has not 
been a single work stoppage or significant disruption in service as a 
result of labor-management discord. It is appropriate to protect it and 
continue it.
  I noticed the gentleman from New York (Mr. McHugh) is back on the 
floor. I congratulate the gentleman. I said how steadfast you have been 
in the face of coming right up to the brink of passage and then having 
to withdraw. We all owe you a debt of gratitude and appreciation for 
the work you have done on this particular piece of legislation.
  H.R. 22 ensures the Postal Service is treated exactly the same way 
every other Federal agency is in the area of military pensions. Our 
postal workers who served in the military served America, not the 
Postal Service, America. It is the U.S. Government that ought to 
compensate those military veterans. H.R. 22 mandates that the 
proportion of their retirement that comes from military service will be 
paid for by the Treasury, as it should be.
  Lastly, H.R. 22 provides the Postal Service the flexibility it needs 
to set postal rates in a competitive manner. This is a difficult area. 
I know the committee has grappled with it, but I think the committee 
has come out with a solution that ought to be supported. There is no 
legislative reason why postal reform should not be enacted before the 
end of the year.
  Unfortunately, however, I understand the administration has signaled 
its opposition to key provisions of H.R. 22 and its Senate counterpart 
S. 662. It is my hope and, yes, my expectation, that the gentleman from 
Virginia (Mr. Tom Davis), the gentleman from New York (Mr. McHugh), and 
the gentleman from Illinois (Mr. Davis) will be successful in resisting 
efforts by the administration to weaken or repeal provisions that are 
the product of years of hard bipartisan work.
  I urge support of this product. I again congratulate the gentleman 
from New York (Mr. McHugh) on the work he has so ably led for so long.
  Mr. DAVIS of Illinois. Mr. Chairman, I yield 2 minutes to the 
gentleman from Massachusetts (Mr. Lynch).
  Mr. LYNCH. Mr. Chairman, I rise in support of H.R. 22. This will be 
the first major postal reform bill to receive our consideration in 35 
years. I would like to, obviously, credit the gentleman from Virginia 
(Chairman Tom Davis) and the gentleman from New York (Mr. McHugh), the 
subcommittee chairman, for their great work as well as the ranking 
member, the gentleman from California (Mr. Waxman), and the gentleman 
from Illinois (Mr. Davis) for all of the great work they have done.
  But I would be remiss if I did not mention the number of other people

[[Page 17615]]

who have worked so hard on this, namely, the postal employees 
themselves who have been very active in this whole process, including 
the leadership of the American Postal Workers Union, the National 
Letter Carriers Union, and the National Mail Handlers Union who have 
been active and committed to this whole process.
  All of us will remember in the days and weeks following September 11, 
we had a series of anthrax attacks conducted through the U.S. mail 
system. Tragically, among the victims of these attacks were included 
the lives of two of our postal workers, Joseph Curseen, Jr., and Thomas 
Morris, Jr., at the Brentwood facility in the D.C. area.
  At that time, all of our postal workers, every clerk, every mail 
handler, was faced with a difficult choice, and that choice was to 
continue to come to work every day in a very difficult environment 
caused by anthrax exposure, and perhaps even endangering their 
families; or staying away from work and thereby risking the stability 
of our own economy and upsetting the flow of commerce and shaking the 
confidence of the American people.
  The American postal workers, every clerk, every carrier, every mail 
handler chose to come to work under those conditions. They came here 
because they felt it was their particular patriotic duty to do so. H.R. 
22 takes note of their service and regards postal employees as partners 
and a great asset toward affecting postal reform.
  Notably, this bill does not seek to curtail essential worker rights, 
it does not reduce worker protections with respect to collective 
bargaining, and it deserves our support. I ask only that we resist any 
amendments that would weaken this bill.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I reserve the balance of my 
time.
  Mr. DAVIS of Illinois. Mr. Chairman, I yield 3 minutes to the 
gentleman from California (Mr. Schiff) for a colloquy.
  Mr. SCHIFF. Mr. Chairman, I rise today to express my support for H.R. 
22 and for the purpose of engaging the chairman and the gentleman in a 
brief colloquy.
  H.R. 22 is long overdue and goes a long way towards ensuring the 
future competitiveness and viability of the U.S. Post Office. I am 
proud to cosponsor this important piece of legislation, and I encourage 
my colleagues to support its passage.
  One issue of concern to me, however, has to do with the consolidation 
and realignment of postal facilities. I believe it is critical that 
Congress and the U.S. Postal Service understand that the closing of a 
postal facility has a great impact on its local community. I remain 
concerned that the U.S. Postal Service's realignment and consolidation 
plan may not fully take into account all of the costs associated with 
each individual facility impacted by such a plan.
  Clearly, there are benefits to the consolidation and realignment of 
postal operations, but I rise today to ask the chairman and the ranking 
member and the gentleman from Illinois (Mr. Davis) for their support in 
working with the Postal Service to make sure that all impacts are taken 
into account, not just those that are fiscal in nature. It is critical 
that Congress understands the closing of a postal facility has a very 
great impact on its local community.
  Mr. DAVIS of Illinois. Mr. Chairman, will the gentleman yield?
  Mr. SCHIFF. I yield to the gentleman from Illinois.
  Mr. DAVIS of Illinois. Mr. Chairman, I appreciate the gentleman's 
desire to see that the Postal Service takes into account the impact on 
local communities. I share his desire for a comprehensive evaluation of 
all issues regarding the realignment and consolidation of postal 
facilities, including individual impact on our local communities.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, will the gentleman yield?
  Mr. SCHIFF. I yield to the gentleman from Virginia.

                              {time}  1945

  Mr. TOM DAVIS of Virginia. Mr. Chairman, I thank the gentleman from 
California for his support of this legislation and his efforts. I think 
it is important, as he points out, that all of these different impacts 
are taken into account when the Postal Service undertakes the 
realignment and consolidation of postal facilities. I look forward to 
working with him and the Postal Service as these unfold.
  Mr. DAVIS of Illinois. Mr. Chairman, I yield myself such time as I 
may consume.
  We have heard a great deal of discussion, all good, and again I think 
it is important that we realize that it took the coming together not 
only of dedicated Members of the House, but also tremendous staff work. 
I know that the gentleman from California (Mr. Waxman) is not here at 
the moment, but I want to take the time to commend not only him, but 
his staff, Phil Schiliro, Phil Barnett, Naomi Seiler, Althea Gregory, 
as well as the members of my staff, Richard Boykin, Jill Hunter-
Williams, and, of course, Denise Wilson, who have worked tirelessly and 
tirelessly for months and some of them even into years of trying to 
make sure that we shaped a comprehensive bill, one that all of the 
stakeholders and shareholders could, in fact, agree with and be proud 
of, one that did, in fact, continue to protect universal service, 
everyday delivery, knowing that people can get their mail no matter 
where they live, whether it is on a remote countryside, up the 
mountain, across the way, across the river, knowing that the mail is 
going to come.
  Again, I want to commend, as we have done so often, and not without 
reason, the hard work and continuous dedication of the gentleman from 
New York (Mr. McHugh), who almost single-mindedly and sometimes people 
would say single-handedly has kept this train rolling, has kept this 
ship going, and has prevented it from veering off course. I am very 
pleased to have been a part of the process. I again commend all of 
those for making it happen.
  Mr. Chairman, I urge strong support for the passage of this important 
piece of legislation.
  Mr. Chairman, I reserve the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 1\1/2\ minutes to 
the gentlewoman from Texas (Ms. Jackson-Lee).
  Mr. DAVIS of Illinois. Mr. Chairman, I yield 1 minute to the 
gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I want to acknowledge the 
gentleman from New York (Mr. McHugh) and the authors of this very, very 
strong legislation that has taken us more than a decade. To the 
gentleman from Virginia (Mr. Tom Davis), to the gentleman from 
California (Mr. Waxman), to the gentleman from Illinois (Mr. Davis), 
who have worked extremely hard on this issue, might I add my applause 
and congratulations.
  Might I, Mr. Chairman, to the distinguished chairman of the full 
committee just say one thing. Might I thank the many, many postal 
workers around America who have been there when you needed them and who 
have managed to do a major industry with less than a third of the 
personnel. They are to be congratulated. I thank you very much, and I 
thank you for your interest in discussing the issue of whistleblower 
protection for Federal employees in the context of considering H.R. 22 
today. I do want to recognize that you have in the bill itself 
provisions dealing with the inspector general.
  Let me, first of all, say that I would have offered an amendment 
today, but I want the supporters of that amendment, those who have 
advocated for the No Fear Act that was passed by this body, legislation 
authored by myself and the gentleman from Wisconsin (Mr. Sensenbrenner) 
and signed by the President, that my amendment would have tracked the 
No Fear Act, which would have established a Civil Rights and Civil 
Liberties Board pilot program within the Postal Service to monitor and 
enforce claims of abuse that would call for congressional review after 
3 years. There is a grave need for such a body not only within the 
Postal Service, but in every Federal agency given the poor 
implementation of the No Fear Act. This public

[[Page 17616]]

law is known as Public Law 107-174. I understand that the legislation 
as currently drafted contains, as I said, several new provisions that 
would protect Federal employees and minorities such as the antikickback 
provisions, increase oversight functions for the inspector general, and 
a study of the Board of Governors of the number of contracts awarded to 
women and minority contractors. I applaud the gentleman for this.
  My real point is that the No Fear Act has been slowly implemented. 
There are people in the government, workers in the government that we 
respect for their service wanting us to give oversight on the No Fear 
Legislation. I would like to work with the gentlemen as they go through 
conference, and as we go forward to ensure that this particular 
legislation is implemented, and enhanced civil rights are given to 
federal employees and our fine postal workers have the whistleblower 
protection and as well their civil liberties and civil rights are also 
protected.
  Mr. Chairman, I rise in support of the H.R. 22. It is important that 
it was brought through Committee and to the Floor for expeditious 
consideration. I have an amendment that was made in order that would 
seek to address the very critical issue of slow implementation of 
Public Law No. 107-174, the No FEAR Act (5 U.S.C. 2301) and provide 
avenues of relief for the many federal employees who continue to 
complain of workplace civil rights abuse.
  My amendment would establish a Civil Rights and Civil Liberties Board 
Pilot Program within the Postal Service to monitor and enforce claims 
of abuse that will call for congressional review after three years. 
There is a grave need for such a body--not only within the Postal 
Service but in every federal agency, given the poor implementation of 
the No FEAR Act.
  I joined Chairman Sensenbrenner and Ranking Member John Conyers in 
authorizing the Notification and Federal Employee Anti-Discrimination 
and Retaliation Act of 2002, or No Fear Act, that was signed into law 
by President Bush on May 15, 2002. This legislation was passed in order 
to bring immediate relief to federal government employees who have 
suffered from civil rights or other abuse in the workplace.
  The product that we have before us today has many highlights. For the 
Postal Service, it provides the ratemaking flexibility and incentives 
needed to operate as an efficient business. For businesses, it provides 
the rate stability, fair competition rules, financial transparency, and 
procurement protections needed to predict costs and operate on a level 
playing field. For consumers, it preserves universal service, maintains 
high quality standards, and eliminates unfair mailing costs so that 
they have an affordable and reliable means of communication. For 
workers, it protects collective bargaining and offers whistle-blower 
protections that are needed to ensure safe employment. For taxpayers, 
it ensures the viability of a national asset and removes the threat of 
a tax-payer bailout of the Postal Service due to financial insolvency. 
These provisions, I am sure, will go a long way toward helping the 
Postal Service to better serve its customers, compete fairly with the 
mailing industry, and contribute to our nation.
  In addition, I am pleased that the bill requires a study of the 
number of contracts with women, minorities, and small businesses and 
that it protects our domestic airlines from outsourcing of jobs to 
foreign air carriers.
  Nevertheless, the issue of slow implementation of No FEAR remains a 
tremendous problem that I hope the Chairman, Ranking Member, and the 
members of the Committee on Government Reform will pursue both as this 
bill goes to Conference and in hearing forum.
  Mr. Chairman, I support H.R. 22 and hope that the Chairman, Ranking 
Member, and the Conferees on this bill will address the issues that I 
presented with my amendment, and I hope that both the Committee on 
Government Reform as well as that of the Judiciary will hold oversight 
hearings on the implementation of the No Fear Act, and I yield back. It 
is critical that we use opportunities such as is afforded today to 
address the slow implementation of the No Fear Act. I yield back.
  Mr. DAVIS of Illinois. Mr. Chairman, I yield the balance of my time 
to the gentleman from California (Mr. Waxman), the ranking member.
  The CHAIRMAN. The gentleman from California (Mr. Waxman) is 
recognized for 2 minutes.
  Mr. WAXMAN. Mr. Chairman, I want to thank my friend and colleague for 
yielding to me and also, more importantly, for the enormous 
contribution he has made to this legislation along with the gentleman 
from New York (Mr. McHugh) and the gentleman from Virginia (Mr. Tom 
Davis). The four of us have been working very, very closely and 
produced legislation that was unanimously voted out of our committee.
  The legislation is to modernize the structure of the Postal Service. 
It is a $69 billion entity with 700,000 employees. It supports 
industries that produce goods and services worth $900 billion annually. 
For generations Americans have relied on the system for universal 
service for letters and packages.
  Reaching unanimity was not easy. A primary goal of postal reform was 
to give the Postal Service the flexibility it needs to survive in a 
changing and increasingly competitive environment. At the same time, we 
took into account the varied and complex needs of the mailing community 
and the American people. The result is a strong bill with the primary 
goal of allowing the Postal Service to continue to fulfill its 
universal service mission at a reasonable cost.
  The legislation makes a number of key changes, but all of the changes 
in this bill are calibrated to balance out conflicting forces so that 
we could bring everybody on board. That is why this bill, I would urge 
my colleagues to understand, is one that we need to support in its 
entirety and to resist changes, however attractive they may be.
  The bill, in closing, will make sure that the Postal Service can go 
into this 21st century as a viable institution; where it competes, to 
make sure that it will not compete unfairly; and where it is doing its 
job as a unique establishment, it will be handled in a way so that it 
will be run efficiently and effectively for the public good.
  I ask support for the legislation before us.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 30 seconds to the 
gentleman from Connecticut (Mr. Shays), the vice chairman of the 
Committee on Government Reform.
  Mr. SHAYS. Mr. Chairman, I thank the gentleman for yielding time. I 
just want to congratulate him, the ranking member of the committee and 
particularly the gentleman from New York (Mr. McHugh) for what he has 
done for over 10 years in this battle. His effort is awesome. This 
legislation is needed. We believe in universal coverage for mail, but 
know cost savings need to be made. Congratulations to all of you for 
doing such a great job in bringing this legislation before us.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield myself the balance 
of my time.
  It has been said that victory has 1,000 fathers, and defeat is an 
orphan. As we approach a victory on this bill tonight, at least on the 
House side, let me thank some of the fathers. We have talked about some 
of the Members being involved, but thanks also go out to the National 
Association of Manufacturers, the National Federation of Independent 
Business, the Small Business Legislative Council; a group of financial 
service companies like American Express, Bank of America, Capital One, 
Chase, Citigroup, Financial Services Roundtable, J.P. Morgan; groups in 
the newspaper and publisher business like Magazine Publishers of 
America, National Newspaper Association, Printing Industries of 
America, Time, Inc.; labor unions like the American Postal Workers 
Union, National Association of Letter Carriers, National Rural Letter 
Carriers and the National Postal Mail Handlers Association; postal 
management organizations like the National Association of Postmasters, 
National League of Postmasters, National Association of Postal 
Supervisors; postal competitors like United Parcel Express, UPS and 
FedEx; and other organizations like the Alliance of Nonprofit Mailers, 
the Mailers Council, the Parcel Shippers Association, Pitney-Bowes and 
others.
  And on the staff side, Melissa Wojciak, my staff director; Jack 
Callender, who has made his career on the committee the Postal Service; 
Robert Taub, who the gentleman from New York (Mr. McHugh) rightly, I 
think, gives the credit for being the father of this behind the scenes; 
Ellen Brown, Mason Alinger of our staff, Rob Borden, Kristina Sherry, 
Michael Layman,

[[Page 17617]]

Phil Barnett, Michelle Ash, Denise Wilson, Naomi Seiler, Jill Hunter-
Williams and Richard Boykin from the committee as well. All of these 
made major contributions.
  What does this tell us if we pass this legislation? The cost of 
stamps is going up, but if we pass this legislation, it will be nowhere 
near the increases that we will get without this important legislation.
  The need for postal reform is obvious in this case. Failure to act is 
a job-killer. Inaction will jeopardize at least 1.5 million jobs. This 
is a top priority for industry, the mailing industry, a $900-billion-a-
year industry, nearly 9 percent of GDP, its economic value, 9 million 
jobs. Failure to act would be the same as a tax increase on American 
consumers. If we do not seize this moment, we effectively impose a 
significant new tax and a new tax burden on every American who uses 
stamps. If we do not take action, the Postal Service will be forced to 
begin increasing postal rates, starting with 2 cents at the beginning 
of next year. A small business that spends $5,000 annually on postage 
will lose almost $300 a year. An industry like financial services would 
get slammed with over $600 million in increases annually with no 
increase in productivity. And the American public will waste over $20 
billion in unnecessary postage over the next decade. That is why this 
legislation needs to be passed.
  What is wrong with the current Postal Service? We have got some of 
the best and most dedicated workers in the world, as the gentleman from 
Maryland (Mr. Hoyer) and the gentleman from California (Mr. Waxman) and 
others have pointed out, but they are operating under a 30-year-old 
system that completely missed the information technology revolution. It 
is a service that is saddled with $7 billion in workers' comp claims, 
$5 billion in retirement payments and $57 billion in health care costs. 
The statutes governing USPS are some of the most rigid and restrictive 
in the U.S. Code.
  Finally, this means jobs. We can talk about trade and everything 
else, but failure to enact this will cost jobs in every State.
  Let me conclude by saying and echoing what the gentleman from 
California (Mr. Waxman) noted, and that is, this bill is not a perfect 
bill. It is not a perfect bill today. It will not be perfect probably 
when it comes out of conference. But as we look at this, this is a 
finely balanced piece of legislation that today has almost unanimous 
agreement in the industries that are affected, among the workers that 
are affected and among the consumers that are affected.
  We want to keep this balance as this comes to the floor. There are 
some very attractive amendments, well-meaning amendments that are going 
to be offered, but they upset this balance and jeopardize this bill. We 
have in front of us jobs, we have productivity, and we have almost 9 
percent of the gross domestic product of this country at stake if we 
fail to pass this bill. I urge my colleagues to support it.
  Mr. GENE GREEN of Texas. Mr. Chairman, I rise today in support of 
H.R. 22, the Postal Accountability and Enhancement Act. This bill will 
allow for the Postal Service to better serve the American People by 
significantly modernizing its outdated policies.
  The last postal reform bill was signed by President Nixon in 1971 and 
at that time no one could have anticipated all of the technological 
advances our society would create. At that time we all sent letters to 
keep in contact with each other and email was something that we never 
could have imagined. Unfortunately, while we have advanced with the 
times, the Postal Service has been slow to keep up with our advancing 
technology. H.R. 22 will allow the Postal Service to continue providing 
comprehensive universal service, but at a much lower cost.
  This bill is the product of hard work between the labor unions, the 
Postal Service, and the Government Reform Committee. It is a good piece 
of legislation that will give the Postal Service the rate modernization 
it needs and it will create a level playing field for the Postal 
Service to compete with other companies.
  I strongly support this bill not only because my late father in-law 
was a letter carrier, but because the Postal Service has provided a 
vital service to the public for many years. It's time that we allow 
them to modernize so that we may continue to enjoy all of the benefits 
that they have afforded us.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Chairman, I rise today to 
speak in support of The Postal Accountability and Enhancement Act of 
2005.
  As we move into a new phase of technological advancements, now is the 
time for significant reform of our postal system. With over 600-
thousand postal workers, the U.S Postal Service is an essential part of 
today's national economic infrastructure.
  In my home town of Dallas, TX, the roles of postal workers are 
vividly seen in homes, businesses, and even churches. We must have a 
firm commitment to ensuring that these vital public servants have 
guaranteed healthcare and retirement benefits, collective bargaining 
rights, and a decent pay.
  H.R. 22 will bring increased efficiencies to the United States Postal 
Service, and strengthen the long-term viability of universal postal 
services. We must act now to ensure that 6-day a week delivery is 
maintained for all Americans.
  I hope my colleagues will join me in supporting this key piece of 
legislation.
  Mr. BACA. Mr. Chairman, since the days of the pony express, the USPS 
has become a part of the American family.
  Consider the special place of the Postal Service in our society and 
its importance to Americans: to the teenagers waiting by the mailbox 
for the college acceptance letters, to families waiting for letters 
from loved ones serving abroad, to businesses reaching out to new 
customers and to so many others.
  The Postal Service delivers mail six days a week to nearly 140 
million addresses. Every year this number increases by 2 million.
  The Postal Service's unmatched ability to reach every household and 
business in America six days a week is a vital part of the nation's 
infrastructure.
  The Postal Service needs tools to modernize and compete. That is why 
today I am a cosponsor of H.R. 22, the Postal Accountability and 
Enhancement Act.
  This legislation will not only ensure survival of the Postal Service 
but also help preserve universal service at affordable rates for 
American mailing consumers.
  We need to ensure the long-term viability of this $900 billion 
industry and its nine million employees.
  I only wish that we could also pass H.R. 147, the Social Security 
Fairness Act.
  We need to correct the Windfall Elimination Provision, which lowers 
Social Security benefits for retirees who receive a Civil Service 
Retirement System annuity and Social Security benefits from other jobs.
  Too many Postal Service employees have seen their Social Security 
benefits reduced by as much as 55 percent because of the Windfall 
Elimination Provision.
  We also need to fix the Government Pension Offset, so that spouses 
and survivors do not have their benefits reduced.
  Mr. Chairman, H.R. 22 is a good first step and I encourage my 
colleagues to support the bill.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, please include the attached 
exchange of letters between Chairman Don Young of the Committee on 
Transportation and Infrastructure, Chairman F. James Sensenbrenner, Jr. 
of the Committee on the Judiciary, Chairman Bill Thomas of the 
Committee on Ways and Means and myself.

         House of Representatives, Committee on Transportation and 
           Infrastructure,
                                   Washington, DC, April 25, 2005.
     Hon. Tom Davis,
     Chairman, Committee on Government Reform, Rayburn Building, 
         Washington, DC.
       Dear Mr. Chairman: I am writing to you concerning the 
     jurisdictional interest of the Transportation and 
     Infrastructure Committee in matters being considered in H.R. 
     22, the Postal Accountability and Enhancement Act.
       Our Committee recognizes the importance of H.R. 22 and the 
     need for the legislation to move expeditiously. Therefore, 
     while we have a valid claim to jurisdiction over certain 
     provisions of the bill, I will agree not to request a 
     sequential referral. This, of course, is conditional on our 
     mutual understanding that nothing in this legislation or my 
     decision to forego a sequential referral waives, reduces or 
     otherwise affects the jurisdiction of the Transportation and 
     Infrastructure Committee, and that a copy of this letter and 
     of your response acknowledging our valid jurisdictional 
     interest will be included in the Committee report and in the 
     Congressional Record'' when the bill considered on the House 
     Floor.
       The Committee on Transportation and Infrastructure also 
     asks that you support our request to be conferees on the 
     provisions over which we have jurisdiction during any House 
     Senate conference.

[[Page 17618]]

       Thank you for your cooperation in this matter.
           Sincerely,
                                                        Don Young,
                                                         Chairman.
                                  ____
                                  
                                         House of Representatives,


                               Committee on Government Reform,

                                   Washington, DC, April 26, 2005.
     Hon. Don Young,
     Chairman Committee on Transportation Infrastructure, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: Thank you for your recent letter 
     regarding the Committee on Transportation and 
     Infrastructure's jurisdictional interest in H.R. 22, the 
     Postal Accountability and Enhancement Act, and your 
     willingness to forego consideration of H.R. 22 by the 
     Committee on Transportation and Infrastructure.
       I agree that the Committee on Transportation and 
     Infrastructure has a valid jurisdictional interest in H.R. 22 
     and that the committee's jurisdiction will not be adversely 
     affected by your decision to not request a sequential 
     referral of H.R. 22. In addition, I will support your request 
     for the appointment of outside conferees from the Committee 
     on Transportation and Infrastructure to a House-Senate 
     conference committee on this or similar legislation should 
     such a conference be convened.
       As you have requested, I will include a copy of your letter 
     and this response in the Government Reform Committee's report 
     on H.R. 22 and in the Congressional Record during 
     consideration of the legislation on the House floor. Thank 
     you for your assistance as I work towards the enactment of 
     H.R. 22.
           Sincerely,
                                                        Tom Davis,
                                                         Chairman.
                                  ____
                                  
                                         House of Representatives,


                                   Committee on the Judiciary,

                                     Washington, DC, May 12, 2005.
     Hon. Tom Davis,
     Chairman, Committee on Government Reform, House of 
         Representatives, Washington, DC.
       Dear Chairman Davis: In recognition of the desire to 
     expedite floor consideration of H.R. 22, the ``Postal 
     Accountability and Enhancement Act,'' the Committee on the 
     Judiciary hereby waives consideration of the bill. In so 
     doing, I wish to express my appreciation for your willingness 
     to address an incorporate concerns raised by the Committee on 
     the Judiciary during its markup of similar legislation last 
     Congress.
       There are several provisions contained in H.R. 22 within 
     the Committee on the Judiciary's subject matter jurisdiction. 
     Specifically, section 205 of the legislation revises the 
     complaint and appellate review of the Postal Regulatory 
     Commission. Section 301 establishes an off-budget fund within 
     the Treasury Department for revenues and expenditures 
     associated with services offered by the Postal Service on a 
     competitive basis. Section 303 prohibits the Postal Service 
     from issuing regulations that preclude competition or compel 
     the disclosure of protected intellectual property Section 304 
     ensures that laws regulating the conduct of private 
     commercial activities also apply to competitive activities 
     undertaken by the Postal Service, including the antitrust 
     laws. Section 502 provides authority for the Postal 
     Regulatory Commission to issue subpoenas to compel disclosure 
     of evidence in its proceedings, and to refer failures to 
     adhere to Commission directives to Federal district court. 
     Section 703 requires the Federal Trade Commission to prepare 
     a report detailing how Federal and State laws apply 
     differently to competitive activities of the Postal Service 
     and private companies. Section 801 provides permanent 
     authority for the Postal Service to employ postal police to 
     protect property and persons on Postal Service property, and 
     gives the Attorney General authority to collect penalties and 
     clean up costs associated with the unlawful mailing of 
     hazardous materials.
       The Committee agrees to waive additional consideration of 
     H.R. 22 with the understanding that the Committee's 
     jurisdiction over these provisions is in no way altered or 
     diminished. I also ask that you support my request to be 
     appointed conferee on any provisions over which the Committee 
     on the Judiciary has jurisdiction during any House-Senate 
     conference on this legislation. Finally, I would appreciate 
     your including this letter in Congressional Record during 
     consideration of H.R. 22 on the House floor.
       Thank you for your attention to this request.
           Sincerely,
                                        F. James Sensenbrenner Jr.
                                         House of Representatives,


                               Committee on Government Reform,

                                     Washington, DC, May 12, 2005.
     Hon. F. James Sensenbrenner,
     Chairman, Committee on the Judiciary, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: Thank you for your May 12th letter 
     regarding the Judiciary Committee's jurisdictional interest 
     in H.R. 22, the Postal Accountability and Enhancement Act, 
     and your willingness to forego consideration of H.R. 22 by 
     your committee. As you noted, the Committee on the Judiciary 
     considered a similar bill last Congress, H.R. 4341; and the 
     amendments agreed to by your committee last Congress were 
     significant improvements that were gladly incorporated in 
     H.R. 22 this Congress by Congressman McHugh and myself.
       I agree that the Committee on the Judiciary has a valid 
     jurisdictional interest in H.R. 22 and that the committee's 
     jurisdiction will not be adversely affected by your decision 
     to not call a business meeting to consider H.R. 22. In 
     addition, I will support your request for the appointment of 
     outside conferees from the Committee on the Judiciary to a 
     House-Senate conference committee on this or similar 
     legislation should such a conference be convened.
       As you have requested, I will include a copy of your letter 
     and this response in the Congressional Record during 
     consideration of H.R. 22 on the House floor. Thank you for 
     your assistance as I work towards the enactment of H.R. 22.
           Sincerely,
                                                        Tom Davis,
                                                         Chairman.
                                  ____
                                  
                                         House of Representatives,


                                  Committee on Ways and Means,

                                    Washington, DC, July 25, 2005.
     Hon. Tom Davis,
     Chairman, Committee on Government Reform, Rayburn House 
         Office Building, Washington, DC.
       Dear Chairman Davis: I am writing concerning H.R. 22, the 
     ``Postal Accountability and Enhancement Act,'' which was 
     reported by the Committee on Government Reform on May 27, 
     2005.
       As you know, the Committee on Ways and Means has 
     jurisdiction over matters concerning customs revenue 
     functions. A provision in Section 305 of H.R. 22 directs the 
     Bureau of Customs and Border Protection to apply United 
     States customs laws to certain mail, and thus falls within 
     the jurisdiction of the Committee on Ways and Means. However, 
     in order to expedite this legislation for floor 
     consideration, the Committee will forgo action on this bill. 
     This is being done with the understanding that it does not in 
     any way prejudice the Committee with respect to the 
     appointment of conferees or its jurisdictional prerogatives 
     on this or similar legislation.
       I would appreciate your response to this letter, confirming 
     this understanding with respect to H.R. 22, and would ask 
     that a copy of our exchange of letters on this matter be 
     included in the Congressional Record during floor 
     consideration.
           Best regards,
                                                      Bill Thomas,
     Chairman.
                                  ____

                                         House of Representatives,


                               Committee on Government Reform,

                                    Washington, DC, July 25, 2005.
     Hon. William M. Thomas,
     Chairman, Committee on Ways and Means, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: Thank you for your recent letter 
     regarding the Committee on Ways and Means' jurisdictional 
     interest in H.R. 22, the Postal Accountability and 
     Enhancement Act, and your willingness to forego action on 
     H.R. 22.
       I agree that the Committee on Ways and Means has a valid 
     jurisdictional interest in H.R. 22 and that the committee's 
     jurisdiction will not be adversely affected by your decision 
     to take no action at this time. In addition, I will support 
     your request for the appointment of outside conferees from 
     the Committee on Ways and Means to a House-Senate conference 
     committee on this or similar legislation should such a 
     conference be convened.
       As you have requested, I will include a copy of your letter 
     and this response in the Congressional Record during 
     consideration of the legislation on the House floor. Thank 
     you for your assistance as I work towards the enactment of 
     H.R. 22.
           Sincerely,
                                                        Tom Davis,
                                                         Chairman.

  Mr. REYES. Mr. Chairman, I rise today in strong support of H.R. 22, 
the Postal Accountability and Enhancement Act.
  Employing nine million workers nationwide, many of whom reside in my 
Congressional District of El Paso, Texas, the United States Postal 
Service (USPS) has been delivering hundreds of millions of pieces of 
mail each day keeping an important link of communication open to 
millions of people.
  Many of my constituents from El Paso, Texas who have expressed their 
strong support for postal reform. I share their support and have co-
sponsored the bill before us today.
  Mr. Chairman, this legislation would ensure that the USPS is provided 
with the tools to remain competitive and viable in the 21st century. As 
a co-sponsor of H.R. 22, I would urge all my colleagues to support the 
passage of this important legislation.
  Ms. DeLAURO. Mr. Chairman, I rise in strong support of H.R. 22, the 
Postal Accountability and Enhancement Act. This legislation, which is 
long overdue, will improve commerce in this country, better the lives 
of the nation's postal workers, and guarantee that the mail will be 
delivered each day to the 140 million American households that look 
forward to a daily visit from their letter carrier.

[[Page 17619]]

  In a time of declining revenues and increased costs, it is no secret 
that the Postal Service faces financial challenges. Competition in the 
package-delivery business and from Internet-based communication has 
intensified. And, as a result, each year, the dedicated letter carriers 
of the Postal Service are asked to carry less mail to more households 
and businesses nationwide. In part, that is because the Postal Service 
is operating under laws written 35 years ago--long before anyone had 
ever heard of the Internet.
  This legislation will modernize the Postal Service, giving it the 
resources and flexibility it needs to manage its operations and set 
fair prices. The bill will help the Postal Service cut through the 
bureaucratic red tape and allow it to act more like the businesses it 
must compete against.
  In addition to providing a more streamlined rate-setting process that 
will allow the Postal Service to make business decisions quickly, the 
bill also will allow the Postal Service to enter into partnerships with 
second- and third-class mailers, while preserving the jobs of those at 
postal sorting and processing centers. I welcome these improvements, 
although I anticipate more will need to be done to balance the mailing 
industry's need for price certainty with unanticipated or extraordinary 
fiscal needs of the Postal Service.
  The bill will alleviate a $27 billion burden by limiting the Postal 
Service's responsibility to pay the benefits of veterans who also 
worked in the Postal Service. To be clear, this provision does not 
limit the benefits of our brave veterans who, after military service, 
went to work for the Postal Service. This bill simply says that the 
U.S. Treasury must pay veterans benefits, and the Postal Service must 
pay postal benefits.
  Mr. Chairman, this legislation is also good for one of the Postal 
Service's best assets--its human capital. I am particularly pleased 
that this bill preserves the right of more than 500,000 postal workers 
and letter carriers to bargain collectively. These dedicated men and 
women work in processing centers, they work in local post offices, and 
they work in our neighborhoods delivering the mail to our doorsteps 
each day. They are the reason that the postal service has a 96 percent 
on-time delivery record for first-class mail.
  Mr. Chairman, this is a good bill. It will make the Postal Service 
leaner and more efficient, while preserving the collective bargaining 
rights of its workers. And it will continue the legacy of universal 
service. Since the birth of this nation, the United States Postal 
Service has been committed to delivering the mail to every single 
household in the country--142 million in all today. The daily mail 
delivery is something that many Americans look forward to, and this 
bill will ensure that the Postal Service has the resources it needs to 
maintain that commitment well into the future. I urge my colleagues to 
support this important legislation.
  Mr. BACA. Mr. Chairman, since the days of the pony express, the USPS 
has become a part of the American family.
  Consider the special place of the Postal Service in our society and 
its importance to Americans: to the teenagers waiting by the mailbox 
for the college acceptance letters, to families waiting for letters 
from loved ones serving abroad, to businesses reaching out to new 
customers and to so many others.
  The Postal Service delivers mail six days a week to nearly 140 
million addresses. Every year this number increases by 2 million. The 
Postal Service's unmatched ability to reach every household and 
business in America six days a week is a vital part of the nation's 
infrastructure.
  The Postal Service needs tools to modernize and compete. That is why 
today I am a cosponsor of H.R. 22, the Postal Accountability and 
Enhancement Act. This legislation will not only ensure survival of the 
Postal Service but also help preserve universal service at affordable 
rates for American mailing consumers. We need to ensure the long-term 
viability of this $900 billion industry and its nine million employees. 
I only wish that we could also pass H.R. 147, the Social Security 
Fairness Act.
  We need to correct the Windfall Elimination Provision, which lowers 
Social Security benefits for retirees who receive a Civil Service 
Retirement System annuity and Social Security benefits from other jobs. 
Too many Postal Service employees have seen their Social Security 
benefits reduced by as much as 55% because of the Windfall Elimination 
Provision. We also need to fix the Government Pension Offset, so that 
spouses and survivors do not have their benefits reduced.
  Mr. Chairman, H.R. 22 is a good first step and I encourage my 
colleagues to support the bill.
  Mr. LEACH. Mr. Chairman, I rise in support of the legislation before 
us: the most important postal reform of our generation.
  The specific reforms contained in the bill have been well described 
in the preceding comments of various members, but I would simply like 
to underscore the importance of the United States Postal Service to the 
country, particularly rural America, and emphasize the immense respect 
that citizens have for their mail carriers.
  The United States Postal Service began with the founding of the 
Republic; it grew as the nation grew; it has continuously transformed 
itself with entrepreneurial enterprise and technological innovation.
  Before Henry Ford developed mass assembly techniques in the 
automobile industry, mail carriers on horseback--the pony express--used 
analogous methods of passing along packages to next-step destinations. 
And just as rail cars added speed, labor- and horse-saving capabilities 
to mail delivery in the latter half of the 19th century, the airplane 
has provided the means to bring greater speed and service efficiency in 
the last century. Likewise, at the various decentralized post offices 
and more centralized postal hubs, innovative machinery to help sort and 
distribute the mail has been developed.
  But the unique aspect of mail delivery is that it remains a people-
centric service. Good people make a difference and the Postal Service 
has a heritage of decency and quality of enlployee--from the clerk at 
the counter to the rural mail carrier to postmasters in small towns and 
urban centers. This country takes great pride in their dedication and 
professionalism.
  Now is not the time to either ideologically tamper with the private 
express statutes or saddle the Postal Service with liabilities 
developed by other parts of the government.
  The bottom line is that the United States Postal Service has served 
the country well for more than two centuries. We in the Congress 
respect this record and are obligated to ensure that the viability of 
this universal system is maintained.
  Mr. HOLT. Mr. Chairman, I rise today in support of H.R. 22, The 
Postal Accountability and Enhancement Act.
  In 1775, Members of the Second Continental Congress established the 
Post Office Department, the predecessor of the Postal Service and the 
second oldest federal department or agency in the United States. For 
the past two centuries, the United States Postal Service has evolved 
and changed as the United States has grown. Today the Postal Service 
delivers hundreds of minions of messages each day to more than 141 
million homes and businesses. Still, the Postal Service is experiencing 
economic loss because of the decrease in first class mail volume due to 
the high usage of e-mail and faxes and the increase in operating costs 
as the number of addresses to which the Postal Service must deliver are 
growing everyday.
  For the past couple of decades, Members of the House Government 
Reform Committee have worked together to create legislation to reform 
the Postal Service. The bill that we have before us today is a 
compilation of hard work and bipartisan effort that includes a variety 
of interests such as large financial mailers, mail-dependent small 
businesses, magazine publishers, postal competitors, unions and 
consumer organizations. H.R. 22 provides for a comprehensive overhaul 
of the financial operations, rate structure, and civil service policies 
that currently govern the United States Postal Service. It is important 
to note that this bill today is not only a work of bipartisan 
congressional action, but it is the product of labor unions and 
management, postal employees and businesses, working together to make 
compromises to make postal reform a reality.
  Protecting collective bargaining rights, ensuring six-day a week 
postal delivery and demanding that postal workers receive the best 
federal employee healthcare are all important provisions that were 
included in this bill to benefit postal workers. H.R. 22 is a tribute 
to the countless letter carriers and postal employees who have been 
committed for many years to reforming the USPS. I have spent hours 
walking mail routes with the letter carriers in my home state of New 
Jersey. I have seen first hand how dedicated postal employees are to 
ensuring the timely and safe delivery of mail to their local 
communities. These letter carriers should be applauded for their 
service to all Americans.
  I am proud to have been a cosponsor of the Postal Accountability and 
Enhancement Act and am pleased that my colleagues have finally brought 
this to the House floor. The United States Postal Service is the knit 
between communities across America and I ask my colleagues to pass this 
meaningful postal reform legislation for all Americans.
  Mr. SHAYS. Mr. Chairman, I rise in support of H.R. 22, the Postal 
Accountability and Enhancement Act.
  The Government Reform Committee, of which I am vice-chairman, has 
held hearings

[[Page 17620]]

and briefings on postal reform for several years now, and I am glad to 
see our efforts come to fruition today.
  The United States Postal Service has been forced to cut back on its 
service due to serious financial challenges. H.R. 22 is an effort to 
modernize our Nation's postal laws for the first time in 35 years. It 
is intended to help ensure the United States Postal Service can survive 
in an increasingly competitive marketplace.
  Due to the increasing use of electronic forms of communication, such 
as email, first-class mail volume is declining, but postal addresses 
are increasing. In lieu of simply increasing rates, an entire reform of 
the postal service is necessary.
  H.R. 22 would require the Postal Service to operate in a more 
business-like manner by creating a modem system of rate regulation, 
establishing fair competition rules and a more powerful regulatory 
commission.
  H.R. 22 will also promote both price stability and pricing 
flexibility. Giving the Postal Service pricing flexibility will allow 
USPS to price its core mail products in a way that keeps them 
competitive and, quite literally, in the mail. By limiting the amount 
of future postage rate increases, however, the bill also takes an 
important step towards encouraging the Postal Service to increase mail 
volume and keep the mailbags full while giving mailers predictability 
and stability.
  Universal postal service should be the first and foremost goal of 
reform. This can only be accomplished if the financial and operational 
crisis facing the United States Postal Service is met with innovative 
and bold action.
  Ms. WOOLSEY. Mr. Chairman, it is about time Congress took up this 
important postal reform bill. this legislation is long overdue and I am 
happy a bipartisan compromise was reached that meets the needs of 
postal professionals and the Postal Service.
  For years I have been hearing from letter carriers, postmasters, mail 
handlers and other postal employees about the obstacles that prevent 
them and the postal service from serving our taxpayers in their fullest 
capacity. I have also heard about their struggles to retain their 
benefits and receive a livable wage.
  That's why I am happy to support H.R. 22 today. This postal reform 
legislation takes a positive step for the future of the United States 
Postal Service. Now it will be able to remain competitive while 
protecting hundreds of thousands of jobs held by dedicated workers. 
Universal service will continue to expand and meet the demands of our 
modem mail system. Delivery will improve, rates will become more 
affordable and communities will have better access to mail services.
  Mr. Chairman, again I am pleased that this compromise has advanced, 
and I look forward to an even greater postal system for our Nation.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield back the balance of 
my time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the committee amendment in the nature of a 
substitute printed in the bill shall be considered as an original bill 
for the purpose of amendment under the 5-minute rule and shall be 
considered read.
  The text of the committee amendment in the nature of a substitute is 
as follows:

                                H.R. 22

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Postal 
     Accountability and Enhancement Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                 TITLE I--DEFINITIONS; POSTAL SERVICES

Sec. 101. Definitions.
Sec. 102. Postal services.
Sec. 103. Financial transparency.

                    TITLE II--MODERN RATE REGULATION

Sec. 201. Provisions relating to market-dominant products.
Sec. 202. Provisions relating to competitive products.
Sec. 203. Provisions relating to experimental and new products.
Sec. 204. Reporting requirements and related provisions.
Sec. 205. Complaints; appellate review and enforcement.
Sec. 206. Workshare discounts.
Sec. 207. Clerical amendment.

           TITLE III--PROVISIONS RELATING TO FAIR COMPETITION

Sec. 301. Postal Service Competitive Products Fund.
Sec. 302. Assumed Federal income tax on competitive products income.
Sec. 303. Unfair competition prohibited.
Sec. 304. Suits by and against the Postal Service.
Sec. 305. International postal arrangements.
Sec. 306. Redesignation.

                      TITLE IV--GENERAL PROVISIONS

Sec. 401. Qualification requirements for Governors.
Sec. 402. Obligations.
Sec. 403. Private carriage of letters.
Sec. 404. Rulemaking authority.
Sec. 405. Noninterference with collective bargaining agreements, etc.
Sec. 406. Bonus and compensation authority.
Sec. 407. Mediation in collective-bargaining disputes.

                TITLE V--ENHANCED REGULATORY COMMISSION

Sec. 501. Reorganization and modification of certain provisions 
              relating to the Postal Regulatory Commission.
Sec. 502. Authority for Postal Regulatory Commission to issue 
              subpoenas.
Sec. 503. Appropriations for the Postal Regulatory Commission.
Sec. 504. Redesignation of the Postal Rate Commission.
Sec. 505. Officer of the Postal Regulatory Commission representing the 
              general public.

                      TITLE VI--INSPECTORS GENERAL

Sec. 601. Inspector General of the Postal Regulatory Commission.
Sec. 602. Inspector General of the United States Postal Service to be 
              appointed by the President.

                         TITLE VII--EVALUATIONS

Sec. 701. Universal postal service study.
Sec. 702. Assessments of ratemaking, classification, and other 
              provisions.
Sec. 703. Study on equal application of laws to competitive products.
Sec. 704. Greater diversity in Postal Service Executive and 
              administrative schedule management positions.
Sec. 705. Plan for assisting displaced workers.
Sec. 706. Contracts with women, minorities, and small businesses.
Sec. 707. Rates for periodicals.
Sec. 708. Assessment of certain rate deficiencies.
Sec. 709. Network optimization.
Sec. 710. Assessment of future business model of the postal service.
Sec. 711. Study on certain proposed amendments.
Sec. 712. Definition.

     TITLE VIII--MISCELLANEOUS; TECHNICAL AND CONFORMING AMENDMENTS

Sec. 801. Employment of postal police officers.
Sec. 802. Date of postmark to be treated as date of appeal in 
              connection with the closing or consolidation of post 
              offices.
Sec. 803. Provisions relating to benefits under chapter 81 of title 5, 
              United States Code, for officers and employees of the 
              former Post Office Department.
Sec. 804. Obsolete provisions.
Sec. 805. Investments.
Sec. 806. Reduced rates.
Sec. 807. Hazardous matter.
Sec. 808. Provisions relating to cooperative mailings.
Sec. 809. Technical and conforming amendments.

          7TITLE IX--POSTAL PENSION FUNDING REFORM AMENDMENTS

Sec. 901. Civil Service Retirement System.
Sec. 902. Health insurance.
Sec. 903. Repealer.
Sec. 904. Ensuring appropriate use of escrow and military savings.
Sec. 905. Effective dates.

                 TITLE I--DEFINITIONS; POSTAL SERVICES

     SEC. 101. DEFINITIONS.

       Section 102 of title 39, United States Code, is amended by 
     striking ``and'' at the end of paragraph (3), by striking the 
     period at the end of paragraph (4) and inserting a semicolon, 
     and by adding at the end the following:
       ``(5) `postal service' means the carriage of letters, 
     printed matter, or mailable packages, including acceptance, 
     collection, processing, delivery, or other functions 
     supportive or ancillary thereto;
       ``(6) `product' means a postal service with a distinct cost 
     or market characteristic for which a rate or rates are, or 
     may reasonably be, applied;
       ``(7) `rates', as used with respect to products, includes 
     fees for postal services;
       ``(8) `market-dominant product' or `product in the market-
     dominant category of mail' means a product subject to 
     subchapter I of chapter 36;
       ``(9) `competitive product' or `product in the competitive 
     category of mail' means a product subject to subchapter II of 
     chapter 36;
       ``(10) `Consumer Price Index' means the Consumer Price 
     Index for All Urban Consumers published monthly by the Bureau 
     of Labor Statistics of the Department of Labor; and
       ``(11) `year', as used in chapter 36 (other than 
     subchapters I and VI thereof), means a fiscal year.''.

     SEC. 102. POSTAL SERVICES.

       (a) In General.--Section 404 of title 39, United States 
     Code, is amended--
       (1) in subsection (a), by striking paragraph (6) and by 
     redesignating paragraphs (7) through (9) as paragraphs (6) 
     through (8), respectively; and
       (2) by adding at the end the following:
       ``(c) Nothing in this title shall be considered to permit 
     or require that the Postal Service provide

[[Page 17621]]

     any special nonpostal or similar services, except that 
     nothing in this subsection shall prevent the Postal Service 
     from providing any special nonpostal or similar services 
     provided by the Postal Service as of January 4, 2005.''.
       (b) Conforming Amendment.--Section 1402(b)(1)(B)(ii) of the 
     Victims of Crime Act of 1984 (98 Stat. 2170; 42 U.S.C. 
     10601(b)(1)(B)(ii)) is amended by striking ``404(a)(8)'' and 
     inserting ``404(a)(7)''.

     SEC. 103. FINANCIAL TRANSPARENCY.

       (a) In General.--Section 101 of title 39, United States 
     Code, is amended by redesignating subsections (d) through (g) 
     as subsections (e) through (h), respectively, and by 
     inserting after subsection (c) the following:
       ``(d) As an establishment that provides both market-
     dominant and competitive products, the Postal Service shall 
     be subject to a high degree of transparency, including in 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.''.
       (b) Conforming Amendment.--Section 5001 of title 39, United 
     States Code, is amended by striking ``101(e) and (f)'' and 
     inserting ``101(f) and (g)''.

                    TITLE II--MODERN RATE REGULATION

     SEC. 201. PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS.

       (a) In General.--Chapter 36 of title 39, United States 
     Code, is amended by striking sections 3621 and 3622 and 
     inserting the following:

     ``Sec. 3621. Applicability; definitions

       ``(a) Applicability.--This subchapter shall apply with 
     respect to--
       ``(1)(A) single piece first-class letters (both domestic 
     and international);
       ``(B) single piece first-class cards (both domestic and 
     international); and
       ``(C) special services;
       ``(2) all first-class mail not included under paragraph 
     (1);
       ``(3) periodicals;
       ``(4) standard mail;
       ``(5) media mail;
       ``(6) library mail; and
       ``(7) bound printed matter,
     subject to any changes the Postal Regulatory Commission may 
     make under section 3642.
       ``(b) Rule of Construction.--Mail matter referred to in 
     subsection (a) shall, for purposes of this subchapter, be 
     considered to have the meaning given to such mail matter 
     under the mail classification schedule.

     ``Sec. 3622. Modern rate regulation

       ``(a) Authority Generally.--The Postal Regulatory 
     Commission shall, within 24 months after the date of the 
     enactment of this section, by regulation establish (and may 
     from time to time thereafter by regulation revise) a modern 
     system for regulating rates and classes for market-dominant 
     products.
       ``(b) Objectives.--Such system shall be designed to achieve 
     the following objectives:
       ``(1) To establish and maintain a fair and equitable 
     schedule for rates and classification.
       ``(2) To maximize incentives to reduce costs and increase 
     efficiency.
       ``(3) To create predictability and stability in rates.
       ``(4) To maintain high quality service standards.
       ``(5) To allow the Postal Service pricing flexibility.
       ``(6) To assure adequate revenues, including retained 
     earnings, to maintain financial stability.
       ``(7) To reduce the administrative burden of the ratemaking 
     process.
       ``(c) Factors.--In establishing or revising such system, 
     the Postal Regulatory Commission shall take into account--
       ``(1) the value of the mail service actually provided 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;
       ``(2) the direct and indirect postal costs attributable to 
     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;
       ``(3) the effect of rate increases upon the general public, 
     business mail users, and enterprises in the private sector of 
     the economy engaged in the delivery of mail matter other than 
     letters;
       ``(4) the available alternative means of sending and 
     receiving letters and other mail matter at reasonable costs;
       ``(5) the degree of preparation of mail for delivery into 
     the postal system performed by the mailer and its effect upon 
     reducing costs to the Postal Service;
       ``(6) simplicity of structure for the entire schedule and 
     simple, identifiable relationships between the rates or fees 
     charged the various classes of mail for postal services;
       ``(7) the relative value to the people of the kinds of mail 
     matter entered into the postal system and the desirability 
     and justification for special classifications and services of 
     mail;
       ``(8) the importance of providing classifications with 
     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;
       ``(9) the desirability of special classifications from the 
     point of view of both the user and of the Postal Service;
       ``(10) the educational, cultural, scientific, and 
     informational value to the recipient of mail matter; and
       ``(11) the policies of this title as well as such other 
     factors as the Commission deems appropriate.
       ``(d) Allowable Provisions.--The system for regulating 
     rates and classes for market-dominant products may include 
     one or more of the following:
       ``(1) Price caps, revenue targets, or other form of 
     incentive regulation.
       ``(2) Cost-of-service regulation.
       ``(3) Such other form of regulation as the Commission 
     considers appropriate to achieve, consistent with subsection 
     (c), the objectives of subsection (b).
       ``(e) Limitation.--In the administration of this section, 
     the Commission shall not permit the average rate in any 
     subclass of mail to increase at an annual rate greater than 
     the comparable increase in the Consumer Price Index, unless 
     it has, after notice and opportunity for a public hearing and 
     comment, determined that such increase is reasonable and 
     equitable and necessary 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.
       ``(f) Transition Rule.--Until regulations under this 
     section first take effect, rates and classes for market-
     dominant products shall remain subject to modification in 
     accordance with the provisions of this chapter and section 
     407, as such provisions were last in effect before the date 
     of the enactment of this section.''.
       (b) Repealed Sections.--Sections 3623, 3624, 3625, and 3628 
     of title 39, United States Code, are repealed.
       (c) Redesignation.--Chapter 36 of title 39, United States 
     Code (as in effect after the amendment made by section 
     501(a)(2), but before the amendment made by section 202) is 
     amended by striking the heading for subchapter II and 
     inserting the following:

   ``SUBCHAPTER I--PROVISIONS RELATING TO MARKET-DOMINANT PRODUCTS''.

     SEC. 202. PROVISIONS RELATING TO COMPETITIVE PRODUCTS.

       Chapter 36 of title 39, United States Code, is amended by 
     inserting after section 3629 the following:

      ``SUBCHAPTER II--PROVISIONS RELATING TO COMPETITIVE PRODUCTS

     ``Sec. 3631. Applicability; definitions and updates

       ``(a) Applicability.--This subchapter shall apply with 
     respect to--
       ``(1) priority mail;
       ``(2) expedited mail;
       ``(3) mailgrams;
       ``(4) international mail; and
       ``(5) parcel post,

     subject to any changes the Postal Regulatory Commission may 
     make under section 3642.
       ``(b) Definition.--For purposes of this subchapter, the 
     term `costs attributable', as used with respect to a product, 
     means the direct and indirect postal costs attributable to 
     such product.
       ``(c) Rule of Construction.--Mail matter referred to in 
     subsection (a) shall, for purposes of this subchapter, be 
     considered to have the meaning given to such mail matter 
     under the mail classification schedule.

     ``Sec. 3632. Action of the Governors

       ``(a) Authority To Establish Rates and Classes.--The 
     Governors shall establish rates and classes for products in 
     the competitive category of mail in accordance with the 
     requirements of this subchapter and regulations promulgated 
     under section 3633.
       ``(b) Procedures.--
       ``(1) In general.--Rates and classes shall be established 
     in writing, complete with a statement of explanation and 
     justification, and the date as of which each such rate or 
     class takes effect.
       ``(2) Rates or classes of general applicability.--In the 
     case of rates or classes of general applicability in the 
     Nation as a whole or in any substantial region of the Nation, 
     the Governors shall cause each rate and class decision under 
     this section and the record of the Governors' proceedings in 
     connection with such decision to be published in the Federal 
     Register at least 30 days before the effective date of any 
     new rates or classes.
       ``(3) Rates or classes not of general applicability.--In 
     the case of rates or classes not of general applicability in 
     the Nation as a whole or in any substantial region of the 
     Nation, the Governors shall cause each rate and class 
     decision under this section and the record of the proceedings 
     in connection with such decision to be filed with the Postal 
     Regulatory Commission by such date before the effective date 
     of any new rates or classes as the Governors consider 
     appropriate, but in no case less than 15 days.
       ``(4) Criteria.--As part of the regulations required under 
     section 3633, the Postal Regulatory Commission shall 
     establish criteria for determining when a rate or class 
     established under this subchapter is or is not of general 
     applicability in the Nation as a whole or in any substantial 
     region of the Nation.
       ``(c) Transition Rule.--Until regulations under section 
     3633 first take effect, rates and classes for competitive 
     products shall remain subject to modification in accordance 
     with the provisions of this chapter and section 407, as such 
     provisions were as last in effect before the date of the 
     enactment of this section.

     ``Sec. 3633. Provisions applicable to rates for competitive 
       products

       ``The Postal Regulatory Commission shall, within 18 months 
     after the date of the enactment of this section, promulgate 
     (and may from time to time thereafter revise) regulations--

[[Page 17622]]

       ``(1) to prohibit the subsidization of competitive products 
     by market-dominant products;
       ``(2) to ensure that each competitive product covers its 
     costs attributable; and
       ``(3) to ensure that all competitive products collectively 
     make a reasonable contribution to the institutional costs of 
     the Postal Service.''.

     SEC. 203. PROVISIONS RELATING TO EXPERIMENTAL AND NEW 
                   PRODUCTS.

       Subchapter III of chapter 36 of title 39, United States 
     Code, is amended to read as follows:

 ``SUBCHAPTER III--PROVISIONS RELATING TO EXPERIMENTAL AND NEW PRODUCTS

     ``Sec. 3641. Market tests of experimental products

       ``(a) Authority.--
       ``(1) In general.--The Postal Service may conduct market 
     tests of experimental products in accordance with this 
     section.
       ``(2) Provisions waived.--A product shall not, while it is 
     being tested under this section, be subject to the 
     requirements of sections 3622, 3633, or 3642, or regulations 
     promulgated under those sections.
       ``(b) Conditions.--A product may not be tested under this 
     section unless it satisfies each of the following:
       ``(1) Significantly different product.--The product is, 
     from the viewpoint of the mail users, significantly different 
     from all products offered by the Postal Service within the 2-
     year period preceding the start of the test.
       ``(2) Market disruption.--The introduction or continued 
     offering of the product will not create an unfair or 
     otherwise inappropriate competitive advantage for the Postal 
     Service or any mailer, particularly in regard to small 
     business concerns (as defined under subsection (h)).
       ``(3) Correct categorization.--The Postal Service 
     identifies the product, for the purpose of a test under this 
     section, as either market dominant or competitive, consistent 
     with the criteria under section 3642(b)(1). Costs and 
     revenues attributable to a product identified as competitive 
     shall be included in any determination under section 3633(3) 
     (relating to provisions applicable to competitive products 
     collectively).
       ``(c) Notice.--
       ``(1) In general.--At least 30 days before initiating a 
     market test under this section, the Postal Service shall file 
     with the Postal Regulatory Commission and publish in the 
     Federal Register a notice--
       ``(A) setting out the basis for the Postal Service's 
     determination that the market test is covered by this 
     section; and
       ``(B) describing the nature and scope of the market test.
       ``(2) Safeguards.--For a competitive experimental product, 
     the provisions of section 504(g) shall be available with 
     respect to any information required to be filed under 
     paragraph (1) to the same extent and in the same manner as in 
     the case of any matter described in section 504(g)(1). 
     Nothing in paragraph (1) shall be considered to permit or 
     require the publication of any information as to which 
     confidential treatment is accorded under the preceding 
     sentence (subject to the same exception as set forth in 
     section 504(g)(3)).
       ``(d) Duration.--
       ``(1) In general.--A market test of a product under this 
     section may be conducted over a period of not to exceed 24 
     months.
       ``(2) Extension authority.--If necessary in order to 
     determine the feasibility or desirability of a product being 
     tested under this section, the Postal Regulatory Commission 
     may, upon written application of the Postal Service (filed 
     not later than 60 days before the date as of which the 
     testing of such product would otherwise be scheduled to 
     terminate under paragraph (1)), extend the testing of such 
     product for not to exceed an additional 12 months.
       ``(e) Dollar-Amount Limitation.--
       ``(1) In general.--A product may be tested under this 
     section only if the total revenues that are anticipated, or 
     in fact received, by the Postal Service from such product do 
     not exceed $10,000,000 nationwide in any year, subject to 
     paragraph (2) and subsection (g). In carrying out the 
     preceding sentence, the Postal Regulatory Commission may 
     limit the amount of revenues the Postal Service may obtain 
     from any particular geographic market as necessary to prevent 
     market disruption (as defined in subsection (b)(2)).
       ``(2) Exemption authority.--The Postal Regulatory 
     Commission may, upon written application of the Postal 
     Service, exempt the market test from the limit in paragraph 
     (1) if the total revenues that are anticipated, or in fact 
     received, by the Postal Service from such product do not 
     exceed $50,000,000 in any year, subject to subsection (g). In 
     reviewing an application under this paragraph, the Postal 
     Regulatory Commission shall approve such application if it 
     determines that--
       ``(A) the product is likely to benefit the public and meet 
     an expected demand;
       ``(B) the product is likely to contribute to the financial 
     stability of the Postal Service; and
       ``(C) the product is not likely to result in unfair or 
     otherwise inappropriate competition.
       ``(f) Cancellation.--If the Postal Regulatory Commission at 
     any time determines that a market test under this section 
     fails, with respect to any particular product, to meet one or 
     more of the requirements of this section, it may order the 
     cancellation of the test involved or take such other action 
     as it considers appropriate. A determination under this 
     subsection shall be made in accordance with such procedures 
     as the Commission shall by regulation prescribe.
       ``(g) Adjustment for Inflation.--For purposes of each year 
     following the year in which occurs the deadline for the 
     Postal Service's first report to the Postal Regulatory 
     Commission under section 3652(a), each dollar amount 
     contained in this section shall be adjusted by the change in 
     the Consumer Price Index for such year (as determined under 
     regulations of the Commission).
       ``(h) Definition of a Small Business Concern.--The criteria 
     used in defining small business concerns or otherwise 
     categorizing business concerns as small business concerns 
     shall, for purposes of this section, be established by the 
     Postal Regulatory Commission in conformance with the 
     requirements of section 3 of the Small Business Act.
       ``(i) Effective Date.--Market tests under this subchapter 
     may be conducted in any year beginning with the first year in 
     which occurs the deadline for the Postal Service's first 
     report to the Postal Regulatory Commission under section 
     3652(a).

     ``Sec. 3642. New products and transfers of products between 
       the market-dominant and competitive categories of mail

       ``(a) In General.--Upon request of the Postal Service or 
     users of the mails, or upon its own initiative, the Postal 
     Regulatory Commission may change the list of market-dominant 
     products under section 3621 and the list of competitive 
     products under section 3631 by adding new products to the 
     lists, removing products from the lists, or transferring 
     products between the lists.
       ``(b) Criteria.--All determinations by the Postal 
     Regulatory Commission under subsection (a) shall be made in 
     accordance with the following criteria:
       ``(1) The market-dominant category of products shall 
     consist of each product in the sale of which the Postal 
     Service exercises sufficient market power that it can 
     effectively set the price of such product substantially above 
     costs, raise prices significantly, decrease quality, or 
     decrease output, without risk of losing business to other 
     firms offering similar products. The competitive category of 
     products shall consist of all other products.
       ``(2) Exclusion of products covered by postal monopoly.--A 
     product covered by the postal monopoly shall not be subject 
     to transfer under this section from the market-dominant 
     category of mail. For purposes of the preceding sentence, the 
     term `product covered by the postal monopoly' means any 
     product the conveyance or transmission of which is reserved 
     to the United States under section 1696 of title 18, subject 
     to the same exception as set forth in the last sentence of 
     section 409(e)(1).
       ``(3) Additional considerations.--In making any decision 
     under this section, due regard shall be given to--
       ``(A) the availability and nature of enterprises in the 
     private sector engaged in the delivery of the product 
     involved;
       ``(B) the views of those who use the product involved on 
     the appropriateness of the proposed action; and
       ``(C) the likely impact of the proposed action on small 
     business concerns (within the meaning of section 3641(h)).
       ``(c) Transfers of Subclasses and Other Subordinate Units 
     Allowable.--Nothing in this title shall be considered to 
     prevent transfers under this section from being made by 
     reason of the fact that they would involve only some (but not 
     all) of the subclasses or other subordinate units of the 
     class of mail or type of postal service involved (without 
     regard to satisfaction of minimum quantity requirements 
     standing alone).
       ``(d) Notification and Publication Requirements.--
       ``(1) Notification requirement.--The Postal Service shall, 
     whenever it requests to add a product or transfer a product 
     to a different category, file with the Postal Regulatory 
     Commission and publish in the Federal Register a notice 
     setting out the basis for its determination that the product 
     satisfies the criteria under subsection (b) and, in the case 
     of a request to add a product or transfer a product to the 
     competitive category of mail, that the product meets the 
     regulations promulgated by the Postal Regulatory Commission 
     pursuant to section 3633. The provisions of section 504(g) 
     shall be available with respect to any information required 
     to be filed.
       ``(2) Publication requirement.--The Postal Regulatory 
     Commission shall, whenever it changes the list of products in 
     the market-dominant or competitive category of mail, 
     prescribe new lists of products. The revised lists shall 
     indicate how and when any previous lists (including the lists 
     under sections 3621 and 3631) are superseded, and shall be 
     published in the Federal Register.
       ``(e) Notification Requirement.--The Postal Regulatory 
     Commission shall, whenever it reaches a conclusion that a 
     product or products should be transferred between the list of 
     market-dominant products under section 3621 and the list of 
     competitive products under section 3631, immediately notify 
     the appropriate committees of the Congress. No such transfer 
     may take effect less than 12 months after such conclusion.
       ``(f) Prohibition.--Except as provided in section 3641, no 
     product that involves the carriage of letters, printed 
     matter, or mailable packages may be offered by the Postal 
     Service unless it has been assigned to the market-dominant or 
     competitive category of mail (as appropriate) either--
       ``(1) under this subchapter; or
       ``(2) by or under any other provision of law.''.

     SEC. 204. REPORTING REQUIREMENTS AND RELATED PROVISIONS.

       (a) Redesignation.--Chapter 36 of title 39, United States 
     Code (as in effect before the

[[Page 17623]]

     amendment made by subsection (b)) is amended by striking the 
     heading for subchapter IV and inserting the following:

  ``SUBCHAPTER V--POSTAL SERVICES, COMPLAINTS, AND JUDICIAL REVIEW''.

       (b) Reports and Compliance.--Chapter 36 of title 39, United 
     States Code, is amended by inserting after subchapter III the 
     following:

     ``SUBCHAPTER IV--REPORTING REQUIREMENTS AND RELATED PROVISIONS

     ``Sec. 3651. Annual reports by the Commission

       ``(a) In General.--The Postal Regulatory Commission shall 
     submit an annual report to the President and the Congress 
     concerning the operations of the Commission under this title, 
     including the extent to which regulations are achieving the 
     objectives under sections 3622 and 3633, respectively.
       ``(b) Additional Information.--In addition to the 
     information required under subsection (a), each report under 
     this section shall also include, with respect to the period 
     covered by such report, an estimate of the costs incurred by 
     the Postal Service in providing--
       ``(1) postal services to areas of the Nation where, in the 
     judgment of the Postal Regulatory Commission, 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 the Postal Service were not required to provide 
     prompt, reliable, and efficient services to patrons in all 
     areas and all communities, including as required under the 
     first sentence of section 101(b);
       ``(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 the Postal Regulatory Commission, would not 
     otherwise have been provided by the Postal Service but for 
     the requirements of law.

     The Commission shall detail the bases for its estimates and 
     the statutory requirements giving rise to the costs 
     identified in each report under this section.
       ``(c) Information From Postal Service.--The Postal Service 
     shall provide the Postal Regulatory Commission with such 
     information as may, in the judgment of the Commission, be 
     necessary in order for the Commission to prepare its reports 
     under this section.

     ``Sec. 3652. Annual reports to the Commission

       ``(a) Costs, Revenues, and Rates.--Except as provided in 
     subsection (c), the Postal Service shall, no later than 90 
     days after the end of each year, prepare and submit to the 
     Postal Regulatory Commission a report (together with such 
     nonpublic annex thereto as the Commission may require under 
     subsection (e))--
       ``(1) which shall analyze costs, revenues, and rates, using 
     such methodologies as the Commission shall by regulation 
     prescribe, and in sufficient detail to demonstrate that the 
     rates in effect for all products during such year complied 
     with all applicable requirements of this title; and
       ``(2) which shall, for each market-dominant product 
     provided in such year, provide--
       ``(A) market information, including mail volumes; and
       ``(B) measures of the quality of service afforded by the 
     Postal Service in connection with such product, including--
       ``(i) the service standard applicable to such product;
       ``(ii) the level of service (described in terms of speed of 
     delivery and reliability) provided; and
       ``(iii) the degree of customer satisfaction with the 
     service provided.

     The Inspector General shall regularly audit the data 
     collection systems and procedures utilized in collecting 
     information and preparing such report (including any annex 
     thereto and the information required under subsection (b)). 
     The results of any such audit shall be submitted to the 
     Postal Service and the Postal Regulatory Commission.
       ``(b) Information Relating to Workshare Discounts.--
       ``(1) In general.--The Postal Service shall include, in 
     each report under subsection (a), the following information 
     with respect to each market-dominant product for which a 
     workshare discount was in effect during the period covered by 
     such report:
       ``(A) The per-item cost avoided by the Postal Service by 
     virtue of such discount.
       ``(B) The percentage of such per-item cost avoided that the 
     per-item workshare discount represents.
       ``(C) The per-item contribution made to institutional 
     costs.
       ``(2) Workshare discount defined.--For purposes of this 
     subsection, the term `workshare discount' has the meaning 
     given such term under section 3687.
       ``(c) Market Tests.--In carrying out subsections (a) and 
     (b) with respect to experimental products offered through 
     market tests under section 3641 in a year, the Postal 
     Service--
       ``(1) may report summary data on the costs, revenues, and 
     quality of service by market test; and
       ``(2) shall report such data as the Postal Regulatory 
     Commission requires.
       ``(d) Supporting Matter.--The Postal Regulatory Commission 
     shall have access, in accordance with such regulations as the 
     Commission shall prescribe, to the working papers and any 
     other supporting matter of the Postal Service and the 
     Inspector General in connection with any information 
     submitted under this section.
       ``(e) Content and Form of Reports.--
       ``(1) In general.--The Postal Regulatory Commission shall, 
     by regulation, prescribe the content and form of the public 
     reports (and any nonpublic annex and supporting matter 
     relating thereto) to be provided by the Postal Service under 
     this section. In carrying out this subsection, the Commission 
     shall give due consideration to--
       ``(A) providing the public with adequate information to 
     assess the lawfulness of rates charged;
       ``(B) avoiding unnecessary or unwarranted administrative 
     effort and expense on the part of the Postal Service; and
       ``(C) protecting the confidentiality of commercially 
     sensitive information.
       ``(2) Revised requirements.--The Commission may, on its own 
     motion or on request of an interested party, initiate 
     proceedings (to be conducted in accordance with regulations 
     that the Commission shall prescribe) to improve the quality, 
     accuracy, or completeness of Postal Service data required by 
     the Commission under this subsection whenever it shall appear 
     that--
       ``(A) the attribution of costs or revenues to products has 
     become significantly inaccurate or can be significantly 
     improved;
       ``(B) the quality of service data has become significantly 
     inaccurate or can be significantly improved; or
       ``(C) those revisions are, in the judgment of the 
     Commission, otherwise necessitated by the public interest.
       ``(f) Confidential Information.--
       ``(1) In general.--If the Postal Service determines that 
     any document or portion of a document, or other matter, which 
     it provides to the Postal Regulatory Commission in a 
     nonpublic annex under this section or pursuant to subsection 
     (d) contains information which is described in section 410(c) 
     of this title, or exempt from public disclosure under section 
     552(b) of title 5, the Postal Service shall, at the time of 
     providing such matter to the Commission, notify the 
     Commission of its determination, in writing, and describe 
     with particularity the documents (or portions of documents) 
     or other matter for which confidentiality is sought and the 
     reasons therefor.
       ``(2) Treatment.--Any information or other matter described 
     in paragraph (1) to which the Commission gains access under 
     this section shall be subject to paragraphs (2) and (3) of 
     section 504(g) in the same way as if the Commission had 
     received notification with respect to such matter under 
     section 504(g)(1).
       ``(g) Other Reports.--The Postal Service shall submit to 
     the Postal Regulatory Commission, together with any other 
     submission that it is required to make under this section in 
     a year, copies of its then most recent--
       ``(1) comprehensive statement under section 2401(e);
       ``(2) performance plan under section 2803; and
       ``(3) program performance reports under section 2804.

     ``Sec. 3653. Annual determination of compliance

       ``(a) Opportunity for Public Comment.--After receiving the 
     reports required under section 3652 for any year, the Postal 
     Regulatory Commission shall promptly provide an opportunity 
     for comment on such reports by users of the mails, affected 
     parties, and an officer of the Commission who shall be 
     required to represent the interests of the general public.
       ``(b) Determination of Compliance or Noncompliance.--Not 
     later than 90 days after receiving the submissions required 
     under section 3652 with respect to a year, the Postal 
     Regulatory Commission shall make a written determination as 
     to--
       ``(1) whether any rates or fees in effect during such year 
     (for products individually or collectively) were not in 
     compliance with applicable provisions of this chapter (or 
     regulations promulgated thereunder);
       ``(2) whether any performance goals established under 
     section 2803 or 2804 for such year were not met; and
       ``(3) whether any market-dominant product failed to meet 
     any service standard during such year.

     If, with respect to a year, no instance of noncompliance is 
     found under this subsection to have occurred in such year, 
     the written determination shall be to that effect.
       ``(c) If Any Noncompliance Is Found.--If, for a year, a 
     timely written determination of noncompliance is made under 
     subsection (b), the Postal Regulatory Commission shall take 
     appropriate action in accordance with subsections (c)-(e) of 
     section 3662 (as if a complaint averring such noncompliance 
     had been duly filed and found under such section to be 
     justified).
       ``(d) Rebuttable Presumption.--A timely written 
     determination described in the last sentence of subsection 
     (b) shall, for purposes of any proceeding under section 3662, 
     create a rebuttable presumption of compliance by the Postal 
     Service (with regard to the matters described in paragraphs 
     (1) through (3) of subsection (b)) during the year to which 
     such determination relates.

     ``Sec. 3654. Additional financial reporting

       ``(a) Additional Financial Reporting.--
       ``(1) In general.--The Postal Service shall file with the 
     Postal Regulatory Commission beginning with the first full 
     fiscal year following the effective date of this section--
       ``(A) within 35 days after the end of each fiscal quarter, 
     a quarterly report containing the information required by the 
     Securities and Exchange Commission to be included in 
     quarterly reports under sections 13 and 15(d) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)) on 
     Form 10-Q, as such Form (or any successor form) may be 
     revised from time to time;

[[Page 17624]]

       ``(B) within 60 days after the end of each fiscal year, an 
     annual report containing the information required by the 
     Securities and Exchange Commission to be included in annual 
     reports under such sections on Form 10-K, as such Form (or 
     any successor form) may be revised from time to time; and
       ``(C) periodic reports within the time frame and containing 
     the information prescribed in Form 8-K of the Securities and 
     Exchange Commission, as such Form (or any successor form) may 
     be revised from time to time.
       ``(2) Registrant defined.--For purposes of defining the 
     reports required by paragraph (1), the Postal Service shall 
     be deemed to be the `registrant' described in the Securities 
     and Exchange Commission Forms, and references contained in 
     such Forms to Securities and Exchange Commission regulations 
     are incorporated herein by reference, as amended.
       ``(3) Internal control report.--For purposes of defining 
     the reports required by paragraph (1)(B), the Postal Service 
     shall comply with the rules prescribed by the Securities and 
     Exchange Commission implementing section 404 of the Sarbanes-
     Oxley Act of 2002 (15 U.S.C. 7262), beginning with the annual 
     report for fiscal year 2007.
       ``(b) Financial reporting.--
       ``(1) The reports required by subsection (a)(1)(B) shall 
     include, with respect to the Postal Service's pension and 
     post-retirement health obligations--
       ``(A) the funded status of the Postal Service's pension and 
     --postretirement health obligations;
       ``(B) components of the net change in the fund balances and 
     obligations and the nature and cause of any significant 
     changes;
       ``(C) components of net periodic costs;
       ``(D) cost methods and assumptions underlying the relevant 
     actuarial valuations;
       ``(E) the effect of a one-percentage point increase in the 
     assumed health care cost trend rate for each future year on 
     the service and interest costs components of net periodic 
     postretirement health cost and the accumulated obligation;
       ``(F) actual contributions to and payments from the funds 
     for the years presented and the estimated future 
     contributions and payments for each of the following 5 years;
       ``(G) the composition of plan assets reflected in the fund 
     balances; and
       ``(H) the assumed rate of return on fund balances and the 
     actual rates of return for the years presented.
       ``(2)(A) Beginning with reports for the fiscal year 2007, 
     for purposes of the reports required under subparagraphs (A) 
     and (B) of subsection (a)(1), the Postal Service shall 
     include segment reporting.
       ``(B) The Postal Service shall determine the appropriate 
     segment reporting under subparagraph (A) after consultation 
     with the Postal Regulatory Commission.
       ``(c) Treatment.--For purposes of the reports required by 
     subsection (a)(1)(B), the Postal Service shall obtain an 
     opinion from an independent auditor on whether the 
     information listed in subsection (b) is fairly stated in all 
     material respects, either in relation to the basic financial 
     statements as a whole or on a stand-alone basis.
       ``(d) Supporting Matter.--The Postal Regulatory Commission 
     shall have access to the audit documentation and any other 
     supporting matter of the Postal Service and its independent 
     auditor in connection with any information submitted under 
     this section.
       ``(e) Revised Requirements.--The Postal Regulatory 
     Commission may, on its own motion or on request of an 
     interested party, initiate proceedings (to be conducted in 
     accordance with regulations that the Commission shall 
     prescribe) to improve the quality, accuracy, or completeness 
     of Postal Service data required under this section whenever 
     it shall appear that--
       ``(1) the data have become significantly inaccurate or can 
     be significantly improved; or
       ``(2) those revisions are, in the judgment of the 
     Commission, otherwise necessitated by the public interest.
       ``(f) Confidential Information.--
       ``(1) In general.--If the Postal Service determines that 
     any document or portion of a document, or other matter, which 
     it provides to the Postal Regulatory Commission in a 
     nonpublic annex under this section or pursuant to subsection 
     (d) contains information which is described in section 410(c) 
     of this title, or exempt from public disclosure under section 
     552(b) of title 5, the Postal Service shall, at the time of 
     providing such matter to the Commission, notify the 
     Commission of its determination, in writing, and describe 
     with particularity the documents (or portions of documents) 
     or other matter for which confidentiality is sought and the 
     reasons therefor.
       ``(2) Treatment.--Any information or other matter described 
     in paragraph (1) to which the Commission gains access under 
     this section shall be subject to paragraphs (2) and (3) of 
     section 504(g) in the same way as if the Commission had 
     received notification with respect to such matter under 
     section 504(g)(1).''.

     SEC. 205. COMPLAINTS; APPELLATE REVIEW AND ENFORCEMENT.

       Chapter 36 of title 39, United States Code, is amended by 
     striking sections 3662 and 3663 and inserting the following:

     ``Sec. 3662. Rate and service complaints

       ``(a) In General.--Interested persons (including an officer 
     of the Postal Regulatory Commission representing the 
     interests of the general public) who believe the Postal 
     Service is not operating in conformance with the requirements 
     of chapter 1, 4, or 6, or this chapter (or regulations 
     promulgated under any of those chapters) may lodge a 
     complaint with the Postal Regulatory Commission in such form 
     and manner as the Commission may prescribe.
       ``(b) Prompt Response Required.--
       ``(1) In general.--The Postal Regulatory Commission shall, 
     within 90 days after receiving a complaint under subsection 
     (a), either--
       ``(A) begin proceedings on such complaint; or
       ``(B) issue an order dismissing the complaint (together 
     with a statement of the reasons therefor).
       ``(2) Treatment of complaints not timely acted on.--For 
     purposes of section 3663, any complaint under subsection (a) 
     on which the Commission fails to act in the time and manner 
     required by paragraph (1) shall be treated in the same way as 
     if it had been dismissed pursuant to an order issued by the 
     Commission on the last day allowable for the issuance of such 
     order under paragraph (1).
       ``(c) Action Required If Complaint Found to Be Justified.--
     If the Postal Regulatory Commission finds the complaint to be 
     justified, it shall order that the Postal Service take such 
     action as the Commission considers appropriate in order to 
     achieve compliance with the applicable requirements and to 
     remedy the effects of any noncompliance (such as ordering 
     unlawful rates to be adjusted to lawful levels, ordering the 
     cancellation of market tests, ordering the Postal Service to 
     discontinue providing loss-making products, or requiring the 
     Postal Service to make up for revenue shortfalls in 
     competitive products).
       ``(d) Suspension Authority.--The Postal Regulatory 
     Commission may suspend implementation of rates or 
     classifications under section 3632(b)(3) for a limited period 
     of time pending expedited proceedings under this section. In 
     evaluating whether circumstances warrant suspension, the 
     Commission shall consider factors such as (1) whether there 
     is a substantial likelihood that such rate or classification 
     will violate the requirements of chapter 1, 4, or 6, or this 
     chapter (or regulations promulgated under any of those 
     chapters), (2) whether any persons would suffer substantial 
     injury, loss, or damage absent a suspension, (3) whether the 
     Postal Service or any other persons would suffer substantial 
     injury, loss, or damage under a suspension, and (4) the 
     public interest.
       ``(e) Authority to Order Fines in Cases of Deliberate 
     Noncompliance.--In addition, in cases of deliberate 
     noncompliance by the Postal Service with the requirements of 
     this title, the Postal Regulatory Commission may order, based 
     on the nature, circumstances, extent, and seriousness of the 
     noncompliance, a fine (in the amount specified by the 
     Commission in its order) for each incidence of noncompliance. 
     Fines resulting from the provision of competitive products 
     shall be paid out of the Competitive Products Fund 
     established in section 2011. All receipts from fines imposed 
     under this subsection shall be deposited in the general fund 
     of the Treasury of the United States.

     ``Sec. 3663. Appellate review

       ``A person adversely affected or aggrieved by a final order 
     or decision of the Postal Regulatory Commission may, within 
     30 days after such order or decision becomes final, institute 
     proceedings for review thereof by filing a petition in the 
     United States Court of Appeals for the District of Columbia. 
     The court shall review the order or decision in accordance 
     with section 706 of title 5, and chapter 158 and section 2112 
     of title 28, on the basis of the record before the 
     Commission. For purposes of this section, the term `person' 
     includes the Postal Service.

     ``Sec. 3664. Enforcement of orders

       ``The several district courts have jurisdiction 
     specifically to enforce, and to enjoin and restrain the 
     Postal Service from violating, any order issued by the Postal 
     Regulatory Commission.''.

     SEC. 206. WORKSHARE DISCOUNTS.

       (a) In General.--Title 39, United States Code, is amended 
     by adding after section 3686 (as added by section 406) the 
     following:

     ``Sec. 3687. Workshare discounts

       ``(a) In General.--As part of the regulations established 
     under section 3622(a), the Postal Regulatory Commission shall 
     establish rules for workshare discounts that ensure that such 
     discounts do not exceed the cost that the Postal Service 
     avoids as the result of workshare activity, unless--
       ``(1) the discount is--
       ``(A) associated with a new postal service, a change to an 
     existing postal service, or a new workshare initiative 
     related to an existing postal service; and
       ``(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--

[[Page 17625]]

       ``(A) is necessary to mitigate rate shock; and
       ``(B) will be phased out over time; or
       ``(4) the discount is provided in connection with 
     subclasses of mail consisting exclusively of mail matter of 
     educational, cultural, scientific, or informational value.
       ``(b) Report.--Whenever the Postal Service establishes or 
     maintains a workshare discount, the Postal Service shall, at 
     the time it publishes the workshare discount rate, submit to 
     the Postal Regulatory Commission a detailed report that--
       ``(1) explains the Postal Service's reasons for 
     establishing or maintaining the rate;
       ``(2) sets forth the data, economic analyses, and other 
     information relied on by the Postal Service to justify the 
     rate; and
       ``(3) certifies that the discount will not adversely affect 
     rates or services provided to users of postal services who do 
     not take advantage of the discount rate.
       ``(c) Definition.--For purposes of this section, the term 
     `workshare discount' refers to rate discounts provided to 
     mailers for the presorting, prebarcoding, handling, or 
     transportation of mail, as further defined by the Postal 
     Regulatory Commission under section 3622(a).''.
       (b) Clerical Amendment.--The analysis for chapter 36 of 
     title 39, United States Code (as amended by section 207) is 
     amended by adding after the item relating to section 3686 the 
     following:

``3687. Workshare discounts.''.

     SEC. 207. CLERICAL AMENDMENT.

       Chapter 36 of title 39, United States Code, is amended by 
     striking the heading and analysis for such chapter and 
     inserting the following:

            ``CHAPTER 36--POSTAL RATES, CLASSES AND SERVICES


    ``Subchapter I--Provisions relating to market-dominant products

       ``Sec.
       ``3621. Applicability; definitions.
       ``3622. Modern rate regulation.
       ``3626. Reduced rates.
       ``3627. Adjusting free rates.
       ``3629. Reduced rates for voter registration purposes.


      ``Subchapter II--Provisions relating to competitive products

       ``3631. Applicability; definitions and updates.
       ``3632. Action of the Governors.
       ``3633. Provisions applicable to rates for competitive 
           products.
       ``3634. Assumed Federal income tax on competitive products.


 ``Subchapter III--Provisions relating to experimental and new products

       ``3641. Market tests of experimental products.
       ``3642. New products and transfers of products between the 
           market-dominant and competitive categories of mail.


      ``Subchapter IV--Reporting requirements and related provisions

``3651. Annual reports by the Commission.
``3652. Annual reports to the Commission.
``3653. Annual determination of compliance.
``3654. Additional financial reporting.


     ``Subchapter V--Postal services, complaints, and judicial review

``3661. Postal services.
``3662. Rate and service complaints.
``3663. Appellate review.
``3664. Enforcement of orders.


                         ``Subchapter VI--General

``3681. Reimbursement.
``3682. Size and weight limits.
``3683. Uniform rates for books; films, other materials.
``3684. Limitations.
``3685. Filing of information relating to periodical publications.
``3686. Bonus authority.''.

           TITLE III--PROVISIONS RELATING TO FAIR COMPETITION

     SEC. 301. POSTAL SERVICE COMPETITIVE PRODUCTS FUND.

       (a) Provisions Relating to Postal Service Competitive 
     Products Fund and Related Matters.--
       (1) In general.--Chapter 20 of title 39, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 2011. Provisions relating to competitive products

       ``(a) There is established in the Treasury of the United 
     States a revolving fund, to be called the Postal Service 
     Competitive Products Fund, which shall be available to the 
     Postal Service without fiscal year limitation 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 competitive products.

     For purposes of this subsection, the term `costs 
     attributable' has the meaning given such term by section 
     3631.
       ``(b) There shall be deposited in the Competitive Products 
     Fund, subject to withdrawal by the Postal Service--
       ``(1) revenues from competitive products;
       ``(2) amounts received from obligations issued by the 
     Postal Service under subsection (e);
       ``(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.
       ``(c) If the Postal Service determines that the moneys of 
     the Competitive Products Fund are in excess of current needs, 
     it may request the investment of such amounts as it deems 
     advisable by the Secretary of the Treasury in obligations of, 
     or obligations guaranteed by, the Government of the United 
     States, and, with the approval of the Secretary, in such 
     other obligations or securities as it deems appropriate.
       ``(d) With the approval of the Secretary of the Treasury, 
     the Postal Service may deposit moneys of the Competitive 
     Products Fund in any Federal Reserve bank, any depository for 
     public funds, or in such other places and in such manner as 
     the Postal Service and the Secretary may mutually agree.
       ``(e)(1) Subject to the limitations specified in section 
     2005(a), the Postal Service is authorized to borrow money and 
     to issue and sell such obligations as it determines necessary 
     to provide for competitive products and deposit such amounts 
     in the Competitive Products Fund. Any such borrowings by the 
     Postal Service shall be supported and serviced by the 
     revenues and receipts from competitive products and the 
     assets related to the provision of competitive products (as 
     determined under subsection (h) or, for purposes of any 
     period before accounting practices and principles under 
     subsection (h) have been established and applied, the best 
     information available from the Postal Service, including the 
     audited statements required by section 2008(e), but in either 
     case subject to paragraph (5)).
       ``(2) The Postal Service may enter into binding covenants 
     with the holders of such obligations, and with the trustee, 
     if any, under any agreement entered into in connection with 
     the issuance thereof with respect to--
       ``(A) the establishment of reserve, sinking, and other 
     funds;
       ``(B) application and use of revenues and receipts of the 
     Competitive Products Fund;
       ``(C) stipulations concerning the subsequent issuance of 
     obligations or the execution of leases or lease purchases 
     relating to properties of the Postal Service; and
       ``(D) such other matters as the Postal Service considers 
     necessary or desirable to enhance the marketability of such 
     obligations.
       ``(3) The obligations issued by the Postal Service under 
     this section--
       ``(A) shall be in such forms and denominations;
       ``(B) shall be sold at such times and in such amounts;
       ``(C) shall mature at such time or times;
       ``(D) shall be sold at such prices;
       ``(E) shall bear such rates of interest;
       ``(F) may be redeemable before maturity in such manner, at 
     such times, and at such redemption premiums;
       ``(G) may be entitled to such relative priorities of claim 
     on the assets of the Postal Service with respect to principal 
     and interest payments; and
       ``(H) shall be subject to such other terms and conditions;

     as the Postal Service determines.
       ``(4) Obligations issued by the Postal Service under this 
     subsection--
       ``(A) shall be negotiable or nonnegotiable and bearer or 
     registered instruments, as specified therein and in any 
     indenture or covenant relating thereto;
       ``(B) shall contain a recital that they are issued under 
     this section, and such recital shall be conclusive evidence 
     of the regularity of the issuance and sale of such 
     obligations and of their validity;
       ``(C) shall be lawful investments and may be accepted as 
     security for all fiduciary, trust, and public funds, the 
     investment or deposit of which shall be under the authority 
     or control of any officer or agency of the Government of the 
     United States, and the Secretary of the Treasury or any other 
     officer or agency having authority over or control of any 
     such fiduciary, trust, or public funds, may at any time sell 
     any of the obligations of the Postal Service acquired under 
     this section;
       ``(D) shall not be exempt either as to principal or 
     interest from any taxation now or hereafter imposed by any 
     State or local taxing authority; and
       ``(E) except as provided in section 2006(c) of this title, 
     shall not be obligations of, nor shall payment of the 
     principal thereof or interest thereon be guaranteed by, the 
     Government of the United States, and the obligations shall so 
     plainly state.
       ``(5) The Postal Service shall make payments of principal, 
     or interest, or both on obligations issued under this section 
     out of revenues and receipts from competitive products and 
     assets related to the provision of competitive products (as 
     determined under subsection (h) or, for purposes of any 
     period before accounting practices and principles under 
     subsection (h) have been established and applied, the best 
     information available, including the audited statements 
     required by section 2008(e)). For purposes of this 
     subsection, the total assets of the Competitive Products Fund 
     shall be the greater of--
       ``(A) the assets related to the provision of competitive 
     products; or
       ``(B) the percentage of total Postal Service revenues and 
     receipts from competitive products times the total assets of 
     the Postal Service.
       ``(f) The receipts and disbursements of the Competitive 
     Products Fund shall be accorded the same budgetary treatment 
     as is accorded to receipts and disbursements of the Postal 
     Service Fund under section 2009a.
       ``(g) A judgment against the Postal Service or the 
     Government of the United States (or settlement of a claim) 
     shall, to the extent that it arises out of activities of the 
     Postal Service in the provision of competitive products, be 
     paid out of the Competitive Products Fund.
       ``(h)(1) The Secretary of the Treasury, in consultation 
     with the Postal Service and an independent, certified public 
     accounting firm and

[[Page 17626]]

     such other advisors as the Secretary considers appropriate, 
     shall develop recommendations regarding--
       ``(A) the accounting practices and principles that should 
     be followed by the Postal Service with the objectives of (i) 
     identifying and valuing the assets and liabilities of the 
     Postal Service associated with providing, and the capital and 
     operating costs incurred by the Postal Service in providing, 
     competitive products, and (ii) subject to subsection (e)(5), 
     preventing the 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 
     (within the meaning of section 3634).

     Such recommendations shall be submitted to the Postal 
     Regulatory Commission no earlier than 6 months, and no later 
     than 12 months, after the effective date of this section.
       ``(2)(A) Upon receiving the recommendations of the 
     Secretary of the Treasury under paragraph (1), the Commission 
     shall give interested parties, including the Postal Service, 
     users of the mails, and an officer of the Commission who 
     shall be required to represent the interests of the general 
     public, an opportunity to present their views on those 
     recommendations through submission of written data, views, or 
     arguments, with or without opportunity for oral presentation, 
     or in such other manner as the Commission considers 
     appropriate.
       ``(B) After due consideration of the views and other 
     information received under subparagraph (A), the Commission 
     shall by rule--
       ``(i) provide for the establishment and application of the 
     accounting practices and principles which shall be followed 
     by the Postal Service;
       ``(ii) provide for the establishment and application of the 
     substantive and procedural rules described in paragraph 
     (1)(B); and
       ``(iii) provide for the submission by the Postal Service to 
     the Postal Regulatory Commission of annual and other periodic 
     reports setting forth such information as the Commission may 
     require.

     Final rules under this subparagraph shall be issued not later 
     than 12 months after the date on which the Secretary of the 
     Treasury makes his submission to the Commission under 
     paragraph (1) (or by such later date as the Commission and 
     the Postal Service may agree to). The Commission is 
     authorized to promulgate regulations revising such rules.
       ``(C) Reports described in subparagraph (B)(iii) shall be 
     submitted at such time and in such form, and shall include 
     such information, as the Commission by rule requires. The 
     Commission may, on its own motion or on request of an 
     interested party, initiate proceedings (to be conducted in 
     accordance with such rules as the Commission shall prescribe) 
     to improve the quality, accuracy, or completeness of Postal 
     Service data under such subparagraph whenever it shall appear 
     that--
       ``(i) the quality of the information furnished in those 
     reports has become significantly inaccurate or can be 
     significantly improved; or
       ``(ii) those revisions are, in the judgment of the 
     Commission, otherwise necessitated by the public interest.
       ``(D) A copy of each report described in subparagraph 
     (B)(iii) shall also be transmitted by the Postal Service to 
     the Secretary of the Treasury and the Inspector General of 
     the United States Postal Service.
       ``(i) The Postal Service shall render an annual report to 
     the Secretary of the Treasury concerning the operation of the 
     Competitive Products Fund, in which it shall address such 
     matters as risk limitations, reserve balances, allocation or 
     distribution of moneys, liquidity requirements, and measures 
     to safeguard against losses. A copy of its then most recent 
     report under this subsection shall be included with any other 
     submission that it is required to make to the Postal 
     Regulatory Commission under section 3652(g).''.
       (2) Clerical amendment.--The analysis for chapter 20 of 
     title 39, United States Code, is amended by adding after the 
     item relating to section 2010 the following:

``2011. Provisions relating to competitive products.''.

       (b) Technical and Conforming Amendments.--
       (1) Definition.--Section 2001 of title 39, United States 
     Code, is amended by striking ``and'' at the end of paragraph 
     (1), by redesignating paragraph (2) as paragraph (3), and by 
     inserting after paragraph (1) the following:
       ``(2) `Competitive Products Fund' means the Postal Service 
     Competitive Products Fund established by section 2011; and''.
       (2) Capital of the Postal Service.--Section 2002(b) of 
     title 39, United States Code, is amended by striking 
     ``Fund,'' and inserting ``Fund and the balance in the 
     Competitive Products Fund,''.
       (3) Postal service fund.--
       (A) Purposes for which available.--Section 2003(a) of title 
     39, United States Code, is amended by striking ``title.'' and 
     inserting ``title (other than any of the purposes, functions, 
     or powers for which the Competitive Products Fund is 
     available).''.
       (B) Deposits.--Section 2003(b) of title 39, United States 
     Code, is amended by striking ``There'' and inserting ``Except 
     as otherwise provided in section 2011, there''.
       (4) Relationship between the treasury and the postal 
     service.--Section 2006 of title 39, United States Code, is 
     amended--
       (A) in subsection (a), by inserting ``or section 2011'' 
     before ``of this title,'';
       (B) in subsection (b), by inserting ``under section 2005'' 
     before ``in such amounts'' in the first sentence and before 
     ``in excess of such amount.'' in the second sentence; and
       (C) in subsection (c), by inserting ``or section 
     2011(e)(4)(E)'' before ``of this title,''.

     SEC. 302. ASSUMED FEDERAL INCOME TAX ON COMPETITIVE PRODUCTS 
                   INCOME.

       Subchapter II of chapter 36 of title 39, United States 
     Code, as amended by section 202, is amended by adding at the 
     end the following:

     ``Sec. 3634. Assumed Federal income tax on competitive 
       products income

       ``(a) Definitions.--For purposes of this section--
       ``(1) the term `assumed Federal income tax on competitive 
     products income' means the net income tax that 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; and
       ``(2) the term `assumed taxable income from competitive 
     products', with respect to a year, refers to the amount 
     representing what would be the taxable income of a 
     corporation under the Internal Revenue Code of 1986 for the 
     year, if--
       ``(A) the only activities of such corporation were the 
     activities of the Postal Service allocable under section 
     2011(h) to competitive products; and
       ``(B) the only assets held by such corporation were the 
     assets of the Postal Service allocable under section 2011(h) 
     to such activities.
       ``(b) Computation and Transfer Requirements.--The Postal 
     Service shall, for each year beginning with the year in which 
     occurs the deadline for the Postal Service's first report to 
     the Postal Regulatory Commission under section 3652(a)--
       ``(1) compute its assumed Federal income tax on competitive 
     products income for such year; and
       ``(2) transfer from the Competitive Products Fund to the 
     Postal Service Fund the amount of that assumed tax.
       ``(c) Deadline for Transfers.--Any transfer required to be 
     made under this section for a year shall be due on or before 
     the January 15th next occurring after the close of such 
     year.''.

     SEC. 303. UNFAIR COMPETITION PROHIBITED.

       (a) Specific Limitations.--Chapter 4 of title 39, United 
     States Code, is amended by adding after section 404 the 
     following:

     ``Sec. 404a. Specific Limitations

       ``(a) Except as specifically authorized by law, the Postal 
     Service may not--
       ``(1) establish any rule or regulation (including any 
     standard) the effect of which is to preclude competition or 
     establish the terms of competition unless the Postal Service 
     demonstrates that the regulation does not create an unfair 
     competitive advantage for itself or any entity funded (in 
     whole or in part) by the Postal Service;
       ``(2) compel the disclosure, transfer, or licensing of 
     intellectual property to any third party (such as patents, 
     copyrights, trademarks, trade secrets, and proprietary 
     information); or
       ``(3) obtain information from a person that provides (or 
     seeks to provide) any product, and then offer any product or 
     service that uses or is based in whole or in part on such 
     information, without the consent of the person providing that 
     information, unless substantially the same information is 
     obtained (or obtainable) from an independent source or is 
     otherwise obtained (or obtainable).
       ``(b) The Postal Regulatory Commission shall prescribe 
     regulations to carry out this section.
       ``(c) Any party (including an officer of the Commission 
     representing the interests of the general public) who 
     believes that the Postal Service has violated this section 
     may bring a complaint in accordance with section 3662.''.
       (b) Conforming Amendments.--
       (1) General powers.--Section 401 of title 39, United States 
     Code, is amended by striking ``The'' and inserting ``Subject 
     to the provisions of section 404a, the''.
       (2) Specific powers.--Section 404(a) of title 39, United 
     States Code, is amended by striking ``Without'' and inserting 
     ``Subject to the provisions of section 404a, but otherwise 
     without''.
       (c) Clerical Amendment.--The analysis for chapter 4 of 
     title 39, United States Code, is amended by inserting after 
     the item relating to section 404 the following:

``404a. Specific limitations.''.

     SEC. 304. SUITS BY AND AGAINST THE POSTAL SERVICE.

       (a) In General.--Section 409 of title 39, United States 
     Code, is amended by striking subsections (d) and (e) and 
     inserting the following:
       ``(d)(1) For purposes of the provisions of law cited in 
     paragraphs (2)(A) and (2)(B), respectively, the Postal 
     Service--
       ``(A) shall be considered to be a `person', as used in the 
     provisions of law involved; and
       ``(B) shall not be immune under any other doctrine of 
     sovereign immunity from suit in Federal court by any person 
     for any violation of any of those provisions of law by any 
     officer or employee of the Postal Service.
       ``(2) This subsection applies with respect to--
       ``(A) the Act of July 5, 1946 (commonly referred to as the 
     `Trademark Act of 1946' (15 U.S.C. 1051 and following)); and
       ``(B) the provisions of section 5 of the Federal Trade 
     Commission Act to the extent that such section 5 applies to 
     unfair or deceptive acts or practices.
       ``(e)(1) To the extent that the Postal Service, or other 
     Federal agency acting on behalf of or in concert with the 
     Postal Service, engages in conduct with respect to any 
     competitive product, the Postal Service or other Federal 
     agency (as the case may be)--

[[Page 17627]]

       ``(A) shall not be immune under any doctrine of sovereign 
     immunity from suit in Federal court by any person for any 
     violation of Federal law by such agency or any officer or 
     employee thereof; and
       ``(B) shall be considered to be a person (as defined in 
     subsection (a) of the first section of the Clayton Act) for 
     purposes of--
       ``(i) the antitrust laws (as defined in such subsection); 
     and
       ``(ii) section 5 of the Federal Trade Commission Act to the 
     extent that such section 5 applies to unfair methods of 
     competition.
       ``(2) No damages, interest on damages, costs or attorney's 
     fees may be recovered, and no criminal liability may be 
     imposed, under the antitrust laws (as so defined) from any 
     officer or employee of the Postal Service, or other Federal 
     agency acting on behalf of or in concert with the Postal 
     Service, acting in an official capacity.
       ``(3) This subsection shall not apply with respect to 
     conduct occurring before the date of the enactment of this 
     subsection.
       ``(f)(1) Each building constructed or altered by the Postal 
     Service shall be constructed or altered, to the maximum 
     extent feasible as determined by the Postal Service, in 
     compliance with one of the nationally recognized model 
     building codes and with other applicable nationally 
     recognized codes.
       ``(2) Each building constructed or altered by the Postal 
     Service shall be constructed or altered only after 
     consideration of all requirements (other than procedural 
     requirements) of zoning laws, land use laws, and applicable 
     environmental laws of a State or subdivision of a State which 
     would apply to the building if it were not a building 
     constructed or altered by an establishment of the Government 
     of the United States.
       ``(3) For purposes of meeting the requirements of 
     paragraphs (1) and (2) with respect to a building, the Postal 
     Service shall--
       ``(A) in preparing plans for the building, consult with 
     appropriate officials of the State or political subdivision, 
     or both, in which the building will be located;
       ``(B) upon request, submit such plans in a timely manner to 
     such officials for review by such officials for a reasonable 
     period of time not exceeding 30 days; and
       ``(C) permit inspection by such officials during 
     construction or alteration of the building, in accordance 
     with the customary schedule of inspections for construction 
     or alteration of buildings in the locality, if such officials 
     provide to the Postal Service--
       ``(i) a copy of such schedule before construction of the 
     building is begun; and
       ``(ii) reasonable notice of their intention to conduct any 
     inspection before conducting such inspection.

     Nothing in this subsection shall impose an obligation on any 
     State or political subdivision to take any action under the 
     preceding sentence, nor shall anything in this subsection 
     require the Postal Service or any of its contractors to pay 
     for any action taken by a State or political subdivision to 
     carry out this subsection (including reviewing plans, 
     carrying out on-site inspections, issuing building permits, 
     and making recommendations).
       ``(4) Appropriate officials of a State or a political 
     subdivision of a State may make recommendations to the Postal 
     Service concerning measures necessary to meet the 
     requirements of paragraphs (1) and (2). Such officials may 
     also make recommendations to the Postal Service concerning 
     measures which should be taken in the construction or 
     alteration of the building to take into account local 
     conditions. The Postal Service shall give due consideration 
     to any such recommendations.
       ``(5) In addition to consulting with local and State 
     officials under paragraph (3), the Postal Service shall 
     establish procedures for soliciting, assessing, and 
     incorporating local community input on real property and land 
     use decisions.
       ``(6) For purposes of this subsection, the term `State' 
     includes the District of Columbia, the Commonwealth of Puerto 
     Rico, and a territory or possession of the United States.
       ``(g)(1) Notwithstanding any other provision of law, legal 
     representation may not be furnished by the Department of 
     Justice to the Postal Service in any action, suit, or 
     proceeding arising, in whole or in part, under any of the 
     following:
       ``(A) Subsection (d) or (e) of this section.
       ``(B) Subsection (f) or (g) of section 504 (relating to 
     administrative subpoenas by the Postal Regulatory 
     Commission).
       ``(C) Section 3663 (relating to appellate review).
     The Postal Service may, by contract or otherwise, employ 
     attorneys to obtain any legal representation that it is 
     precluded from obtaining from the Department of Justice under 
     this paragraph.
       ``(2) In any circumstance not covered by paragraph (1), the 
     Department of Justice shall, under section 411, furnish the 
     Postal Service such legal representation as it may require, 
     except that, with the prior consent of the Attorney General, 
     the Postal Service may, in any such circumstance, employ 
     attorneys by contract or otherwise to conduct litigation 
     brought by or against the Postal Service or its officers or 
     employees in matters affecting the Postal Service.
       ``(3)(A) In any action, suit, or proceeding in a court of 
     the United States arising in whole or in part under any of 
     the provisions of law referred to in subparagraph (B) or (C) 
     of paragraph (1), and to which the Commission is not 
     otherwise a party, the Commission shall be permitted to 
     appear as a party on its own motion and as of right.
       ``(B) The Department of Justice shall, under such terms and 
     conditions as the Commission and the Attorney General shall 
     consider appropriate, furnish the Commission such legal 
     representation as it may require in connection with any such 
     action, suit, or proceeding, except that, with the prior 
     consent of the Attorney General, the Commission may employ 
     attorneys by contract or otherwise for that purpose.
       ``(h) A judgment against the Government of the United 
     States arising out of activities of the Postal Service shall 
     be paid by the Postal Service out of any funds available to 
     the Postal Service, subject to the restriction specified in 
     section 2011(g).''.
       (b) Technical Amendment.--Section 409(a) of title 39, 
     United States Code, is amended by striking ``Except as 
     provided in section 3628 of this title,'' and inserting 
     ``Except as otherwise provided in this title,''.

     SEC. 305. INTERNATIONAL POSTAL ARRANGEMENTS.

       (a) In General.--Section 407 of title 39, United States 
     Code, is amended to read as follows:

     ``Sec. 407. International postal arrangements

       ``(a) It is the policy of the United States--
       ``(1) to promote and encourage communications between 
     peoples by efficient operation of international postal 
     services and other international delivery services for 
     cultural, social, and economic purposes;
       ``(2) to promote and encourage unrestricted and undistorted 
     competition in the provision of international postal services 
     and other international delivery services, except where 
     provision of such services by private companies may be 
     prohibited by law of the United States;
       ``(3) to promote and encourage a clear distinction between 
     governmental and operational responsibilities with respect to 
     the provision of international postal services and other 
     international delivery services by the Government of the 
     United States and by intergovernmental organizations of which 
     the United States is a member; and
       ``(4) to participate in multilateral and bilateral 
     agreements with other countries to accomplish these 
     objectives.
       ``(b)(1) The Secretary of State shall be responsible for 
     formulation, coordination, and oversight of foreign policy 
     related to 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, except that the Secretary may not conclude 
     any treaty, convention, or other international agreement 
     (including those regulating international postal services) if 
     such treaty, convention, or agreement would, with respect to 
     any competitive product, grant an undue or unreasonable 
     preference to the Postal Service, a private provider of 
     international postal or delivery services, or any other 
     person.
       ``(2) In carrying out the responsibilities specified in 
     paragraph (1), the Secretary of State shall exercise primary 
     authority for the conduct of foreign policy with respect to 
     international postal services and international delivery 
     services, including the determination of United States 
     positions and the conduct of United States participation in 
     negotiations with foreign governments and international 
     bodies. In exercising this authority, the Secretary--
       ``(A) shall coordinate with other agencies as appropriate, 
     and in particular, shall give full consideration to the 
     authority vested by law or Executive order in the Postal 
     Regulatory Commission, the Department of Commerce, the 
     Department of Transportation, and the Office of the United 
     States Trade Representative in this area;
       ``(B) shall maintain continuing liaison with other 
     executive branch agencies concerned with postal and delivery 
     services;
       ``(C) shall maintain continuing liaison with the Committee 
     on Government Reform of the House of Representatives and the 
     Committee on Governmental Affairs of the Senate;
       ``(D) shall maintain appropriate liaison with both 
     representatives of the Postal Service and representatives of 
     users and private providers of international postal services 
     and other international delivery services to keep informed of 
     their interests and problems, and to provide such assistance 
     as may be needed to ensure that matters of concern are 
     promptly considered by the Department of State or (if 
     applicable, and to the extent practicable) other executive 
     branch agencies; and
       ``(E) shall assist in arranging meetings of such public 
     sector advisory groups as may be established to advise the 
     Department of State and other executive branch agencies in 
     connection with international postal services and 
     international delivery services.
       ``(3) The Secretary of State shall establish an advisory 
     committee (within the meaning of the Federal Advisory 
     Committee Act) to perform such functions as the Secretary 
     considers appropriate in connection with carrying out 
     subparagraphs (A) through (D) of paragraph (2).
       ``(c)(1) Before concluding any treaty, convention, or 
     amendment that establishes a rate or classification for a 
     product subject to subchapter I of chapter 36, the Secretary 
     of State shall request the Postal Regulatory Commission to 
     submit a decision on whether such rate or classification is 
     consistent with the standards and criteria established by the 
     Commission under section 3622.
       ``(2) The Secretary shall ensure that each treaty, 
     convention, or amendment concluded

[[Page 17628]]

     under subsection (b) is consistent with a decision of the 
     Commission adopted under paragraph (1), 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.
       ``(d) Nothing in this section shall be considered to 
     prevent the Postal Service from entering into such commercial 
     or operational contracts related to providing international 
     postal services and other international delivery services as 
     it deems appropriate, except that--
       ``(1) any such contract made with an agency of a foreign 
     government (whether under authority of this subsection or 
     otherwise) shall be solely contractual in nature and may not 
     purport to be international law; and
       ``(2) a copy of each such contract between the Postal 
     Service and an agency of a foreign government shall be 
     transmitted to the Secretary of State and the Postal 
     Regulatory Commission not later than the effective date of 
     such contract.
       ``(e)(1) With respect to shipments of international mail 
     that are competitive products within the meaning of section 
     3631 that are exported or imported by the Postal Service, the 
     Bureau of Customs and Border Protection of the Department of 
     Homeland Security and other appropriate 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.
       ``(2) For purposes of this subsection, the term `private 
     company' means a private company substantially owned or 
     controlled by persons who are citizens of the United States.
       ``(3) In exercising the authority pursuant to subsection 
     (b) to conclude new treaties, conventions and amendments 
     related to international postal services and to renegotiate 
     such treaties, conventions and amendments, the Secretary of 
     State shall, to the maximum extent practicable, take such 
     measures as are within the Secretary's control to encourage 
     the governments of other countries to make available to the 
     Postal Service and private companies a range of 
     nondiscriminatory customs procedures that will fully meet the 
     needs of all types of American shippers. The Secretary of 
     State shall consult with the United States Trade 
     Representative and the Commissioner of Customs, Department of 
     Homeland Security in carrying out this paragraph.
       ``(4) The provisions of this subsection shall take effect 6 
     months after the date of the enactment of this subsection or 
     such earlier date as the Bureau of Customs and Border 
     Protection of the Department of Homeland Security may 
     determine in writing.''.
       (b) Effective Date.--Notwithstanding any provision of the 
     amendment made by subsection (a), the authority of the United 
     States Postal Service to establish the rates of postage or 
     other charges on mail matter conveyed between the United 
     States and other countries shall remain available to the 
     Postal Service until--
       (1) with respect to market-dominant products, the date as 
     of which the regulations promulgated under section 3622 of 
     title 39, United States Code (as amended by section 201(a)) 
     take effect; and
       (2) with respect to competitive products, the date as of 
     which the regulations promulgated under section 3633 of title 
     39, United States Code (as amended by section 202) take 
     effect.

     SEC. 306. REDESIGNATION.

       Chapter 36 of title 39, United States Code (as in effect 
     before the amendment made by section 204(a)) is amended by 
     striking the heading for subchapter V and inserting the 
     following:

                      ``SUBCHAPTER VI--GENERAL''.

                      TITLE IV--GENERAL PROVISIONS

     SEC. 401. QUALIFICATION REQUIREMENTS FOR GOVERNORS.

       (a) In General.--Section 202(a) of title 39, United States 
     Code, is amended by striking ``(a)'' and inserting ``(a)(1)'' 
     and by striking the fourth sentence and inserting the 
     following: ``The Governors shall represent the public 
     interest generally, and at least 4 of the Governors shall 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; for purposes of this 
     sentence, an organization or corporation shall be considered 
     to be of substantial size if it employs at least 50,000 
     employees. The Governors shall not be representatives of 
     specific interests using the Postal Service, and may be 
     removed only for cause.''.
       (b) Consultation Requirement.--Section 202(a) of title 39, 
     United States Code, is amended by adding at the end the 
     following:
       ``(2) In selecting the individuals described in paragraph 
     (1) for nomination for appointment to the position of 
     Governor, the President should 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.''.
       (c) Restriction.--Section 202(b) of title 39, United States 
     Code, is amended by striking ``(b)'' and inserting 
     ``(b)(1)'', and by adding at the end the following:
       ``(2)(A) Notwithstanding any other provision of this 
     section, in the case of the office of the Governor the term 
     of which is the first one scheduled to expire at least 4 
     months after the date of the enactment of this paragraph--
       ``(i) such office may not, in the case of any person 
     commencing service after that expiration date, be filled by 
     any person other than an individual chosen from among persons 
     nominated for such office with the unanimous concurrence of 
     all labor organizations described in section 206(a)(1); and
       ``(ii) instead of the term that would otherwise apply under 
     the first sentence of paragraph (1), the term of any person 
     so appointed to such office shall be 3 years.
       ``(B) Except as provided in subparagraph (A), an 
     appointment under this paragraph shall be made in conformance 
     with all provisions of this section that would otherwise 
     apply.''.
       (d) Applicability.--The amendment made by subsection (a) 
     shall not affect the appointment or tenure of any person 
     serving as a Governor of the Board of Governors of the United 
     States Postal Service pursuant to an appointment made before 
     the date of the enactment of this Act, or, except as provided 
     in the amendment made by subsection (c), any nomination made 
     before that date; however, when any such office becomes 
     vacant, the appointment of any person to fill that office 
     shall be made in accordance with such amendment. The 
     requirement set forth in the fourth sentence of section 
     202(a)(1) of title 39, United States Code (as amended by 
     subsection (a)) shall be met beginning not later than 9 years 
     after the date of the enactment of this Act.

     SEC. 402. OBLIGATIONS.

       (a) Purposes for Which Obligations May Be Issued.--The 
     first sentence of section 2005(a)(1) of title 39, United 
     States Code, is amended by striking ``title.'' and inserting 
     ``title, other than any of the purposes for which the 
     corresponding authority is available to the Postal Service 
     under section 2011.''.
       (b) Limitation on Net Annual Increase in Obligations Issued 
     for Certain Purposes.--The third sentence of section 
     2005(a)(1) of title 39, United States Code, is amended to 
     read as follows: ``In any one fiscal year, the net increase 
     in the amount of obligations outstanding issued for the 
     purpose of capital improvements and the net increase in the 
     amount of obligations outstanding issued for the purpose of 
     defraying operating expenses of the Postal Service shall not 
     exceed a combined total of $3,000,000,000.'' .
       (c) Limitations on Obligations Outstanding.--
       (1) In general.--Subsection (a) of section 2005 of title 
     39, United States Code, is amended by adding at the end the 
     following:
       ``(3) For purposes of applying the respective limitations 
     under this subsection, the aggregate amount of obligations 
     issued by the Postal Service which are outstanding as of any 
     one time, and the net increase in the amount of obligations 
     outstanding issued by the Postal Service for the purpose of 
     capital improvements or for the purpose of defraying 
     operating expenses of the Postal Service in any fiscal year, 
     shall be determined by aggregating the relevant obligations 
     issued by the Postal Service under this section with the 
     relevant obligations issued by the Postal Service under 
     section 2011.''.
       (2) Conforming amendment.--The second sentence of section 
     2005(a)(1) of title 39, United States Code, is amended by 
     striking ``any such obligations'' and inserting ``obligations 
     issued by the Postal Service which may be''.
       (d) Amounts Which May Be Pledged, Etc.--
       (1) Obligations to which provisions apply.--The first 
     sentence of section 2005(b) of title 39, United States Code, 
     is amended by striking ``such obligations,'' and inserting 
     ``obligations issued by the Postal Service under this 
     section,''.
       (2) Assets, revenues, and receipts to which provisions 
     apply.--Subsection (b) of section 2005 of title 39, United 
     States Code, is amended by striking ``(b)'' and inserting 
     ``(b)(1)'', and by adding at the end the following:
       ``(2) Notwithstanding any other provision of this section--
       ``(A) the authority to pledge assets of the Postal Service 
     under this subsection shall be available only to the extent 
     that such assets are not related to the provision of 
     competitive products (as determined under section 2011(h) or, 
     for purposes of any period before accounting practices and 
     principles under section 2011(h) have been established and 
     applied, the best information available from the Postal 
     Service, including the audited statements required by section 
     2008(e)); and
       ``(B) any authority under this subsection relating to the 
     pledging or other use of revenues or receipts of the Postal 
     Service shall be available only to the extent that they are 
     not revenues or receipts of the Competitive Products Fund.''.

     SEC. 403. PRIVATE CARRIAGE OF LETTERS.

       (a) In General.--Section 601 of title 39, United States 
     Code, is amended by striking subsection (b) and inserting the 
     following:
       ``(b) A letter may also be carried out of the mails when--
       ``(1) the amount paid for the private carriage of the 
     letter is at least the amount equal to 6 times the rate then 
     currently charged for the 1st ounce of a single-piece first 
     class letter;
       ``(2) the letter weighs at least 12\1/2\ ounces; or
       ``(3) such carriage is within the scope of services 
     described by regulations of the Postal Service (including, in 
     particular, sections 310.1 and 320.2-320.8 of title 39 of the 
     Code of Federal Regulations, as in effect on July 1, 2004) 
     that purport to permit private carriage by suspension of the 
     operation of this section (as then in effect).
       ``(c) Any regulations necessary to carry out this section 
     shall be promulgated by the Postal Regulatory Commission.''.
       (b) Effective Date.--This section shall take effect on the 
     date as of which the regulations

[[Page 17629]]

     promulgated under section 3633 of title 39, United States 
     Code (as amended by section 202) take effect.

     SEC. 404. RULEMAKING AUTHORITY.

       Paragraph (2) of section 401 of title 39, United States 
     Code, is amended to read as follows:
       ``(2) 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 of this title;''.

     SEC. 405. NONINTERFERENCE WITH COLLECTIVE BARGAINING 
                   AGREEMENTS, ETC.

       (a) Noninterference With Collective Bargaining 
     Agreements.--Except as provided in section 407, nothing in 
     this Act or any amendment made by this Act shall restrict, 
     expand, or otherwise affect any of the rights, privileges, or 
     benefits of either employees of or labor organizations 
     representing employees of the United States Postal Service 
     under chapter 12 of title 39, United States Code, the 
     National Labor Relations Act, any handbook or manual 
     affecting employee labor relations within the United States 
     Postal Service, or any collective bargaining agreement.
       (b) Free Mailing Privileges Continue Unchanged.--Nothing in 
     this Act or any amendment made by this Act shall affect any 
     free mailing privileges accorded under section 3217 or 
     sections 3403 through 3406 of title 39, United States Code.

     SEC. 406. BONUS AND COMPENSATION AUTHORITY.

       Subchapter VI of chapter 36 of title 39, United States Code 
     (as so redesignated by section 306) is amended by adding at 
     the end the following:

     ``Sec. 3686. Bonus authority

       ``(a) In General.--The Postal Service may establish one or 
     more programs to provide bonuses or other rewards to officers 
     and employees of the Postal Service in senior executive or 
     equivalent positions to achieve the objectives of this 
     chapter.
       ``(b) Limitation on Total Compensation.--
       ``(1) In general.--Under any such program, the Postal 
     Service may award a bonus or other reward in excess of the 
     limitation set forth in the last sentence of section 1003(a), 
     if such program has been approved under paragraph (2). Any 
     such award or bonus may not cause the total compensation of 
     such officer or employee to exceed the total annual 
     compensation payable to the Vice President under section 104 
     of title 3 as of the end of the calendar year in which the 
     bonus or award is paid.
       ``(2) Approval process.--If the Postal Service wishes to 
     have the authority, under any program described in subsection 
     (a), to award bonuses or other rewards in excess of the 
     limitation set forth in the last sentence of section 
     1003(a)--
       ``(A) the Postal Service shall make an appropriate request 
     to the Board of Governors in such form and manner as the 
     Board requires; and
       ``(B) the Board of Governors shall approve any such request 
     if it certifies, for the annual appraisal period involved, 
     that the performance appraisal system for affected officers 
     and employees of the Postal Service (as designed and applied) 
     makes meaningful distinctions based on relative performance.
       ``(3) Revocation authority.--If the Board of Governors 
     finds that a performance appraisal system previously approved 
     under paragraph (2)(B) does not (as designed and applied) 
     make meaningful distinctions based on relative performance, 
     the Board may revoke or suspend the authority of the Postal 
     Service to continue a program approved under paragraph (2) 
     until such time as appropriate corrective measures have, in 
     the judgment of the Board, been taken.
       ``(c) Exceptions for Critical Positions.--Notwithstanding 
     any other provision of law, the Board of Governors may allow 
     up to 12 officers or employees of the Postal Service in 
     critical senior executive or equivalent positions to receive 
     total compensation in an amount not to exceed 120 percent of 
     the total annual compensation payable to the Vice President 
     under section 104 of title 3 as of the end of the calendar 
     year in which such payment is received. For each exception 
     made under this subsection, the Board shall provide written 
     notification to the Director of the Office of Personnel 
     Management and the Congress within 30 days after the payment 
     is made setting forth the name of the officer or employee 
     involved, the critical nature of his or her duties and 
     responsibilities, and the basis for determining that such 
     payment is warranted.
       ``(d) Information for Inclusion in Comprehensive 
     Statement.--Included in its comprehensive statement under 
     section 2401(e) for any period shall be--
       ``(1) the name of each person receiving a bonus or other 
     payment during such period which would not have been 
     allowable but for the provisions of subsection (b) or (c);
       ``(2) the amount of the bonus or other payment; and
       ``(3) the amount by which the limitation set forth in the 
     last sentence of section 1003(a) was exceeded as a result of 
     such bonus or other payment.
       ``(e) Regulations.--The Board of Governors may prescribe 
     regulations for the administration of this section.''.

     SEC. 407. MEDIATION IN COLLECTIVE-BARGAINING DISPUTES.

       (a) In General.--Section 1207(b) of title 39, United States 
     Code, is amended by striking all that follows ``the Director 
     of the Federal Mediation and Conciliation Service shall'' and 
     inserting ``, within 10 days appoint a mediator of nationwide 
     reputation and professional stature, and who is also a member 
     of the National Academy of Arbitrators. The parties shall 
     cooperate with the mediator in an effort to reach an 
     agreement and shall meet and negotiate in good faith at such 
     times and places that the mediator, in consultation with the 
     parties, shall direct.''.
       (b) Provisions Relating to Arbitration Boards.--Section 
     1207(c) of title 39, United States Code, is amended--
       (1) in paragraph (1)--
       (A) by striking ``90'' and inserting ``60'';
       (B) by striking ``not members of the factfinding panel,''; 
     and
       (C) by striking all that follows ``shall be made'' and 
     inserting ``from a list of names provided by the Director. 
     This list shall consist of not less than 9 names of 
     arbitrators of nationwide reputation and professional 
     stature, who are also members of the National Academy of 
     Arbitrators, and whom the Director has determined are 
     available and willing to serve.''; and
       (2) in paragraph (3), by striking ``factfinding panel'' and 
     inserting ``mediation''.
       (c) Conforming Amendment.--Section 1207(d) of title 39, 
     United States Code, is amended by striking ``factfinding 
     panel will be established'' and inserting ``mediator shall be 
     appointed''.

                TITLE V--ENHANCED REGULATORY COMMISSION

     SEC. 501. REORGANIZATION AND MODIFICATION OF CERTAIN 
                   PROVISIONS RELATING TO THE POSTAL REGULATORY 
                   COMMISSION.

       (a) Transfer and Redesignation.--Title 39, United States 
     Code, is amended--
       (1) by inserting after chapter 4 the following:

               ``CHAPTER 5--POSTAL REGULATORY COMMISSION

``Sec.
``501. Establishment.
``502. Commissioners.
``503. Rules; regulations; procedures.
``504. Administration.

     ``Sec. 501. Establishment

       ``The Postal Regulatory Commission is an independent 
     establishment of the executive branch of the Government of 
     the United States.

     ``Sec. 502. Commissioners

       ``(a) The Postal Regulatory Commission is composed of 5 
     Commissioners, appointed by the President, by and with the 
     advice and consent of the Senate. The Commissioners shall 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. Each individual 
     appointed to the Commission shall have the qualifications and 
     expertise necessary to carry out the responsibilities 
     accorded Commissioners under the Postal Accountability and 
     Enhancement Act. Not more than 3 of the Commissioners may be 
     adherents of the same political party.
       ``(b) A Commissioner may continue to serve after the 
     expiration of his term until his successor has qualified, 
     except that a Commissioner may not so continue to serve for 
     more than 1 year after the date upon which his term otherwise 
     would expire under subsection (e).
       ``(c) One of the Commissioners shall be designated as 
     Chairman by, and shall serve in the position of Chairman at 
     the pleasure of, the President.
       ``(d) The Commissioners shall by majority vote designate a 
     Vice Chairman of the Commission. The Vice Chairman shall act 
     as Chairman of the Commission in the absence of the Chairman.
       ``(e) The Commissioners shall serve for terms of 6 
     years.'';
       (2) in subchapter I of chapter 36 (as in effect before the 
     amendment made by section 201(c)), by striking the heading 
     for such subchapter I and all that follows through section 
     3602; and
       (3) by redesignating sections 3603 and 3604 as sections 503 
     and 504, respectively, and transferring such sections to the 
     end of chapter 5 (as inserted by paragraph (1)).
       (b) Determinations.--Section 503 of title 39, United States 
     Code, as so redesignated by subsection (a)(3), is amended by 
     adding at the end the following: ``Such rules shall include 
     procedures which balance, inter alia, the need for protecting 
     due process rights and ensuring expeditious decision-
     making.''.
       (c) Applicability.--The amendment made by subsection (a)(1) 
     shall not affect the appointment or tenure of any person 
     serving as a Commissioner on the Postal Regulatory Commission 
     (as so redesignated by section 504) pursuant to an 
     appointment made before the date of the enactment of this Act 
     or any nomination made before that date, but, when any such 
     office becomes vacant, the appointment of any person to fill 
     that office shall be made in accordance with such amendment.
       (d) Clerical Amendment.--The analysis for part I of title 
     39, United States Code, is amended by inserting after the 
     item relating to chapter 4 the following:

``5. Postal Regulatory Commission................................501''.

     SEC. 502. AUTHORITY FOR POSTAL REGULATORY COMMISSION TO ISSUE 
                   SUBPOENAS.

       Section 504 of title 39, United States Code (as so 
     redesignated by section 501) is amended by adding at the end 
     the following:
       ``(f)(1) Any Commissioner of the Postal Regulatory 
     Commission, any administrative law judge appointed by the 
     Commission under section 3105 of title 5, and any employee of 
     the Commission designated by the Commission may administer 
     oaths, examine witnesses, take depositions, and receive 
     evidence.

[[Page 17630]]

       ``(2) The Chairman of the Commission, any Commissioner 
     designated by the Chairman, and any administrative law judge 
     appointed by the Commission under section 3105 of title 5 
     may, with respect to any proceeding conducted by the 
     Commission under this title--
       ``(A) issue subpoenas requiring the attendance and 
     presentation of testimony by, or the production of 
     documentary or other evidence in the possession of, any 
     covered person; and
       ``(B) order the taking of depositions and responses to 
     written interrogatories by a covered person.

     The written concurrence of a majority of the Commissioners 
     then holding office shall, with respect to each subpoena 
     under subparagraph (A), be required in advance of its 
     issuance.
       ``(3) In the case of contumacy or failure to obey a 
     subpoena issued under this subsection, upon application by 
     the Commission, the district court of the United States for 
     the district in which the person to whom the subpoena is 
     addressed resides or is served may issue an order requiring 
     such person to appear at any designated place to testify or 
     produce documentary or other evidence. Any failure to obey 
     the order of the court may be punished by the court as a 
     contempt thereof.
       ``(4) For purposes of this subsection, the term `covered 
     person' means an officer, employee, agent, or contractor of 
     the Postal Service.
       ``(g)(1) If the Postal Service determines that any document 
     or other matter it provides to the Postal Regulatory 
     Commission pursuant to a subpoena issued under subsection 
     (f), or otherwise at the request of the Commission in 
     connection with any proceeding or other purpose under this 
     title, contains information which is described in section 
     410(c) of this title, or exempt from public disclosure under 
     section 552(b) of title 5, the Postal Service shall, at the 
     time of providing such matter to the Commission, notify the 
     Commission, in writing, of its determination (and the reasons 
     therefor).
       ``(2) Except as provided in paragraph (3), no officer or 
     employee of the Commission may, with respect to any 
     information as to which the Commission has been notified 
     under paragraph (1)--
       ``(A) use such information for purposes other than the 
     purposes for which it is supplied; or
       ``(B) permit anyone who is not an officer or employee of 
     the Commission to have access to any such information.
       ``(3)(A) Paragraph (2) shall not prevent the Commission 
     from publicly disclosing relevant information in furtherance 
     of its duties under this title if the Commission has adopted 
     regulations under section 553 of title 5 that establish a 
     procedure for according appropriate confidentiality to 
     information identified by the Postal Service under paragraph 
     (1). In determining the appropriate degree of confidentiality 
     to be accorded information identified by the Postal Service 
     under paragraph (1), the Commission shall balance the nature 
     and extent of the likely commercial injury to the Postal 
     Service against the public interest, as required by section 
     101(d) of this title for financial transparency of a 
     government establishment.
       ``(B) Paragraph (2) shall not prevent information from 
     being furnished under any process of discovery established 
     under this title in connection with a proceeding under this 
     title. The Commission shall, by regulations based on rule 
     26(c) of the Federal Rules of Civil Procedure, establish 
     procedures for ensuring appropriate confidentiality for any 
     information furnished under the preceding sentence.''.

     SEC. 503. APPROPRIATIONS FOR THE POSTAL REGULATORY 
                   COMMISSION.

       (a) Authorization of Appropriations.--Subsection (d) of 
     section 504 of title 39, United States Code (as so 
     redesignated by section 501) is amended to read as follows:
       ``(d) There are authorized to be appropriated, out of the 
     Postal Service Fund, such sums as may be necessary for the 
     Postal Regulatory Commission. In requesting an appropriation 
     under this subsection for a fiscal year, the Commission shall 
     prepare and submit to the Congress under section 2009 a 
     budget of the Commission's expenses, including expenses for 
     facilities, supplies, compensation, and employee benefits.''.
       (b) Budget Program.--
       (1) In general.--The next to last sentence of section 2009 
     of title 39, United States Code, is amended to read as 
     follows: ``The budget program shall also include separate 
     statements of the amounts which (1) the Postal Service 
     requests to be appropriated under subsections (b) and (c) of 
     section 2401, (2) the Office of Inspector General of the 
     United States Postal Service requests to be appropriated, out 
     of the Postal Service Fund, under section 8L(e) of the 
     Inspector General Act of 1978, and (3) the Postal Regulatory 
     Commission requests to be appropriated, out of the Postal 
     Service Fund, under section 504(d) of this title.''.
       (2) Conforming amendment.--Section 2003(e)(1) of title 39, 
     United States Code, is amended by striking the first sentence 
     and inserting the following: ``The Fund shall be available 
     for the payment of (A) all expenses incurred by the Postal 
     Service in carrying out its functions as provided by law, 
     subject to the same limitation as set forth in the 
     parenthetical matter under subsection (a); (B) all expenses 
     of the Postal Regulatory Commission, subject to the 
     availability of amounts appropriated pursuant to section 
     504(d); and (C) all expenses of the Office of Inspector 
     General, subject to the availability of amounts appropriated 
     pursuant to section 8L(e) of the Inspector General Act of 
     1978.''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply with respect to fiscal years beginning on or after 
     October 1, 2005.
       (2) Savings provision.--The provisions of title 39, United 
     States Code, that are amended by this section shall, for 
     purposes of any fiscal year before the first fiscal year to 
     which the amendments made by this section apply, continue to 
     apply in the same way as if this section had never been 
     enacted.

     SEC. 504. REDESIGNATION OF THE POSTAL RATE COMMISSION.

       (a) Amendments to Title 39, United States Code.--Title 39, 
     United States Code, is amended in sections 404, 503-504 (as 
     so redesignated by section 501), 1001, and 1002 by striking 
     ``Postal Rate Commission'' each place it appears and 
     inserting ``Postal Regulatory Commission''.
       (b) Amendments to Title 5, United States Code.--Title 5, 
     United States Code, is amended in sections 104(1), 306(f), 
     2104(b), 3371(3), 5314 (in the item relating to Chairman, 
     Postal Rate Commission), 5315 (in the item relating to 
     Members, Postal Rate Commission), 5514(a)(5)(B), 
     7342(a)(1)(A), 7511(a)(1)(B)(ii), 8402(c)(1), 8423(b)(1)(B), 
     and 8474(c)(4) by striking ``Postal Rate Commission'' and 
     inserting ``Postal Regulatory Commission''.
       (c) Amendment to the Ethics in Government Act of 1978.--
     Section 101(f)(6) of the Ethics in Government Act of 1978 (5 
     U.S.C. App.) is amended by striking ``Postal Rate 
     Commission'' and inserting ``Postal Regulatory Commission''.
       (d) Amendment to the Rehabilitation Act of 1973.--Section 
     501(b) of the Rehabilitation Act of 1973 (29 U.S.C. 791(b)) 
     is amended by striking ``Postal Rate Office'' and inserting 
     ``Postal Regulatory Commission''.
       (e) Amendment to Title 44, United States Code.--Section 
     3502(5) of title 44, United States Code, is amended by 
     striking ``Postal Rate Commission'' and inserting ``Postal 
     Regulatory Commission''.
       (f) Other References.--Whenever a reference is made in any 
     provision of law (other than this Act or a provision of law 
     amended by this Act), regulation, rule, document, or other 
     record of the United States to the Postal Rate Commission, 
     such reference shall be considered a reference to the Postal 
     Regulatory Commission.

     SEC. 505. OFFICER OF THE POSTAL REGULATORY COMMISSION 
                   REPRESENTING THE GENERAL PUBLIC.

       (a) In General.--Chapter 5 of title 39, United States Code 
     (as added by this Act) is amended by adding after section 504 
     the following:

     ``Sec. 505. Officer of the Postal Regulatory Commission 
       representing the general public

       ``The Postal Regulatory Commission shall 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.''.
       (b) Clerical Amendment.--The analysis for chapter 5 of 
     title 39, United States Code (as amended by section 
     501(a)(1)) is amended by adding after the item relating to 
     section 504 the following:

``505. Officer of the Postal Regulatory Commission representing the 
              general public.''.

                      TITLE VI--INSPECTORS GENERAL

     SEC. 601. INSPECTOR GENERAL OF THE POSTAL REGULATORY 
                   COMMISSION.

       (a) In General.--Paragraph (2) of section 8G(a) of the 
     Inspector General Act of 1978 is amended by inserting ``the 
     Postal Regulatory Commission,'' after ``the United States 
     International Trade Commission,''.
       (b) Administration.--Section 504 of title 39, United States 
     Code (as so redesignated by section 501) is amended by adding 
     after subsection (g) (as added by section 502) the following:
       ``(h)(1) Notwithstanding any other provision of this title 
     or of the Inspector General Act of 1978, the authority to 
     select, appoint, and employ officers and employees of the 
     Office of Inspector General of the Postal Regulatory 
     Commission, and to obtain any temporary or intermittent 
     services of experts or consultants (or an organization of 
     experts or consultants) for such Office, shall reside with 
     the Inspector General of the Postal Regulatory Commission.
       ``(2) Except as provided in paragraph (1), any exercise of 
     authority under this subsection shall, to the extent 
     practicable, be in conformance with the applicable laws and 
     regulations that govern selections, appointments and 
     employment, and the obtaining of any such temporary or 
     intermittent services, within the Postal Regulatory 
     Commission.''.
       (c) Deadline.--No later than 180 days after the date of the 
     enactment of this Act--
       (1) the first Inspector General of the Postal Regulatory 
     Commission shall be appointed; and
       (2) the Office of Inspector General of the Postal 
     Regulatory Commission shall be established.

     SEC. 602. INSPECTOR GENERAL OF THE UNITED STATES POSTAL 
                   SERVICE TO BE APPOINTED BY THE PRESIDENT.

       (a) Definitional Amendments to the Inspector General Act of 
     1978.--Section 11 of the Inspector General Act of 1978 is 
     amended--
       (1) in paragraph (1)--
       (A) by striking ``or'' before ``the President of the 
     Export-Import Bank;'' and
       (B) by inserting ``or the Governors of the United States 
     Postal Service (within the meaning of section 102(3) of title 
     39, United States Code);'' after ``the President of the 
     Export-Import Bank;''; and
       (2) in paragraph (2)--
       (A) by striking ``or'' before ``the Export-Import Bank,''; 
     and

[[Page 17631]]

       (B) by inserting ``or the United States Postal Service,'' 
     after ``the Export-Import Bank,''.
       (b) Special Provisions Concerning the United States Postal 
     Service.--
       (1) In general.--The Inspector General Act of 1978 is 
     amended by inserting after section 8K the following:


    ``Special provisions concerning the United States Postal Service

       ``Sec. 8L.  (a) In carrying out the duties and 
     responsibilities specified in this Act, the Inspector General 
     of the United States Postal Service shall have oversight 
     responsibility for all activities of the Postal Inspection 
     Service, including any internal investigation performed by 
     the Postal Inspection Service. The Chief Postal Inspector 
     shall promptly report any significant activities being 
     carried out by the Postal Inspection Service to such 
     Inspector General. The Postmaster General shall promptly 
     report to such Inspector General all allegations of theft, 
     fraud, or misconduct by Postal Service officers or employees, 
     and entities or individuals doing business with the Postal 
     Service.
       ``(b) In the case of any report that the Governors of the 
     United States Postal Service (within the meaning of section 
     102(3) of title 39, United States Code) are required to 
     transmit under the second sentence of section 5(d), such 
     sentence shall be applied by deeming the term `appropriate 
     committees of Congress' to mean the Committee on Government 
     Reform of the House of Representatives, the Committee on 
     Governmental Affairs of the Senate, and such other committees 
     or subcommittees of Congress as may be appropriate.
       ``(c) Notwithstanding any provision of paragraph (7) or (8) 
     of section 6(a), the Inspector General of the United States 
     Postal Service may select, appoint, and employ such officers 
     and employees as may be necessary for carrying out the 
     functions, powers, and duties of the Office of Inspector 
     General and to obtain the temporary or intermittent services 
     of experts or consultants or an organization of experts or 
     consultants, subject to the applicable laws and regulations 
     that govern such selections, appointments, and employment, 
     and the obtaining of such services, within the United States 
     Postal Service.
       ``(d) Nothing in this Act shall restrict, eliminate, or 
     otherwise adversely affect any of the rights, privileges, or 
     benefits of employees of the United States Postal Service, or 
     labor organizations representing employees of the United 
     States Postal Service, under chapter 12 of title 39, United 
     States Code, the National Labor Relations Act, any handbook 
     or manual affecting employee labor relations with the United 
     States Postal Service, or any collective bargaining 
     agreement.
       ``(e) There are authorized to be appropriated, out of the 
     Postal Service Fund, such sums as may be necessary for the 
     Office of Inspector General of the United States Postal 
     Service.''.
       (2) Related provisions.--For certain related provisions, 
     see section 503(b).
       (c) Exercise of Certain Powers.--Section 6(e)(3) of the 
     Inspector General Act of 1978 is amended--
       (1) by striking ``and the'' before ``Tennessee Valley 
     Authority''; and
       (2) by inserting ``, and United States Postal Service'' 
     after ``Tennessee Valley Authority''.
       (d) Public Contracts.--
       (1) Additional provisions applicable.--Section 410(b)(5) of 
     title 39, United States Code, is amended--
       (A) in subparagraph (A), by striking ``and'' after the 
     semicolon; and
       (B) by adding after subparagraph (B) the following:
       ``(C) the Anti-Kickback Act of 1986 (41 U.S.C. 51 and 
     following), other than subsections (a) and (b) of 7 and 
     section 8 of that Act; and
       ``(D) section 315 of the Federal Property and 
     Administrative Services Act of 1949 (41 U.S.C. 265) (relating 
     to protecting contractor employees from reprisal for 
     disclosure of certain information);''.
       (2) Regulations on allowable costs.--Section 410 of title 
     39, United States Code, is amended by adding at the end the 
     following:
       ``(e) The Postal Service shall develop and issue purchasing 
     regulations that prohibit contract costs not allowable under 
     section 5.2.5 of the United States Postal Service Procurement 
     Manual (Publication 41), as in effect on July 12, 1995.''.
       (e) Reports.--Section 3013 of title 39, United States Code, 
     is amended by striking ``Postmaster General'' each place it 
     appears and inserting ``Chief Postal Inspector''.
       (f) Technical and Conforming Amendments.--
       (1) Relating to the inspector general act of 1978.--(A) 
     Subsection (a) of section 8G of the Inspector General Act of 
     1978 (as amended by section 601(a)) is further amended--
       (i) in paragraph (2), by striking ``the Postal Regulatory 
     Commission, and the United States Postal Service;'' and 
     inserting ``and the Postal Regulatory Commission;'' and
       (ii) in paragraph (4), by striking ``except that'' and all 
     that follows through ``Code);'' and inserting ``except that, 
     with respect to the National Science Foundation, such term 
     means the National Science Board;''.
       (B)(i) Subsection (f) of section 8G of such Act is 
     repealed.
       (ii) Subsection (c) of section 8G of such Act is amended by 
     striking ``Except as provided under subsection (f) of this 
     section, the'' and inserting ``The''.
       (C) Section 8J of such Act is amended by striking the 
     matter after ``8D,'' and before ``of this Act'' and inserting 
     ``8E, 8F, 8H, or 8L''.
       (2) Relating to title 39, united states code.--(A) 
     Subsection (e) of section 202 of title 39, United States 
     Code, is repealed.
       (B) Paragraph (4) of section 102 of such title 39 (as 
     amended by section 101) is amended to read as follows:
       ``(4) `Inspector General' means the Inspector General of 
     the United States Postal Service, appointed under section 
     3(a) of the Inspector General Act of 1978;''.
       (C) The first sentence of section 1003(a) of such title 39 
     is amended by striking ``chapters 2 and 12 of this title, 
     section 8G of the Inspector General Act of 1978, or other 
     provision of law,'' and inserting ``chapter 2 or 12 of this 
     title, subsection (b) or (c) of this section, or any other 
     provision of law,''.
       (D) Section 1003(b) of such title 39 is amended by striking 
     ``respective'' and inserting ``other''.
       (E) Section 1003(c) of such title 39 is amended by striking 
     ``included'' and inserting ``includes''.
       (3) Relating to the energy policy act of 1992.--Section 
     160(a) of the Energy Policy Act of 1992 (42 U.S.C. 8262f(a)) 
     is amended (in the matter before paragraph (1)) by striking 
     all that follows ``(5 U.S.C. App.)'' and before ``shall--''.
       (g) Effective Date; Transition Provisions.--
       (1) Effective date.--Except as provided in paragraph (2) or 
     subsection (c), this section and the amendments made by this 
     section shall take effect on the date of the enactment of 
     this Act.
       (2) Transition provisions.--
       (A) Presidential appointment authority available 
     immediately.--The authority to appoint an Inspector General 
     of the United States Postal Service in accordance with the 
     amendments made by this section shall be available as of the 
     effective date of this section.
       (B) Continuation in office.--Pending the appointment of an 
     Inspector General of the United States Postal Service in 
     accordance with the amendments made by this section, the 
     individual serving as the Inspector General of the United 
     States Postal Service on the day before the effective date of 
     this section may continue to serve--
       (i) in accordance with applicable provisions of the 
     Inspector General Act of 1978 and (except as provided in 
     clause (ii)) of title 39, United States Code, as last in 
     effect before the effective date of this Act; but
       (ii) subject to the provisions of such title 39 as amended 
     by subsection (e) of this section (deeming any reference to 
     the ``Inspector General'' in such provisions, as so amended, 
     to refer to the individual continuing to serve under 
     authority of this subparagraph) and subparagraph (C).
       (C) Authorization of appropriations.--
       (i) In general.--Notwithstanding any other provision of 
     this subsection, section 8L(e) of the Inspector General Act 
     of 1978 (as amended by this section) shall be effective for 
     purposes of fiscal years beginning on or after October 1, 
     2005.
       (ii) Savings provision.--For purposes of the fiscal year 
     ending on September 30, 2005, funding for the Office of 
     Inspector General of the United States Postal Service shall 
     be made available in the same manner as if this Act had never 
     been enacted.
       (D) Eligibility of prior inspector general.--Nothing in 
     this Act shall prevent any individual who has served as 
     Inspector General of the United States Postal Service at any 
     time before the date of the enactment of this Act from being 
     appointed to that position pursuant to the amendments made by 
     this section.

                         TITLE VII--EVALUATIONS

     SEC. 701. UNIVERSAL POSTAL SERVICE STUDY.

       (a) Report by the Postal Service.--The United States Postal 
     Service shall, within 12 months after the date of the 
     enactment of this Act, submit to the President, the Congress, 
     and the Postal Regulatory Commission, a written report on 
     universal postal service in the United States (hereinafter in 
     this section referred to as ``universal service''). Such 
     report shall include at least the following:
       (1) A comprehensive review of the history and development 
     of universal service, including how the scope and standards 
     of universal service have evolved over time.
       (2) The scope and standards of universal service provided 
     under current law (including sections 101 and 403 of title 
     39, United States Code) and current rules, regulations, 
     policy statements, and practices of the Postal Service.
       (3) A description of any geographic areas, populations, 
     communities, organizations, or other groups or entities not 
     currently covered by universal service or that are covered 
     but that are receiving services deficient in scope or quality 
     or both.
       (4) The scope and standards of universal service likely to 
     be required in the future in order to meet the needs and 
     expectations of the American public, including all types of 
     mail users, based on such assumptions or alternative sets of 
     assumptions as the Postal Service considers plausible.
       (5) Such recommendations as the Postal Service considers 
     appropriate.
       (b) Report by the Postal Regulatory Commission.--The Postal 
     Regulatory Commission shall, within 12 months after receiving 
     the report of the Postal Service under subsection (a), submit 
     to the President and the Congress a written report evaluating 
     the report of the Postal Service. The report of the 
     Commission shall include at least the following:
       (1) Such comments and observations relating to the matters 
     addressed in the Postal Service's report as the Commission 
     considers appropriate.

[[Page 17632]]

       (2) An estimate of the cost attributable to the obligation 
     to provide universal service under prior and current law, 
     respectively.
       (3) An estimate of the likely cost of fulfilling the 
     obligation to provide universal service under--
       (A) the assumptions or respective sets of assumptions of 
     the Postal Service described in subsection (a)(4); and
       (B) such other assumptions or sets of assumptions as the 
     Commission considers plausible.
       (4) Such additional topics and recommendations as the 
     Commission considers appropriate.
       (c) Consultation.--In preparing the reports required by 
     this section, the Postal Service and the Postal Regulatory 
     Commission--
       (1) shall consult with each other, other Federal agencies, 
     users of the mails, enterprises in the private sector engaged 
     in the delivery of mail, and the general public; and
       (2) shall address in their respective reports any written 
     comments received under this section.
       (d) Clarifying Provision.--Nothing in this section shall be 
     considered to relate to any services that are not postal 
     services (within the meaning of section 102 of title 39, 
     United States Code, as amended by section 101).

     SEC. 702. ASSESSMENTS OF RATEMAKING, CLASSIFICATION, AND 
                   OTHER PROVISIONS.

       (a) In General.--The Postal Regulatory Commission shall, at 
     least every 5 years, submit a report to the President and the 
     Congress concerning--
       (1) the operation of the amendments made by the Postal 
     Accountability and Enhancement Act; and
       (2) recommendations for any legislation or other measures 
     necessary to improve the effectiveness or efficiency of the 
     postal laws of the United States.
       (b) Postal Service Views.--A report under this section 
     shall be submitted only after reasonable opportunity has been 
     afforded to the Postal Service to review such report and to 
     submit written comments thereon. Any comments timely received 
     from the Postal Service under the preceding sentence shall be 
     attached to the report submitted under subsection (a).
       (c) Specific Information Required.--The Postal Regulatory 
     Commission shall include, as part of at least its first 
     report under subsection (a), the following:
       (1) Cost-coverage requirement relating to competitive 
     products collectively.--With respect to section 3633 of title 
     39, United States Code (as amended by this Act)--
       (A) a description of how such section has operated; and
       (B) recommendations as to whether or not such section 
     should remain in effect and, if so, any suggestions as to how 
     it might be improved.
       (2) Competitive products fund.--With respect to the Postal 
     Service Competitive Products Fund (under section 2011 of 
     title 39, United States Code, as amended by section 301), in 
     consultation with the Secretary of the Treasury--
       (A) a description of how such Fund has operated;
       (B) any suggestions as to how the operation of such Fund 
     might be improved; and
       (C) a description and assessment of alternative accounting 
     or financing mechanisms that might be used to achieve the 
     objectives of such Fund.
       (3) Assumed federal income tax on competitive products 
     fund.--With respect to section 3634 of title 39, United 
     States Code (as amended by this Act), in consultation with 
     the Secretary of the Treasury--
       (A) a description of how such section has operated; and
       (B) recommendations as to whether or not such section 
     should remain in effect and, if so, any suggestions as to how 
     it might be improved.

     SEC. 703. STUDY ON EQUAL APPLICATION OF LAWS TO COMPETITIVE 
                   PRODUCTS.

       (a) In General.--The Federal Trade Commission shall prepare 
     and submit to the President, the Congress, and the Postal 
     Regulatory Commission, within 1 year after the date of the 
     enactment of this Act, a comprehensive report identifying 
     Federal and State laws that apply differently to the United 
     States Postal Service with respect to the competitive 
     category of mail (within the meaning of section 102 of title 
     39, United States Code, as amended by section 101) and 
     private companies providing similar products.
       (b) Recommendations; Adjustments.--The Federal Trade 
     Commission shall include such recommendations as it considers 
     appropriate for bringing such legal differences to an end 
     and, in the interim, to account under section 3633, for the 
     net economic effects provided by those laws.
       (c) Consultation.--In preparing its report, the Federal 
     Trade Commission shall consult with the United States Postal 
     Service, the Postal Regulatory Commission, other Federal 
     agencies, mailers, private companies that provide delivery 
     services, and the general public, and shall append to such 
     report any written comments received under this subsection.
       (d) Competitive Product Rate Regulation.--The Postal 
     Regulatory Commission shall take into account the 
     recommendations of the Federal Trade Commission, and 
     subsequent events that affect the continuing validity of the 
     estimate of the net economic effect, in promulgating or 
     revising the regulations required by section 3633 of title 
     39, United States Code.

     SEC. 704. GREATER DIVERSITY IN POSTAL SERVICE EXECUTIVE AND 
                   ADMINISTRATIVE SCHEDULE MANAGEMENT POSITIONS.

       (a) Study.--The Board of Governors shall 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. 
     Any data included in the report shall be presented in the 
     aggregate and by pay level.
       (b) Performance Evaluations.--The United States Postal 
     Service shall, as soon as practicable, 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.

       (a) Plan.--The United States Postal Service shall, before 
     the deadline specified in subsection (b), develop and be 
     prepared to implement, whenever necessary, a comprehensive 
     plan under which reemployment assistance shall be afforded to 
     employees displaced as a result of the automation or 
     privatization of any of its functions.
       (b) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the United States Postal Service shall 
     submit to the Board of Governors and to Congress a written 
     report describing its plan under this section.

     SEC. 706. CONTRACTS WITH WOMEN, MINORITIES, AND SMALL 
                   BUSINESSES.

       The Board of Governors shall study and, within 1 year after 
     the date of the enactment of this Act, submit to the 
     President and the Congress a report concerning the number and 
     value of contracts and subcontracts the Postal Service has 
     entered into with women, minorities, and small businesses.

     SEC. 707. RATES FOR PERIODICALS.

       (a) In General.--The United States Postal Service, acting 
     jointly with the Postal Regulatory Commission, shall study 
     and submit to the President and Congress a report 
     concerning--
       (1) 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
       (2) 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.
       (b) Recommendations.--The report shall include 
     recommendations for any administrative action or legislation 
     that might be appropriate.

     SEC. 708. ASSESSMENT OF CERTAIN RATE DEFICIENCIES.

       (a) In General.--Within 12 months after the date of the 
     enactment of this Act, the Office of Inspector General of the 
     United States Postal Service shall study and submit to the 
     President, the Congress, and the United States Postal 
     Service, a report concerning the administration of section 
     3626(k) of title 39, United States Code.
       (b) Specific Requirements.--The study and report shall 
     specifically address the adequacy and fairness of the process 
     by which assessments under section 3626(k) of title 39, 
     United States Code, are determined and appealable, 
     including--
       (1) whether the Postal Regulatory Commission or any other 
     body outside the Postal Service should be assigned a role; 
     and
       (2) whether a statute of limitations should be established 
     for the commencement of proceedings by the Postal Service 
     thereunder.

     SEC. 709. NETWORK OPTIMIZATION.

       (a) In General.--The Postal Service shall, within 90 days 
     after the end of each fiscal year, prepare and submit to the 
     Postal Regulatory Commission, the Congress, and the Board of 
     Governors a written report on the postal processing, 
     transportation, and distribution networks. Such report shall 
     include at least the following:
       (1) An account of actions taken during the preceding fiscal 
     year to improve the efficiency and effectiveness of the 
     processing, transportation, and distribution networks, while 
     preserving the timely delivery of postal services.
       (2) An account of--
       (A) actions taken to identify any excess capacity within 
     the processing, transportation, and distribution networks; 
     and
       (B) actions taken to implement savings through realignment 
     or consolidation of facilities.
       (3) Identification of statutory or regulatory obstacles 
     that prevented or will prevent the Postal Service from taking 
     action to realign or consolidate facilities.
       (4) Such additional topics and recommendations as the 
     Postal Service considers appropriate.
       (b) Treatment as Performance Goals.--The Postal Service 
     shall establish and report the matters set forth in 
     subsection (a) as performance goals in the reports required 
     by sections 2803 and 2804.
       (c) Actions To Be Taken.--The Postal Service shall take 
     such actions it considers, in its sole discretion, necessary 
     and appropriate to provide the Nation with a modern and 
     efficient network for the processing, transportation, and 
     distribution of mail. Nothing in this section shall prevent 
     the Postal Service from making such improvements in the 
     efficiency and effectiveness of the network as it deems 
     appropriate.

     SEC. 710. ASSESSMENT OF FUTURE BUSINESS MODEL OF THE POSTAL 
                   SERVICE.

       (a) Appointment of Research Organization.--Not later than 
     90 days after the date of

[[Page 17633]]

     the enactment of this Act, the Comptroller General of the 
     United States shall appoint, in such manner and under such 
     terms as he in his sole discretion determines appropriate, an 
     independent, impartial, and expert research organization 
     (hereinafter in this section referred to as the ``research 
     organization'') to prepare and submit to the President and to 
     Congress a comprehensive report that evaluates what business 
     model would best promote an efficient, reliable, innovative, 
     and viable Postal Service that can meet the needs of the 
     Nation and its citizens in the 21st century. The final report 
     required by this section shall be submitted within 27 months 
     of the date of the enactment of this Act. The final report 
     shall identify costs, benefits, and feasible options, if any, 
     associated with one or more strategies for--
       (1) maintaining the Postal Service in its current form as 
     an independent establishment in the executive branch of the 
     Government; and
       (2) transforming the Postal Service into an ordinary 
     corporation, owned wholly by the Government, wholly by 
     private shareholders, or partly by the Government and partly 
     by private shareholders.
       (b) Protection of Universal Service.--The research 
     organization may include such recommendations as it considers 
     appropriate with respect to how the Postal Service's business 
     model can be maintained or transformed in an orderly manner 
     that will minimize adverse effects on all interested parties 
     and assure continued availability of affordable, universal 
     postal service throughout the United States (based on the 
     reports required by section 701). The research organization 
     shall not consider any strategy or other course of action 
     that would pose a significant risk to the continued 
     availability of affordable, universal postal service 
     throughout the United States.
       (c) Elements of Report.--
       (1) Topics to address.--The report shall address at least 
     the following:
       (A) Specification of nature and bases of one or more sets 
     of reasonable assumptions about the development of the postal 
     services market, to the extent that such assumptions may be 
     necessary or appropriate for each strategy identified by the 
     research organization.
       (B) Specification of the nature and bases of one or more 
     sets of reasonable assumptions about the development of the 
     regulatory framework for postal services, to the extent that 
     such assumptions may be necessary or appropriate for each 
     strategy identified by the research organization.
       (C) Qualitative and, to the extent possible, quantitative 
     effects that each strategy identified by the research 
     organization may have on universal service generally, the 
     Postal Service, mailers, postal employees, private companies 
     that provide delivery services, and the general public.
       (D) Financial effects that each strategy identified by the 
     research organization may have on the Postal Service, postal 
     employees, the Treasury of the United States, and other 
     affected parties, including the American mailing consumer.
       (E) Feasible and appropriate procedural steps and 
     timetables for implementing each strategy identified by the 
     research organization.
       (F) Such additional topics as the Comptroller General or 
     the research organization shall consider necessary and 
     appropriate.
       (2) Matters to consider.--For each strategy identified, the 
     research organization shall assess how each business model 
     might--
       (A) address the human-capital challenges facing the Postal 
     Service, including how employee-management relations within 
     the Postal Service may be improved;
       (B) optimize the postal infrastructure, including the best 
     methods for providing retail services that ensure convenience 
     and access to customers;
       (C) ensure the safety and security of the mail and of 
     postal employees;
       (D) minimize areas of inefficiency or waste and improve 
     operations involved in the collection, processing, or 
     delivery of mail; and
       (E) impact other matters that the Comptroller General or 
     the research organization determines are relevant to 
     evaluating a viable long-term business model for the Postal 
     Service.
       (3) Experiences of other countries.--In preparing the 
     report required by subsection (a), the research organization 
     shall comprehensively and quantitatively investigate the 
     experiences of other industrialized countries that have 
     transformed the national post office. The research 
     organization shall undertake such original research as it 
     deems necessary. In each case, the research organization 
     shall describe as fully as possible the costs and benefits of 
     transformation of the national post office on all affected 
     parties and shall identify any lessons that foreign 
     experience may imply for each strategy identified by the 
     research organization.
       (d) Outside experts.--In preparing its study, the research 
     organization may retain the services of additional experts 
     and consultants.
       (e) Consultation.--In preparing its report, the research 
     organization shall consult fully with the Postal Service, the 
     Postal Regulatory Commission, other Federal agencies, postal 
     employee unions and management associations, mailers, private 
     companies that provide delivery services, and the general 
     public. The research organization shall include with its 
     final report a copy of all formal written comments received 
     under this subsection.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated from the Postal Service Fund such sums as 
     may be necessary to carry out this section.

     SEC. 711. STUDY ON CERTAIN PROPOSED AMENDMENTS.

       The Government Accountability Office shall study and, 
     within 12 months after the date of the enactment of this Act, 
     submit to the Congress a report on sections 805 and 807 of 
     H.R. 22 (109th Congress), as introduced. Such report shall 
     include the following:
       (1) A description of the efficiencies of the current system 
     under section 5402 of title 39, United States Code.
       (2) The potential for cost savings to the United States 
     Postal Service if the Postal Service, rather than the 
     Department of Transportation, were to administer 
     international mail carriage.
       (3) The potential for harm to domestic air carriers and 
     American workers currently employed by domestic air carriers.
       (4) The potential loss of revenue to domestic air carriers 
     and American workers currently employed by domestic air 
     carriers.
       (5) The process by which the United States Postal Service 
     would administer any changes in current law.
       (6) The process by which the Department of Transportation 
     administers current law.
       (7) The potential for change in protection of national 
     security by carriage by foreign carriers of international 
     mail to and from the United States.

     SEC. 712. DEFINITION.

       For purposes of this title, the term ``Board of Governors'' 
     has the meaning given such term by section 102 of title 39, 
     United States Code.

     TITLE VIII--MISCELLANEOUS; TECHNICAL AND CONFORMING AMENDMENTS

     SEC. 801. EMPLOYMENT OF POSTAL POLICE OFFICERS.

       Section 3061 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(c)(1) The Postal Service may employ police officers for 
     duty in connection with the protection of property owned or 
     occupied by the Postal Service or under the charge and 
     control of the Postal Service, and persons on the property, 
     including duty in areas outside the property to the extent 
     necessary to protect the property and persons on the 
     property.
       ``(2) With respect to such property, such officers shall 
     have the power to--
       ``(A) enforce Federal laws and regulations for the 
     protection of persons and property;
       ``(B) carry firearms; and
       ``(C) make arrests without a warrant for any offense 
     against the United States committed in the presence of the 
     officer or for any felony cognizable under the laws of the 
     United States if the officer has reasonable grounds to 
     believe that the person to be arrested has committed or is 
     committing a felony.
       ``(3) With respect to such property, such officers may 
     have, to such extent as the Postal Service may by regulations 
     prescribe, the power to--
       ``(A) serve warrants and subpoenas issued under the 
     authority of the United States; and
       ``(B) conduct investigations, on and off the property in 
     question, of offenses that may have been committed against 
     property owned or occupied by the Postal Service or persons 
     on the property.
       ``(4)(A) As to such property, the Postmaster General may 
     prescribe regulations necessary for the protection and 
     administration of property owned or occupied by the Postal 
     Service and persons on the property. The regulations may 
     include reasonable penalties, within the limits prescribed in 
     subparagraph (B), for violations of the regulations. The 
     regulations shall be posted and remain posted in a 
     conspicuous place on the property.
       ``(B) A person violating a regulation prescribed under this 
     subsection shall be fined under this title, imprisoned for 
     not more than 30 days, or both.''.

     SEC. 802. DATE OF POSTMARK TO BE TREATED AS DATE OF APPEAL IN 
                   CONNECTION WITH THE CLOSING OR CONSOLIDATION OF 
                   POST OFFICES.

       (a) In General.--Section 404(b) of title 39, United States 
     Code, is amended by adding at the end the following:
       ``(6) For purposes of paragraph (5), any appeal received by 
     the Commission shall--
       ``(A) if sent to the Commission through the mails, be 
     considered to have been received on the date of the Postal 
     Service postmark on the envelope or other cover in which such 
     appeal is mailed; or
       ``(B) if otherwise lawfully delivered to the Commission, be 
     considered to have been received on the date determined based 
     on any appropriate documentation or other indicia (as 
     determined under regulations of the Commission).''.
       (b) Effective Date.--This section and the amendments made 
     by this section shall apply with respect to any determination 
     to close or consolidate a post office which is first made 
     available, in accordance with paragraph (3) of section 404(b) 
     of title 39, United States Code, after the end of the 3-month 
     period beginning on the date of the enactment of this Act.

     SEC. 803. PROVISIONS RELATING TO BENEFITS UNDER CHAPTER 81 OF 
                   TITLE 5, UNITED STATES CODE, FOR OFFICERS AND 
                   EMPLOYEES OF THE FORMER POST OFFICE DEPARTMENT.

       (a) In General.--Section 8 of the Postal Reorganization Act 
     (39 U.S.C. 1001 note) is amended by inserting ``(a)'' after 
     ``8.'' and by adding at the end the following:
       ``(b) For purposes of chapter 81 of title 5, United States 
     Code, the Postal Service shall, with respect to any 
     individual receiving benefits under such chapter as an 
     officer or employee of the former Post Office Department, 
     have the

[[Page 17634]]

     same authorities and responsibilities as it has with respect 
     to an officer or employee of the Postal Service receiving 
     such benefits.''.
       (b) Effective Date.--This section and the amendments made 
     by this section shall be effective as of the first day of the 
     fiscal year in which this Act is enacted.

     SEC. 804. OBSOLETE PROVISIONS.

       (a) Repeal.--
       (1) In general.--Chapter 52 of title 39, United States 
     Code, is repealed.
       (2) Conforming amendments.--(A) Section 5005(a) of title 
     39, United States Code, is amended--
       (i) by striking paragraph (1), and by redesignating 
     paragraphs (2) through (4) as paragraphs (1) through (3), 
     respectively; and
       (ii) in paragraph (3) (as so designated by clause (i)), by 
     striking ``(as defined in section 5201(6) of this title)''.
       (B) Section 5005(b) of such title 39 is amended by striking 
     ``(a)(4)'' each place it appears and inserting ``(a)(3)''.
       (C) Section 5005(c) of such title 39 is amended by striking 
     ``by carrier or person under subsection (a)(1) of this 
     section, by contract under subsection (a)(4) of this section, 
     or'' and inserting ``by contract under subsection (a)(3) of 
     this section or''.
       (b) Eliminating Restriction on Length of Contracts.--(1) 
     Section 5005(b)(1) of title 39, United States Code, is 
     amended by striking ``(or where the Postal Service determines 
     that special conditions or the use of special equipment 
     warrants, not in excess of 6 years)'' and inserting ``(or 
     such longer period of time as may be determined by the Postal 
     Service to be advisable or appropriate)''.
       (2) Section 5402(d) of such title 39 is amended by striking 
     ``for a period of not more than 4 years''.
       (3) Section 5605 of such title 39 is amended by striking 
     ``for periods of not in excess of 4 years''.
       (c) Clerical Amendment.--The analysis for part V of title 
     39, United States Code, is amended by repealing the item 
     relating to chapter 52.

     SEC. 805. INVESTMENTS.

       Subsection (c) of section 2003 of title 39, United States 
     Code, is amended--
       (1) by striking ``(c) If'' and inserting ``(c)(1) Except as 
     provided in paragraph (2), if''; and
       (2) by adding at the end the following:
       ``(2)(A) Nothing in this section shall be considered to 
     authorize any investment in any obligations or securities of 
     a commercial entity.
       ``(B) For purposes of this paragraph, the term `commercial 
     entity' means any corporation, company, association, 
     partnership, joint stock company, firm, society, or other 
     similar entity, as further defined under regulations 
     prescribed by the Postal Regulatory Commission.''.

     SEC. 806. REDUCED RATES.

       Section 3626 of title 39, United States Code, is amended--
       (1) in subsection (a), by striking all before paragraph (4) 
     and inserting the following:
       ``(a)(1) Except as otherwise provided in this section, 
     rates of postage for a class of mail or kind of mailer under 
     former section 4358, 4452(b), 4452(c), 4554(b), or 4554(c) of 
     this title shall be established in accordance with section 
     3622.
       ``(2) For the purpose of this subsection, the term 
     `regular-rate category' means any class of mail or kind of 
     mailer, other than a class or kind referred to in section 
     2401(c).
       ``(3) Rates of postage for a class of mail or kind of 
     mailer under former section 4358(a) through (c) of this title 
     shall be established so that postage on each mailing of such 
     mail reflects its preferred status as compared to the postage 
     for the most closely corresponding regular-rate category 
     mailing.'';
       (2) in subsection (g), by adding at the end the following:
       ``(3) For purposes of this section and former section 
     4358(a) through (c) of this title, those copies of an issue 
     of a publication entered within the county in which it is 
     published, but distributed outside such county on postal 
     carrier routes originating in the county of publication, 
     shall be treated as if they were distributed within the 
     county of publication.
       ``(4)(A) In the case of an issue of a publication, any 
     number of copies of which are mailed at the rates of postage 
     for a class of mail or kind of mailer under former section 
     4358(a) through (c) of this title, any copies of such issue 
     which are distributed outside the county of publication 
     (excluding any copies subject to paragraph (3)) shall be 
     subject to rates of postage provided for under this 
     paragraph.
       ``(B) The rates of postage applicable to mail under this 
     paragraph shall be established in accordance with section 
     3622.
       ``(C) This paragraph shall not apply with respect to an 
     issue of a publication unless the total paid circulation of 
     such issue outside the county of publication (not counting 
     recipients of copies subject to paragraph (3)) is less than 
     5,000.''; and
       (3) by adding at the end the following:
       ``(n) In the administration of this section, matter that 
     satisfies the circulation standards for requester 
     publications shall not be excluded from being mailed at the 
     rates for mail under former section 4358 solely because such 
     matter is designed primarily for free circulation or for 
     circulation at nominal rates, or fails to meet the 
     requirements of former section 4354(a)(5).''.

     SEC. 807. HAZARDOUS MATTER.

       (a) Nonmailability Generally.--Section 3001 of title 39, 
     United States Code, is amended--
       (1) by redesignating subsection (n) as subsection (o); and
       (2) by inserting after subsection (m) the following:
       ``(n)(1) Except as otherwise authorized by law or 
     regulations of the Postal Service, hazardous material is 
     nonmailable.
       ``(2) In this subsection, the term `hazardous material' 
     means a substance or material designated by the Secretary of 
     Transportation under section 5103(a) of title 49.''.
       (b) Mailability.--Chapter 30 of title 39, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 3018. Hazardous material

       ``(a) In General.--The Postal Service shall prescribe 
     regulations for the safe transportation of hazardous material 
     in the mail.
       ``(b) Prohibitions.--No person may--
       ``(1) mail or cause to be mailed hazardous material that 
     has been declared by statute or Postal Service regulation to 
     be nonmailable;
       ``(2) mail or cause to be mailed hazardous material in 
     violation of any statute or Postal Service regulation 
     restricting the time, place, or manner in which hazardous 
     material may be mailed; or
       ``(3) manufacture, distribute, or sell any container, 
     packaging kit, or similar device that--
       ``(A) is represented, marked, certified, or sold by such 
     person for use in the mailing of hazardous material; and
       ``(B) fails to conform with any statute or Postal Service 
     regulation setting forth standards for a container, packaging 
     kit, or similar device used for the mailing of hazardous 
     material.
       ``(c) Civil Penalty; Clean-Up Costs and Damages.--
       ``(1) In general.--A person who knowingly violates this 
     section or a regulation prescribed under this section shall 
     be liable for--
       ``(A) a civil penalty of at least $250, but not more than 
     $100,000, for each violation;
       ``(B) the costs of any clean-up associated with each 
     violation; and
       ``(C) damages.
       ``(2) Knowing action.--A person acts knowingly for purposes 
     of paragraph (1) when--
       ``(A) the person has actual knowledge of the facts giving 
     rise to the violation; or
       ``(B) a reasonable person acting in the circumstances and 
     exercising reasonable care would have had that knowledge.
       ``(3) Separate violations.--
       ``(A) Violations over time.--A separate violation under 
     this subsection occurs for each day hazardous material, 
     mailed or caused to be mailed in noncompliance with this 
     section, is in the mail.
       ``(B) Separate items.--A separate violation under this 
     subsection occurs for each item containing hazardous material 
     that is mailed or caused to be mailed in noncompliance with 
     this section.
       ``(d) Hearings.--The Postal Service may determine that a 
     person has violated this section or a regulation prescribed 
     under this section only after notice and an opportunity for a 
     hearing. Proceedings under this section shall be conducted in 
     accordance with section 3001(m).
       ``(e) Penalty Considerations.--In determining the amount of 
     a civil penalty for a violation of this section, the Postal 
     Service shall consider--
       ``(1) the nature, circumstances, extent, and gravity of the 
     violation;
       ``(2) with respect to the person who committed the 
     violation, the degree of culpability, any history of prior 
     violations, the ability to pay, and any effect on the ability 
     to continue in business;
       ``(3) the impact on Postal Service operations; and
       ``(4) any other matters that justice requires.
       ``(f) Civil Actions To Collect.--
       ``(1) In general.--In accordance with section 409(d), a 
     civil action may be commenced in an appropriate district 
     court of the United States to collect a civil penalty, clean-
     up costs, and damages assessed under subsection (c).
       ``(2) Compromise.--The Postal Service may compromise the 
     amount of a civil penalty, clean-up costs, and damages 
     assessed under subsection (c) before commencing a civil 
     action with respect to such civil penalty, clean-up costs, 
     and damages under paragraph (1).
       ``(g) Civil Judicial Penalties.--
       ``(1) In general.--At the request of the Postal Service, 
     the Attorney General may bring a civil action in an 
     appropriate district court of the United States to enforce 
     this section or a regulation prescribed under this section.
       ``(2) Relief.--The court in a civil action under paragraph 
     (1) may award appropriate relief, including a temporary or 
     permanent injunction, civil penalties as determined in 
     accordance with this section, or punitive damages.
       ``(3) Construction.--A civil action under this subsection 
     shall be in lieu of civil penalties for the same violation 
     under subsection (c)(1)(A).
       ``(h) Deposit of Amounts Collected.--
       ``(1) Postal service fund.--Except as provided under 
     paragraph (2), amounts collected under subsection (c)(1)(B) 
     and (C) shall be deposited into the Postal Service Fund under 
     section 2003.
       ``(2) Treasury.--Amounts collected under subsection 
     (c)(1)(A) and any punitive damages collected under subsection 
     (c)(1)(C) shall be deposited into the Treasury of the United 
     States.''.
       (c) Conforming Amendments.--(1) Section 2003(b) of title 
     39, United States Code, is amended--
       (A) in paragraph (7), by striking ``and'' after the 
     semicolon;
       (B) in paragraph (8), by striking ``purposes.'' and 
     inserting ``purposes; and''; and
       (C) by adding at the end the following:
       ``(9) any amounts collected under section 3018.''.

[[Page 17635]]

       (2) The analysis for chapter 30 of title 39, United States 
     Code, is amended by adding at the end the following:

``3018. Hazardous material.''.
       (d) Injurious Articles as Nonmailable.--Section 1716(a) of 
     title 18, United States Code, is amended by inserting after 
     ``explosives,'' the following: ``hazardous materials,''.

     SEC. 808. PROVISIONS RELATING TO COOPERATIVE MAILINGS.

       (a) Determination.--The Postal Regulatory Commission shall 
     examine section E670.5.3 of the Domestic Mail Manual to 
     determine whether it contains adequate safeguards to protect 
     against (1) abuses of rates for nonprofit mail and (2) 
     deception of consumers.
       (b) Regulations.--If the Postal Regulatory Commission 
     determines that section E670.5.3 of the Domestic Mail Manual 
     does not contain adequate safeguards as described in the 
     preceding subsection, the Commission shall promulgate such 
     regulations as may be necessary to ensure such safeguards.
       (c) Timing.--The Postal Regulatory Commission shall 
     complete the examination required by subsection (a) and the 
     promulgation of any necessary regulations required by 
     subsection (b) within one year after the date of the 
     enactment of this section.

     SEC. 809. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Reimbursement.--Section 3681 of title 39, United States 
     Code, is amended by striking ``section 3628'' and inserting 
     ``sections 3662 through 3664''.
       (b) Size and Weight Limits.--Section 3682 of title 39, 
     United States Code, is amended to read as follows:

     ``Sec. 3682. Size and weight limits

       ``The Postal Service 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.''.
       (c) Revenue Foregone, Etc.--Title 39, United States Code, 
     is amended--
       (1) in section 503 (as so redesignated by section 501), by 
     striking ``this chapter.'' and inserting ``this title.''; and
       (2) in section 2401(d), by inserting ``(as last in effect 
     before enactment of the Postal Accountability and Enhancement 
     Act)'' after ``3626(a)'' and after ``3626(a)(3)(B)(ii)''.
       (d) Appropriations and Reporting Requirements.--
       (1) Appropriations.--Subsection (e) of section 2401 of 
     title 39, United States Code, is amended--
       (A) by striking ``Committee on Post Office and Civil 
     Service'' each place it appears and inserting ``Committee on 
     Government Reform''; and
       (B) by striking ``Not later than March 15 of each year,'' 
     and inserting ``Each year,''.
       (2) Reporting requirements.--Sections 2803(a) and 2804(a) 
     of title 39, United States Code, are amended by striking 
     ``2401(g)'' and inserting ``2401(e)''.
       (e) Authority to Fix Rates and Classes Generally; 
     Requirement Relating to Letters Sealed Against Inspection.--
     Section 404 of title 39, United States Code (as amended by 
     section 102) is further amended by redesignating subsections 
     (b) and (c) as subsections (d) and (e), respectively, and by 
     inserting after subsection (a) the following:
       ``(b) Except as otherwise provided, the Governors are 
     authorized to establish reasonable and equitable classes of 
     mail and reasonable and equitable rates of postage and fees 
     for postal services in accordance with the provisions of 
     chapter 36. 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.
       ``(c) The Postal Service shall maintain one or more classes 
     of mail for the transmission of letters sealed against 
     inspection. The rate for each such class shall be uniform 
     throughout the United States, its territories, and 
     possessions. One such class shall provide for the most 
     expeditious handling and transportation afforded mail matter 
     by the Postal Service. No letter of such a class of domestic 
     origin shall be opened except under authority of a search 
     warrant authorized by law, or by an officer or employee of 
     the Postal Service for the sole purpose of determining an 
     address at which the letter can be delivered, or pursuant to 
     the authorization of the addressee.''.
       (f) Limitations.--Section 3684 of title 39, United States 
     Code, is amended by striking all that follows ``any 
     provision'' and inserting ``of this title.''.
       (g) Miscellaneous.--Title 39, United States Code, is 
     amended--
       (1) in section 1005(d)(2)--
       (A) by striking ``subsection (g) of section 5532,''; and
       (B) by striking ``8344,'' and inserting ``8344'';
       (2) in the analysis for part III, by striking the item 
     relating to chapter 28 and inserting the following:

``28. Strategic Planning and Performance Management.............2801'';

       (3) in section 3005(a)--
       (A) in the matter before paragraph (1), by striking all 
     that follows ``nonmailable'' and precedes ``(h),'' and 
     inserting ``under section 3001(d),''; and
       (B) in the sentence following paragraph (3), by striking 
     all that follows ``nonmailable'' and precedes ``(h),'' and 
     inserting ``under such section 3001(d),'';
       (4) in section 3210(a)(6)(C), by striking the matter after 
     ``if such mass mailing'' and before ``than 60 days'' and 
     inserting ``is postmarked fewer''; and
       (5) by striking the heading for section 3627 and inserting 
     the following:

     ``Sec. 3627. Adjusting free rates''.

           TITLE IX--POSTAL PENSION FUNDING REFORM AMENDMENTS

     SEC. 901. CIVIL SERVICE RETIREMENT SYSTEM.

       (a) Termination of Obligation To Pay Government 
     Contributions.--Section 8334(a)(1)(B)(ii) of title 5, United 
     States Code, is amended by striking all that follows ``be 
     equal to'' and inserting ``zero.''.
       (b) Determination and Disposition of Postal Surplus or 
     Supplemental Liability.--Section 8348(h) of title 5, United 
     States Code, is amended to read as follows:
       ``(h)(1) For purposes of this subsection, a Postal surplus 
     (or supplemental liability) is the amount, as estimated by 
     the Office, by which--
       ``(A) the actuarial present value of all future benefits 
     which are payable from the Fund under this subchapter to 
     current or former employees of the United States Postal 
     Service, or their survivors, and attributable to civilian 
     employment with the Postal Service, is less than (or greater 
     than)
       ``(B) the sum of--
       ``(i) the actuarial present value of deductions to be 
     withheld from the future basic pay of employees of the Postal 
     Service currently subject to this subchapter pursuant to 
     section 8334;
       ``(ii) that portion of the Fund balance, as of the date 
     such surplus or supplemental liability is determined, 
     attributable to payments to the Fund by the Postal Service 
     and its employees, plus the earnings on such amounts while in 
     the Fund; and
       ``(iii) any other appropriate amount, as determined by the 
     Office in accordance with generally accepted actuarial 
     practices and principles.
       ``(2)(A)(i) Not later than June 15, 2006, the Office shall 
     determine the Postal surplus or supplemental liability as of 
     September 30, 2005.
       ``(ii) If a supplemental liability is determined under this 
     subparagraph for fiscal year 2005, the Office shall establish 
     an amortization schedule, including a series of equal annual 
     installments commencing September 30, 2006, which provides 
     for the liquidation of such liability by September 30, 2043.
       ``(iii) If a surplus is determined under this subparagraph 
     for fiscal year 2005, the amount of the surplus shall be 
     transferred to the Postal Service Retiree Health Benefits 
     Fund by June 30, 2006.
       ``(B)(i) For each of fiscal years 2006 through 2038, the 
     Office shall determine the Postal surplus or supplemental 
     liability as of the close of such fiscal year, with each such 
     determination to be made by June 15th of the following fiscal 
     year.
       ``(ii) If a supplemental liability is determined under this 
     subparagraph for a fiscal year, the Office shall establish an 
     amortization schedule, including a series of equal annual 
     installments commencing on September 30 of the following 
     fiscal year, which provides for the liquidation of such 
     liability by September 30, 2043.
       ``(iii)(I) If a surplus of $500,000,000 or more is 
     determined under this subparagraph for a fiscal year, the 
     amount of the surplus shall be transferred to the Postal 
     Service Retiree Health Benefits Fund by June 30th of the 
     following fiscal year.
       ``(II) If a surplus of less than $500,000,000 is determined 
     under this subparagraph for a fiscal year, the surplus shall 
     remain in the Fund, subject to transfer in a subsequent 
     fiscal year under subclause (I) or subparagraph (C)(iii).
       ``(C)(i) Not later than June 15, 2040, the Office shall 
     determine the Postal surplus or supplemental liability as of 
     September 30, 2039.
       ``(ii) If a supplemental liability is determined under this 
     subparagraph for fiscal year 2039, the Office shall establish 
     an amortization schedule, including a series of equal annual 
     installments commencing September 30, 2040, which provides 
     for the liquidation of such liability by September 30, 2043.
       ``(iii) If a surplus is determined under this subparagraph 
     for fiscal year 2039, the amount of the surplus--
       ``(I) shall be applied first toward reducing the amount of 
     any supplemental liability described in section 
     8423(b)(1)(B); and
       ``(II) to the extent that any portion of such surplus 
     remains after the application of subclause (I), shall, not 
     later than June 30, 2040, be transferred to the Postal 
     Service Retiree Health Benefits Fund.
       ``(D) An amortization schedule under this paragraph--
       ``(i) shall be established in accordance with generally 
     accepted actuarial practices and principles, with interest 
     computed at the rate used in the most recent valuation of the 
     Civil Service Retirement System;
       ``(ii) shall supersede any amortization schedule previously 
     established under this paragraph; and
       ``(iii) shall not be taken into account, for purposes of 
     any determination of Postal surplus or supplemental 
     liability, except to the extent of any amounts under such 
     schedule actually paid.
       ``(E)(i) The Postal Service shall pay to the Office the 
     amounts due under any amortization

[[Page 17636]]

     schedule established under this paragraph, to the extent not 
     superseded or canceled.
       ``(ii) A determination under subparagraph (B)(i) or (C)(i) 
     that no supplemental liability exists shall cancel any 
     amortization schedule previously established under this 
     paragraph, to the extent of any amounts first coming due 
     after the close of the fiscal year to which such 
     determination relates.
       ``(3) Notwithstanding any other provision of law, in 
     computing the amount of any payment under any other 
     subsection of this section that is based on the amount of the 
     unfunded liability, such payment shall be computed 
     disregarding that portion of the unfunded liability that the 
     Office determines will be liquidated by payments under this 
     subsection.
       ``(4) As used in this subsection, `Postal Service Retiree 
     Health Benefits Fund' refers to the Postal Service Retiree 
     Health Benefits Fund, as established by section 8909a.''.
       (c) Provisions Relating to Amounts for Military Service.--
     In the application of paragraph (2) of section 8348(g) of 
     title 5, United States Code, for fiscal year 2006, the Office 
     of Personnel Management shall include, in addition to the 
     amount otherwise computed under that paragraph, the amounts 
     that would have been included for fiscal years 2003 through 
     2005 with respect to credit for military service of former 
     employees of the United States Postal Service if Public Law 
     108-18 had not been enacted (including earnings thereon) and 
     the Secretary of the Treasury shall make the required 
     transfer to the Civil Service Retirement and Disability Fund 
     based on that amount.
       (d) Review.--
       (1) In general.--Notwithstanding any other provision of 
     this section, any determination or redetermination made by 
     the Office of Personnel Management under this section shall, 
     upon request of the United States 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.
       (2) Response.--Upon receiving the report of the Postal 
     Regulatory Commission, the Office of Personnel Management 
     shall reconsider its determination or redetermination 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. 902. HEALTH INSURANCE.

       (a) In General.--Chapter 89 of title 5, United States Code, 
     is amended--
       (1) in section 8906(g)(2)(A), by striking ``by the United 
     States Postal Service.'' and inserting ``first from the 
     Postal Service Retiree Health Benefits Fund up to the amount 
     contained therein, with any remaining amount paid by the 
     United States Postal Service.'';
       (2) by inserting after section 8909 the following:

     ``Sec. 8909a. Postal Service Retiree Health Benefits Fund

       ``(a) There is in the Treasury of the United States a 
     Postal Service Retiree Health Benefits Fund (hereinafter in 
     this section referred to as the `Fund') which is administered 
     by the Office of Personnel Management. Any amounts 
     transferred to the Fund under section 8348(h)(2) shall yield 
     interest at a rate equal to the weighted average yield of all 
     the investments in the Civil Service Retirement and 
     Disability Fund as of the date of transfer. All other 
     investments of amounts in the Fund shall be made in 
     accordance with subsections (c)-(e) of section 8348.
       ``(b) The Fund is available without fiscal year limitation 
     for payments required by section 8906(g)(2).
       ``(c)(1) Not later than June 30, 2006, and by June 30 of 
     each succeeding year, the Office of Personnel Management 
     shall compute the net present value of the excess of future 
     payments required by section 8906(g)(2)(A) for current and 
     future United States Postal Service annuitants over the value 
     of the assets of the Fund as of the end of the fiscal year 
     ending on September 30 of that year. The actuarial costing 
     method to be used by the Office and all actuarial assumptions 
     shall be established by the Office after consultation with 
     the United States Postal Service and must be in accordance 
     with generally accepted actuarial practices and principles.
       ``(2) Not later than September 30, 2006, and by September 
     30 of each succeeding year, the Office shall compute and the 
     United States Postal Service shall pay into such Fund--
       ``(A) the portion of the net present value described in 
     paragraph (1) attributable to the current year's service of 
     Postal Service employees; and
       ``(B) interest on the net present value described in 
     paragraph (1) for that fiscal year, at the interest rate used 
     in computing that net present value;

     except that the amount otherwise payable by the Postal 
     Service under the preceding provisions of this paragraph by 
     not later than September 30, 2006, shall be reduced by the 
     total contributions made by the Postal Service under section 
     8906(g)(2) and attributable to fiscal year 2006 (as 
     determined by the Office).
       ``(3)(A) Any computation or other determination of the 
     Office under this 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.
       ``(B) 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.
       ``(4) The Office shall promulgate, after consultation with 
     the United States Postal Service, any regulations it deems 
     necessary under this subsection.''; and
       (3) in the analysis by inserting after the item relating to 
     section 8909 the following:

``8909a. Postal Service Retiree Health Benefits Fund.''.

       (b) Review.--
       (1) In general.--Any regulation established under section 
     8909a(c)(4) of title 5, United States Code (as amended by 
     subsection (a)) 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.
       (2) Response.--Upon receiving the report of the Postal 
     Regulatory Commission, the Office of Personnel Management 
     shall reconsider its regulation in light of such report, and 
     shall take such action as it considers appropriate. The 
     Office shall submit a report containing the results of its 
     reconsideration to the Commission, the Postal Service, and 
     the Congress.

     SEC. 903. REPEALER.

        Section 3 of Public Law 108-18 is repealed.

     SEC. 904. ENSURING APPROPRIATE USE OF ESCROW AND MILITARY 
                   SAVINGS.

       (a) Definition.--For purposes of this section, the term 
     ``total savings'' means, for any fiscal year, the amount 
     equal to--
       (1) the amount of contributions that the Postal Service 
     would otherwise have been required to make to the Civil 
     Service Retirement and Disability Fund under subchapter III 
     of chapter 83 of title 5, United States Code, for such fiscal 
     year if Public Law 108-18 and this Act had not been enacted, 
     minus
       (2) the amount of amortization payments (if any) required 
     under section 8348(h)(2) of title 5, United States Code, for 
     such fiscal year.
       (b) Calculations.--The following calculations shall be made 
     for each of fiscal years 2006 through 2015:
       (1) Not later than January 31 of the fiscal year following 
     the fiscal year involved, the Office of Personnel Management 
     (in consultation with the Postal Service) shall determine the 
     total savings for the fiscal year.
       (2) On the date of making its determination under paragraph 
     (1), the Office shall also determine (in consultation with 
     the Postal Service) the amount by which--
       (A) the amount the Postal Service paid for that fiscal year 
     into the Postal Service Retiree Health Benefits Fund in 
     accordance with 8909a(c)(2) of title 5, United States Code, 
     exceeds (if at all)
       (B) the amount of payments made by the Postal Service for 
     that fiscal year from such Fund in order to satisfy the 
     requirements of section 8906(g)(2) of such title 5.
       (c) Requirements.--
       (1) If threshold is met.--If the amount calculated under 
     subsection (b)(2) for a fiscal year is greater than or equal 
     to two-thirds of the total savings in such fiscal year, no 
     further action under this section is necessary with respect 
     to such fiscal year.
       (2) If threshold is not met.--
       (A) In general.--If the amount calculated under subsection 
     (b)(2) for a fiscal year is less than two-thirds of the total 
     savings in such fiscal year, the Postal Service shall pay 
     into the Postal Service Retiree Health Benefits Fund, by June 
     30 of the following fiscal year, an amount equal to the 
     difference.
       (B) Allowable alternative.--
       (i) In general.--Notwithstanding subparagraph (A), and 
     subject to clause (ii), the Postal Service may instead use 
     the amount that it would otherwise be required to pay into 
     the Postal Service Retiree Health Benefits Fund for a year 
     (or any portion thereof) to reduce the postal debt.
       (ii) Limitation.--Amounts used to reduce the postal debt 
     under this subparagraph may not exceed a total of 
     $3,000,000,000.
       (3) Aggregation allowed.--Notwithstanding paragraph (2), if 
     the amount calculated under subsection (b)(2) for a fiscal 
     year is less than two-thirds of the total savings in such 
     fiscal year, but the sum of the amounts calculated under 
     subsection (b)(2) for all fiscal years from 2006 to the 
     fiscal year involved is greater than or equal to two-thirds 
     of the sum of the total savings for such years, no further 
     action under this section is necessary with respect to such 
     fiscal year.
       (d) Reporting Requirement.--The Office of Personnel 
     Management shall submit a report containing the results of 
     its calculations under subsection (b) to the Postal Service, 
     the Postal Regulatory Commission, and the Congress.
       (e) Waiver Authority.--The requirements of subsection 
     (c)(2)(A) may, upon application of the Postal Service, be 
     waived by the Postal Regulatory Commission, to the extent 
     that the Commission determines that such waiver is reasonable 
     and equitable and necessary 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.

     SEC. 905. EFFECTIVE DATES.

       (a) In General.--Except as otherwise provided, this title 
     shall take effect on October 1, 2005.

[[Page 17637]]

       (b) Government Contributions.--Section 901(a) shall take 
     effect on the first day of the first pay period beginning on 
     or after October 1, 2005.

  The CHAIRMAN. No amendment to the committee amendment in the nature 
of a substitute is in order except those printed in House Report 109-
184. Each amendment may be offered only in the order printed in the 
report, by a Member designated in the report, shall be considered read, 
shall be debatable for the time specified in the report, equally 
divided and controlled by the proponent and an opponent, shall not be 
subject to amendment, and shall not be subject to a demand for division 
of the question.
  It is now in order to consider amendment No. 1 printed in House 
Report 109-184.


                  Amendment No. 1 Offered by Mr. Pence

  Mr. PENCE. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Pence:
       Page 73, strike line 7 and all that follows through page 
     74, line 2.
       Page 74, line 3, strike ``(d)'' and insert ``(c)''.
       Page 74, strike all after ``Act'' on line 7 and before 
     ``any'' on line 9, and insert ``or''.

                              {time}  2000

  The CHAIRMAN. Pursuant to House Resolution 380, the gentleman from 
Indiana (Mr. Pence) and the gentleman from Virginia (Mr. Tom Davis) 
each will control 10 minutes.
  The Chair recognizes the gentleman from Indiana (Mr. Pence).
  Mr. PENCE. Mr. Chairman, I yield myself such time as I may consume.
  I rise today to offer the Pence amendment to the Postal 
Accountability and Enhancement Act, and, along with several of my 
colleagues, will endeavor to bring real reform and real enhancement to 
a bill however well conceived and well intentioned by my colleagues. In 
fact, I rise today to begin by thanking the gentleman from Virginia 
(Chairman Tom Davis) and the gentleman from New York (Mr. McHugh), the 
author of this legislation, for their leadership on this measure and 
their sincerity in attempting to ensure the ongoing vitality of the 
U.S. Postal Service and the tradition that it has enjoyed in this 
Nation, an invaluable part of our economy since before our Nation was 
formed.
  But before I get to the substance of the Pence amendment, Mr. 
Chairman, I want to begin to address the reasons why the Bush 
administration did today issue a Statement of Administration Policy 
opposing significant portions of this legislation and, in fact, 
suggesting that if this legislation did not achieve the objective of 
budget restraint and fiscal reform, that the President's advisers would 
encourage him to veto this legislation that will come before the House 
today.
  A few observations from the report on the President's Commission of 
the United States Postal Service are in order. The Commission found 
that the number one problem facing the United States Postal Service is 
its complete inability to control costs, and ratepayers have been 
paying the freight as a result of that along with taxpayers, who 
recently financed nearly $7 billion in a Postal Service bailout just a 
few short years ago. Of that uncontrollable cost, 80 percent of the 
United States Postal Service costs are constituted in labor, this in a 
competitive marketplace where its competitors like UPS and FedEx spend 
only 56 percent and 42 percent of their cost on labor. Clearly the 
United States Postal Service is, as the President's Commission found, 
desperately in need of flexibility to achieve labor and workforce 
reforms.
  The USPS is currently providing its workers roughly $870 million more 
in benefits than Federal workers receive as a result of lucrative 
health and life insurance benefits, and that is just the beginning.
  H.R. 22 that we will consider today contains none of the main 
collective bargaining proposals offered by the President's Commission. 
It contains none of the reforms offered by the Commission to establish 
a BRAC-style process to consolidate and shut down facilities that use 
money. And while H.R. 22 does laudably contain a cap on postal rate 
increases, many are highly skeptical about how that will work. The 
Congressional Budget Office states that the USPS will ``increase rates 
. . . more frequently than under current law, but by smaller 
increments.'' In addition, the cap could be blown if such an increase 
were ``reasonable and equitable and necessary'' for the continuation of 
services. Such a cap hardly equips the U.S. Postal Service with the 
tools to control costs and renegotiate its labor costs.
  So we come today, a series of us, with the kind of reforms that we 
believe will give the Postal Service the opportunity and the 
flexibility to achieve reforms necessary to live within its means. That 
is why I submitted an amendment to enact the Commission's 
recommendation to ensure that health care and pension benefits ought to 
be a part of normal collective bargaining. It was rejected and will not 
be considered today. That is why the gentleman from North Carolina (Mr. 
McHenry) had offered an amendment to enact the Commission's 
recommendation to reform the workmen's compensation reforms to align 
more closely with the private sector. Unfortunately, these amendments 
were made not in order.
  In fact, today the Pence amendment will deal with a provision of this 
legislation that, believe it or not, would set aside a seat on the 
Board of Governors specifically for an individual unanimously approved 
by all labor unions. More on that in a moment.
  I say this with deep respect, Mr. Chairman. I understand why the 
Democratic minority whip just said on this floor that this was ``a good 
bill that should be passed this year.'' I just do not understand why a 
Republican majority in Congress, with the firm and clear opposition of 
a Republican President, would do likewise.
  Let me get to the substance of the Pence amendment, if I may. The 
Pence amendment essentially removes a provision of H.R. 22 that 
requires that the first vacant slot on the Board of Governors literally 
be filled by an individual with the unanimous backing of ``all labor 
organizations.'' The headlines today would attest that it might be 
difficult, depending on the definition of ``all labor organizations,'' 
to get all labor organizations to agree on anything these days.
  Currently the Board of Governors consists of nine members with no 
more than five from the same party. This bill would ensure that one of 
these seats would be set aside to represent the interests of one 
special interest group to the exclusion of other interests like mailers 
or, dare I say it, taxpayers. It is this type of provision that we must 
confront in this legislation, and the Pence amendment humbly seeks to 
strike that.
  And workforce is the issue. Mr. Chairman, the U.S. Postal Service is 
the second largest employer in the United States, second only to Wal-
Mart. And according to the President's Commission report, 3 out of 
every $4 earned by the Postal Service went to pay wages and benefits of 
its employees in fiscal year 2002. The unions have been extraordinarily 
effective over the last 25 years, as has been said over and over again, 
preventing layoffs and recently announcing having inked the second 
largest pay increase in the unions' history. I believe that is why the 
Statement of Administration Policy that was issued today simply read, 
and I quote, ``Should the final bill have such an adverse impact on the 
federal budget, the President's senior advisers would recommend that he 
veto the bill.''
  The Pence amendment is all about bringing the kind of reforms in this 
bill that will allow the U.S. Postal Service to maintain its vitality 
and its fiscal integrity for years to come. The Pence amendment in its 
effort to strike section 401 is a modest effort to achieve that goal.
  Mr. Chairman, I reserve the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 2 minutes to the 
gentleman from California (Mr. Waxman).
  Mr. WAXMAN. Mr. Chairman, the gentleman from Indiana described the

[[Page 17638]]

President's Commission on Postal Reform. Many of the broad outlines of 
that Commission's recommendations are in the legislation before us 
today.
  The legislation before us today is supported by not Democrats, not 
just Republicans, but by labor unions and management, the National 
Association of Manufacturers, the National Federation of Independent 
Businesses, Small Business Legislative Council, and the postal unions. 
And I will not go through all of them, but all the newspapers, the 
publishers, the mailers, all the people that look to the Postal Service 
for their service.
  This amendment, when we get right to what the amendment is all about, 
is to take the one out of nine seats on the Board of Governors away 
from a union representative. The Postal Service has 700,000 career 
employees. They are the ones who make the system work. Are they not 
entitled to have one representative on this board? This idea of giving 
them representation is backed by labor, management, business. We have 
all worked cooperatively together on postal reform legislation. They 
have built trust and made compromises. That is why this legislation is 
so broadly supported.
  This amendment would undermine the consensus behind the legislation. 
It singles out one group and says they lose, they lose their seat on 
the Board. That may be good politics for people who want to say they 
are antiunions, but it is not good for this legislation or for the 
Postal Service.
  So I would urge my colleagues to oppose the Pence amendment and to 
support the bill, not to adopt this or any other amendment that would 
undermine the consensus behind the legislation. And then let us move 
forward. We will have to be talking to the other body. We will have to 
be talking to the President and people in his administration in order 
to get a law, but we have a consensus for a bill that we hope will 
become law.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 2 minutes to the 
gentlewoman from Florida (Ms. Ginny Brown-Waite).
  Ms. GINNY BROWN-WAITE of Florida. Mr. Chairman, I thank the gentleman 
for yielding me this time.
  This amendment that is proposed would remove a provision from a very 
carefully crafted piece of legislation that would require the first 
vacant slot on the Postal Service Board of Governors to be filled by an 
individual with unanimous backing by labor unions. Currently there are 
11 members. This bill would provide that one of those seats become a 
labor seat, certainly not documented by labor. One seat would be a 
labor seat.
  The provision requiring the seat to become a labor seat has been in 
the Postal Accountability and Enhancement Act for 11 years. No group on 
either side of the issue has ever expressed any opposition to the 
change in statute, and I am unclear why this issue has actually risen 
today. Simply requiring one of a nine-member Board speak on behalf of 
thousands of employees in everyone's district here hardly seems to be 
unreasonable or undoable.
  H.R. 22 is a bill that we have heard many people on the floor say how 
many years it has been worked on, well over decades. I urge my 
colleagues to vote against this and other amendments under 
consideration today that do not provide for any real improvements in 
the underlying text of the bill that we have before us tonight.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 3 minutes to the 
gentleman from New York (Mr. McHugh).
  Mr. McHUGH. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  I want to be very quick here, and I certainly appreciate our 
distinguished colleague's comments and deeply appreciate his concern.
  Just a couple of points. As the gentleman from California (Mr. 
Waxman) said, I have to disagree with the gentleman's comments that 
somehow the President's Commission is at odds with what this bill 
entails. In fact, I think it is fair to say the President's Commission 
adopted at least, at least, 80 percent of H.R. 22 as it was originally 
crafted and continues to be contained therein.
  He also spoke about the Statement of Administration Policy, the SAP, 
and talked about labor representation as though the President has 
opposed this. That is not true. The President's SAP does not address 
this issue, and, in fact, the United States Postal Service has not 
taken a position on this particular provision as well, which is the 
context of the gentleman's amendment. So with all due respect, I think 
that clarification is vital.
  It also talked about Republican-Democrat. I do not think this is a 
novel concept. Many major corporations from DaimlerChrysler, TWA, and 
on and on have labor union representation on their boards. I would also 
note that many organizations that are generally not considered liberal, 
perhaps Democrat, not just support H.R. 22, but oppose the gentleman's 
amendment. I will name just a few: American Express, Bank of America, 
Capital One, JP Morgan Chase, the Citigroup, Financial Services 
Roundtable. As I said, pretty conservative organizations that oppose 
this amendment.

                              {time}  2015

  The fact of the matter is, this is well accepted in the industry 
sector. There will be one out of nine members of the Board of 
Governors, and I do not think it is unreasonable to have such a labor-
intensive organization have a labor vote on that. While I do respect 
the gentleman's intent, I think, as has been suggested, these are 
issues that are much better dealt with in the context of the committee.
  Mr. PENCE. Mr. Chairman, I yield 1 minute to the gentleman from 
Arizona (Mr. Flake).
  Mr. FLAKE. Mr. Chairman, I rise in support of the Pence amendment.
  It is important to remove this language in H.R. 22 that reserves one 
seat on the Postal Board of Governors for a representative of labor 
unions.
  The U.S. Postal Service is a government-owned corporation and, as 
such, is technically owned by the U.S. taxpayers. Reserving one space 
exclusively for labor representatives confers preferential status and, 
in my view, undue influence to one interest group at the expense of all 
other stakeholders in postal operations, particularly first-class mail 
users.
  I think it is a good amendment. I think it is something that I 
believe this kind of set-aside may not be in the Senate version of the 
bill. It is certainly a topic that needs to be debated and taken up in 
conference, and I would encourage my colleagues to accept it.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 2 minutes to the 
gentleman from Illinois (Mr. Davis).
  Mr. DAVIS of Illinois. Mr. Chairman, one of the great accomplishments 
of this legislation is the fact that it was able to bring labor and 
management together, to bring both sides to the table and have them 
agree. The gentleman from Indiana's amendment did not mention the fact 
that four of the slots were designated for management. So certainly, if 
management would have at least four slots pretty much designated, then 
certainly labor ought to have one.
  The other point is that throughout the deliberations, very seldom did 
we hear much conversation about Democrats and Republicans. We really 
talked about moving a postal system and a postal service forward. So I 
would oppose the gentleman's amendment.
  Mr. PENCE. Mr. Chairman, I yield 1 minute to the gentleman from Texas 
(Mr. Hensarling).
  Mr. HENSARLING. Mr. Chairman, I thank the gentleman for yielding me 
this time, and I rise in support of his amendment.
  As I understand it, if there are nine members of this board, no more 
than five can be from the party of the President. Inasmuch as the 
President is presently a Republican, that would mean that at least four 
seats would be allocated to those who are members of the Democrat 
party. The last time I looked, although perhaps some labor unions are 
having a falling out amongst themselves, there has not been a falling 
out between the labor

[[Page 17639]]

union movement and the Democrat Party, so I would think they would be 
well represented.
  I think perhaps somebody that might be terribly underrepresented 
tonight would be the poor beleaguered taxpayer. Given that there are 
over 140 million of them, perhaps we should consider reserving at least 
one seat for them, to make sure that their interests are represented 
since, too often, so many of the aspects of this legislation that we 
are discussing tonight ultimately could fall upon them. If there is 
anybody who deserves special recognition, and not that all stakeholders 
should not be considered, I would suggest that we reserve a seat for 
the taxpayer.
  Mr. PENCE. Mr. Chairman, I reserve the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 1 minute to the 
gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the distinguished 
gentleman for yielding me this time.
  First of all, I cannot thank the ranking member and the chairman of 
the full committee, and the ranking member of the subcommittee and 
chairman of the subcommittee enough for such a thoughtful piece of 
legislation. But with respect to this amendment, might I say the 
composition of this board and the representation of one union member is 
what you call consensus and what you call cooperation.
  Just listening to the leadership of my local union, the letter 
carriers, with the President, President Prissy Grace, and the American 
Postal Workers Union, as well as the Postmaster General in my 
congressional district, Ms. Green, they have had a working relationship 
that can be exhibited by the structure in which this particular 
legislation allows: representation of the workers, the workers who are 
committed to delivering the mail, rain or shine. I think that to 
eliminate this particular position really eliminates the voice of the 
workers.
  We are already saying that we are committed to the work ethic of the 
postal workers in the postal system. This is a reform and reformation 
of the postal system for the better, to make them efficient, to make 
them productive, and to serve the American people. Having their work 
represented on this board serves the American people, and I ask my 
colleagues to support the amendment.
  Mr. PENCE. Mr. Chairman, I yield myself such time as I may consume.
  I thank the members of the committee, especially the author of this 
bill, for their sincerity of purpose and civility in this debate. I 
also thank my colleagues who have risen in support of the Pence 
amendment, which, again, simply removes the provision of H.R. 22 that 
requires that the first vacant slot on the Board of Governors be filled 
by an individual with unanimous backing by all labor organizations.
  The Pence amendment is supported by National Right to Work, by 
Americans For Tax Reform. We already have fairness on the board, Mr. 
Chairman: five members of one political party, the party in power in 
the White House, and four members appointed by the other political 
party. We do not need a tie-breaker member that is selected by the 
unanimous consent of all the labor unions.
  If we are going to achieve the labor and workforce reforms necessary 
to restore efficiency to the Postal Service and ensure its vitality in 
the 21st century, we must ensure that those reforms are not stymied by 
a reserved seat for labor unions on the postal board.
  Mr. Chairman, I yield back the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield myself such time as 
I may consume. I thank my friend for offering his amendment. I am 
unable to support it, but I understand the spirit in which he is giving 
it to try to make this a better bill.
  This is a carefully crafted bill in which Republicans and Democrats 
have come together to try to work through a lot of issues, and moving 
one part out really jeopardizes the total package.
  The gentleman quoted the minority leader, or the minority whip, as 
saying, This is a good bill and it should be passed this year; and he 
understood that, but why would a Republican Congress do it.
  A Republican Congress would pass this bill because we do not want a 
2-cent rate increase next January. The only way we can forestall that 
rate increase is by passing this legislation; and to pass this 
legislation, we need to work together with Republicans and Democrats. 
That means we give on some issues and we take on others.
  The question was raised, well, we ought to have a taxpayer on the 
board. I think everybody who is on the board is a taxpayer. The fact of 
the matter is, there are four members of the board who are management, 
but they are not postal management. There are two postal management 
members of the board, and this would reserve one for the unions to 
pick; and by the way, there are diversity among the postal unions. That 
is a tough job to pick somebody because of competing interests over 
mail handlers versus letter carriers and the like.
  But this is good legislation, and I am afraid that this amendment, in 
my judgment, despite I think the best intentions of its author, will 
upset that delicate balance that we have created to this point. It is 
not something that is new to corporate America to have a member of 
labor sitting on corporate boards. It is actually done quite 
frequently, particularly in the airline industry and a number of other 
industries where this is fairly common at this point. And since the 
postal workers have a lot to gain or lose by this as well, we think 
their voice can be very constructive at the end of the day.
  So for those reasons and the fact that this particular provision has 
been in the bill since its introduction 11 years ago, and until this 
amendment was filed, I do not think any objections have been raised. I 
understand where the gentleman is coming from; but for those reasons, I 
would ask my colleagues to reject the Pence amendment and to support 
the final passage.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Indiana (Mr. Pence).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. PENCE. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings 
on the amendment offered by the gentleman from Indiana (Mr. Pence) will 
be postponed.
  It is now in order to consider amendment No. 2 printed in House 
Report 109-184.


                  Amendment No. 2 Offered by Mr. Flake

  Mr. FLAKE. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Mr. Flake:
       Page 120, after line 8, insert the following (and make such 
     technical and conforming changes as may be appropriate):

     SEC. 712. PILOT PROGRAM TO TEST ALTERNATIVE METHODS FOR THE 
                   DELIVERY OF POSTAL SERVICES.

       (a) Pilot Program.--The United States Postal Service may 
     conduct a pilot program to test the feasibility and 
     desirability of alternative methods for the delivery of 
     postal services. Subject to the provisions of this section, 
     the pilot program shall not be limited by any lack of 
     specific authority under title 39, United States Code, to 
     take any action contemplated or, to the extent specified in a 
     waiver granted by the Postal Service in accordance with 
     regulations under subsection (f), by any provision of law, 
     rule, or regulation inconsistent with any action contemplated 
     (any such waiver to be granted or denied in consultation with 
     the Attorney General, to the extent any provision of title 
     18, United States Code, is involved).
       (b) Requirements.--
       (1) In general.--Under the pilot program, alternative 
     methods for the delivery of postal services may be tested 
     only in those communities that submit an appropriate 
     application (together with a written plan) in such time, 
     form, and manner as the Postal Service by regulation 
     requires, and whose application has been duly approved. Any 
     such application shall include--
       (A) a description of the postal services that would be 
     affected;
       (B) the alternative providers selected and the postal 
     services each would furnish (or

[[Page 17640]]

     the manner in which those decisions would be made);
       (C) the anticipated costs and benefits to the Postal 
     Service and users of the mail;
       (D) the anticipated duration of the community's 
     participation;
       (E) a specific description of any actions contemplated for 
     which there is a lack of specific authority or for which a 
     waiver (as described in subsection (a)) would be necessary; 
     and
       (F) such other information as the Postal Service may 
     require.
       (2) Review boards.--Under the pilot program, the postmaster 
     or postmasters within a community may, in accordance with 
     regulations prescribed by the Postal Service, establish a 
     postal performance review board (hereinafter in this section 
     referred to as a ``review board''). It shall be the function 
     of a review board to submit any application under paragraph 
     (1) on behalf of the community that it represents and to 
     carry out the plan on the basis of which any such application 
     with respect to such community is approved. A review board 
     shall consist of the postmaster for the community (or, if 
     there is more than one, the postmaster designated in 
     accordance with regulations under subsection (f)), at least 1 
     individual who shall represent the interests of business 
     concerns, and at least 1 individual who shall represent the 
     interests of users of the class of mail for which the most 
     expeditious handling and transportation is afforded by the 
     Postal Service. The postmaster (or postmaster so designated) 
     shall serve as chairman of the review board.
       (3) Alternative providers.--To be eligible to be selected 
     as an alternative provider of postal services, a provider 
     must be a commercial enterprise, nonprofit organization, 
     labor organization, or other person that--
       (A) possesses the personnel, equipment, and other 
     capabilities necessary to furnish the postal services 
     concerned;
       (B) satisfies such security and other requirements as may 
     be necessary to safeguard the mail, users of the mail, and 
     the general public;
       (C) submits a bid to the appropriate review board in such 
     time, form, and manner (together with such accompanying 
     information) as the review board may require; and
       (D) meets such other requirements as the review board may 
     require, consistent with any regulations under subsection (f) 
     that may apply.
       (4) Use of postal facilities and equipment.--Postmasters 
     shall at their discretion be permitted to allow alternative 
     providers the use of facilities and equipment of the Postal 
     Service, and any such proposed use shall, for purposes of the 
     competitive bidding process, be taken into account using fair 
     market value.
       (c) Limitations.--The pilot program--
       (1) may involve not more than a total of 20 communities; 
     and
       (2) shall terminate not later than 5 years after the date 
     on which the program commences.
       (d) Termination Authority.--Subject to such conditions as 
     the Postal Service may by regulation prescribe and the terms 
     of any written agreement or contract entered into in 
     conformance with such regulations, the participation of a 
     community in the pilot program may be terminated by the 
     Postal Service or by the review board for such community if 
     either determines that the continued participation of the 
     community is not in the best interests of the public or the 
     Government of the United States.
       (e) Evaluations.--The Postal Service shall provide for an 
     evaluation of the operation of the pilot program within each 
     community that participates. Any such evaluation shall 
     examine, at least and if applicable, reliability of mail 
     delivery (including the rate of misdeliveries), timeliness of 
     mail delivery (including the time of day that mail is 
     delivered and the time elapsing from the postmarking to 
     delivery of mail), volume of mail delivered, and any cost 
     savings or additional costs to the Postal Service 
     attributable to the use of alternative providers. Data 
     included in any such evaluation shall be analyzed--
       (1) by community characteristics, time of year, and type of 
     postal service;
       (2) by residential, business, and any other type of mail 
     user; and
       (3) on such other bases as the Postal Service may 
     determine.

     Each such evaluation and an overall evaluation of the pilot 
     program shall be transmitted by the Postal Service to the 
     President and each House of Congress by not later than 90 
     days after the date on which the program terminates.
       (f) Regulations.--The Postal Service may prescribe any 
     regulations necessary to carry out this section.
       (g) Rule of Construction.--Nothing in this section shall be 
     considered to affect the obligation of the Postal Service to 
     continue providing universal service, in accordance with 
     otherwise applicable provisions of law, in all aspects not 
     otherwise provided for pursuant to this section.

  The CHAIRMAN. Pursuant to House Resolution 380, the gentleman from 
Arizona (Mr. Flake) and a Member opposed each will control 10 minutes.
  The Chair recognizes the gentleman from Arizona (Mr. Flake).
  Mr. FLAKE. Mr. Chairman, I yield myself such time as I may consume.
  My amendment is quite simple. It establishes a pilot program in at 
least 20 test communities, which would sunset in 5 years, to allow the 
U.S. Postal Service and the Congress to simply gather information. This 
pilot program would test the feasibility and desirability of 
alternative methods for the delivery of postal services.
  The pilot program would test the current following assumptions about 
the Postal Service: Are consumers better off if the Postal Service 
remains a monopoly? Does the current postal infrastructure allow for as 
many delivery offerings as possible? Is the total value of the 
universal service model for postal delivery worth the expense?
  Now, universal service by the Postal Service would continue to be 
provided, but participating postmasters would not be limited by the 
current monopoly statutes on first-class delivery and the use of postal 
mailboxes. If the postmaster so chooses, alternative providers, such as 
commercial enterprise, nonprofit organization, or a labor organization 
that satisfies a strict set of criteria could serve as an alternative 
provider for postal services. They would also be able to use the 
equipment and facilities of the USPS at the discretion of the 
postmaster for fair market value.
  Mr. Chairman, with the dramatic reduction in first-class mail volume, 
coupled with the inability of the Postal Service to control costs, the 
Postal Service and Congress must have many well-tested alternatives for 
the future of mail delivery in the U.S.
  Many European countries are well ahead of the U.S. on some new 
innovative ideas for structuring their respective postal delivery 
services. The pilot program is simply a test program to provide the 
Postal Service and Congress with useful information to make future 
changes to postal services, if needed.
  I might add, Mr. Chairman, we know that some changes are needed. We 
are running into deficits; and every 4 years, we are bailing out the 
USPS. I do not want to be here 4 years from now doing the same thing. 
So let us test some alternatives. Let us see what else works. Let us 
see what other countries are doing that we might adopt to control costs 
and improve quality.
  Mr. Chairman, I reserve the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I rise to claim the time in 
opposition, and I yield 2 minutes to the gentleman from California (Mr. 
Waxman).
  Mr. WAXMAN. Mr. Chairman, I understand this amendment is to do 
something on a pilot project basis with the idea that we are going to 
promote innovation in the delivery of the mail. Well, I support that 
goal.
  H.R. 22 has many provisions to promote flexibility and innovation; 
but this amendment, maybe it was not intended this way, but it is 
drafted in a way that is an open invitation to abuse. It allows a local 
postmaster to contract out the delivery of the mail to private 
companies; and in the course of that amendment, it provides that any 
provision of Federal law that might otherwise apply to these contracts 
and the delivery of mail can be waived.
  Well, that is incredibly far-reaching. It would mean a local postal 
official could set up his own company. He can ask his brother-in-law to 
set up another company and then contract with that company to do the 
job of delivering the mail. It is certainly a blatant conflict of 
interest.
  But even criminal laws could be waived under this amendment. There 
would be no prohibition against under-the-table kickbacks. The 
provision could allow the waiver of the privacy of first-class mail. 
This could lead to a lot of unforeseen problems.
  That is why the postmasters of this country, the National League of 
Postmasters, which represents the local postmasters, has said that the 
postmasters very strongly oppose the amendment: ``The Congressman's 
approach would be harmful to universal service.''
  So it is not just that this amendment goes against the compromise 
that has

[[Page 17641]]

brought this whole bill together, but I do not think it has been 
thought through, and I do not think we ought to adopt something that 
has so many possible ramifications to it that we would certainly 
regret.
  Mr. FLAKE. Mr. Chairman, I yield myself 1 minute.
  I should point out to the gentleman that postmasters would have full 
authority under this legislation, under this amendment to actually 
contract out or not. They can disband the alternative at any time.
  Now, under the law, only the government can do it right, and we ought 
to take over the entire economy. If we do not trust the private sector 
to deliver services more effectively and more efficiently than the 
government can, shoot, why do we not get in every business.
  We know that that is not the case. We know the private sector 
typically can do it better, faster, cheaper, smarter than government.
  Every 4 years, we are back in again to bail out the USPS. This simply 
says, why do we not try something, try some alternatives that are 
working in other countries; try some things that might work, that might 
lower the cost, that might be more taxpayer-friendly than this. That is 
what this amendment is all about.
  Mr. Chairman, I reserve the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield myself such time as 
I may consume.
  We are not bailing out the post office every 4 years; it is like 
every 35 years, since the last act. We did come out with some 
additional money because of anthrax and because of the added burdens 
that we put on the post office at that point, but the post office has 
to operate under its own budget; and right now, the only thing they can 
rely on is rate increases, and rate increases drive mail away into 
other areas, which is why we are working this bill tonight.
  I appreciate the gentleman's amendment, but I think it is 
unnecessary. The Postal Service already has considerable authority to 
test and implement different methods of providing services to the 
public. Nothing in the current law, I repeat, nothing in the current 
law or in H.R. 22 prevents the Postal Service from employing 
contractors in providing mail service.
  The post office has a long history of doing so, starting with the 
Pony Express. For most of its history, the Postal Service has relied on 
dedicated contractors to manage small post offices, often in rural 
communities. Almost 8 percent of all of the post offices are operated 
under contract, not by postal employees; 8 percent.
  Also, for 160 years, the Postal Service has relied on private 
contractors for the transportation and delivery of mail. Star route 
carriers today continue to operate, transporting mail efficiently and 
effectively nationwide, even delivering the mail to over 2 million 
homes 6 days a week. In many rural communities, those served by both 
contract postal units and star route carriers, the Postal Service's 
entire relationship with their customers is already handled by 
contractors, not employees.

                              {time}  2030

  For these longstanding and successful postal contract arrangements, 
this amendment is at best unnecessary. At worst it adds a new layer of 
procedures that will place burdens on expanding these programs into 
newer areas. One puzzling aspect is its provision allowing the Postal 
Service to waive laws, rules and regulations, including sections of the 
criminal code, which I am not sure I understand. Maybe the gentleman on 
his time will explain.
  But the Service does not need this waiver to contract the provisions. 
In fact, it only serves to remove needed protections safeguarding the 
sanctity, privacy and security of the mail. Do customers really want 
their mail delivered by contractors to whom no laws apply?
  In short, the Postal Service has been conducting pilot tests of these 
ideas since the 19th century. I would say the evaluation phase is over, 
the results are in, they work. Let us not mess them up with a new, 
unnecessary, convoluted regulation. Both postmaster organizations 
oppose this.
  And so I would urge that we defeat this amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. FLAKE. Mr. Chairman, before yielding 2 minutes to the gentleman 
from Indiana, let me just say that asking the Postal Service to give up 
what might lead to giving up their monopoly or a portion of their 
monopoly is unreasonable. We need to prime the pump a little. No 
private business would in their self-interest do that either. That is 
why this amendment is important.
  Mr. Chairman, I yield 2 minutes to the gentleman from Indiana (Mr. 
Pence).
  Mr. PENCE. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  Mr. Chairman, I rise in strong support of the Flake amendment. There 
are 38,000 post offices, stations and branches in the U.S. Postal 
Service. The Flake amendment contemplates a pilot program that would 
affect 20 communities.
  By my bad math, that is about \1/20\ of 1 percent of the communities 
that are served by 38,000 post offices, stations and branches. But that 
is an unacceptable reform.
  I rise with great respect to the gentleman from California (Mr. 
Waxman), who has been a champion of postal reform for much longer than 
I have been in Congress. I do respect the gentleman and have great 
respect for the chairman. It is lost on me why we cannot say, in the 
name of reform, in the greatest free-market economy in the history of 
the world, that we will allow for competition in 20 pilot programs to 
run out inefficiencies and to bring innovation and new ideas to the 
delivery of postal services.
  The Flake amendment is just simply that; 38,000 post offices, 
stations and branches. The Flake amendment asks humbly that we identify 
20 communities to test the feasibility and desirability of alternative 
methods of delivery of postal services, and this reform bill and its 
reformers oppose that pilot program.
  Let us bring real reform to reform. If we cannot, let us introduce a 
pilot program where reform and the ideas of reform might be able to 
take hold to create a truly diverse 21st century postal delivery system 
for America.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 2 minutes to the 
gentleman from New York (Mr. McHugh).
  Mr. McHUGH. Mr. Chairman, a couple of comments. The gentleman from 
Arizona (Mr. Flake) said you cannot expect the Postal Service to give 
back any of its monopoly powers. With all due respect, the Postal 
Service has agreed to this bill. In this bill there is a substantial 
reduction in the monopoly scope on first class mail.
  Right now first class mail and monopoly is whatever the Postal 
Service says it is. Under this bill there is a bright line 
determination; it is six times the rate of the first class stamp, which 
is a substantial give-back.
  I also have to underscore the distinguished chairman's concerns about 
the suspension of title 18. You can argue about the needs for reform in 
pilot tests and such, but maybe it was an inadvertent step, but the 
fact still remains the amendment before the committee today will be a 
suspension of the criminal code, which would empower, rightly or 
wrongly, those who would be entrusted with the mail of the United 
States Postal Service to be totally absolved under criminal 
responsibility.
  Now, I can leave it to the imagination of the Members what that could 
potentially mean for identity theft and on and on and on. I doubt that 
the gentleman from Arizona (Mr. Flake) meant it, but regardless, that 
is what this reform calls for.
  The last thing I would say is I think that a concern is about a new 
model for the Postal Service, and I would agree, and this bill 
understands that as well. We specifically negotiated with the 
administration a study to be conducted under the auspices of GAO. They 
will hire a contract specialty firm that will look at establishing a 
future business model that, in part, and I will quote

[[Page 17642]]

from the bill, ``seeks to study the maintenance of the Postal Service 
in its current form as an independent establishment in the executive 
branch; and, two, transforming the Postal Service into an ordinary 
corporation, wholly owned by the government or wholly owned by private 
shareholders or partly by the government and partially by private 
shareholders.''
  This bill admits we have to take a careful look at the future of the 
business model of the Postal Service. That is why this amendment should 
be rejected.
  Mr. FLAKE. Mr. Chairman, I yield 1 minute to the gentleman from Texas 
(Mr. Hensarling).
  Mr. HENSARLING. Mr. Chairman, I thank the gentleman for yielding me 
time.
  Mr. Chairman, I rise in support of this amendment. I do want to add 
my voice to those congratulating the gentleman from Virginia (Chairman 
Tom Davis) for his good work, and I know that the job has been very 
tough to try to reconcile all of the differing interests and opinions 
that are brought to bear. But I find it very difficult to believe that 
we have something to fear from a pilot program in 20 communities out of 
38,000. It appears that something is not working, or we would not be 
here this evening.
  Many, many years ago when I was in high school, I played both 
football and tennis, and I was equally poor at both, but I remember 
something a tennis coach once told me: There are many ways to lose at 
tennis. Try them all.
  Well, we are losing here tonight if we are contemplating rate 
increases and imposing $6 billion on the taxpayers. Maybe we should try 
something new. Maybe we should try some pilot programs. Maybe we should 
get some more experimentation, some more innovation, some more 
competition into the system, and maybe we can find ways to start 
winning at this.
  And because of that, I do rise in strong support of the gentleman's 
amendment.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield myself 30 seconds.
  Mr. Chairman, let me just say this: On the $6 billion figure floating 
around, it is important to understand that the reason the Congressional 
Budget Office scores this as an increase is because they have 
contemplated and put into their figuring that there will be rate 
increases. Our legislation takes away those rate increases, so that is 
not coming into the Treasury. So if you do not have a rate increase, it 
scores.
  When you sit here and say it is going to cost the taxpayers, that 
means they do not have to go with a rate increase. We are being 
penalized because we are not doing rate increases, and it scores 
against us. We need to understand that. And that is why this 
legislation is being passed.
  Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from 
Connecticut (Mr. Shays).
  Mr. SHAYS. Mr. Chairman, I thank the gentleman for yielding me the 
time.
  The Postal Service delivers to 140 million sites, and there is about 
a million new sites every year. It provides universal service.
  When I hear my colleagues talk about fine-tuning this bill, that is 
what we have been doing for the last 10 years. This is a bill that has 
been fine-tuned, and it has been fine-tuned in a way that has gotten 
support from disparate parts.
  The employees who work at the postal system know that more than 
200,000 jobs are going to be lost. That is why we opposed the first 
amendment by the gentleman from Indiana (Mr. Pence) because we need 
employee buy-in.
  The reason why we opposed this amendment, it seems to fail to 
understand that there is competition with FedEx, with UPS, with DHL and 
many more things. They are also competing with the newspapers.
  We are trying to provide flexibility to the postal system. So I 
understand the concept of fine-tuning, but I would dispute 
significantly the failure to recognize that the bill has been fine-
tuned. And when I am hearing my colleagues offer their amendments, I 
feel like they have not read the bill, because the bill allows for 
competition, it allows for flexibility, and it has buy-in in all of 
these disparate parts.
  This amendment needs to be defeated if we are going to pass this 
bill.
  Mr. FLAKE. Mr. Chairman, I reserve the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I will reserve the balance 
of my time.
  Mr. FLAKE. Mr. Chairman, I yield myself the balance of the time. I 
will go ahead and wrap up.
  Labor costs consume 80 percent of the Postal Service revenue, whereas 
UPS and FedEx spend only 56 and 42 percent of their revenues on labor. 
I know there are differences. It is a little different animal when we 
are talking about first class mail delivery, and what FedEx and UPS do, 
but 80 percent versus 56 and 42 percent respectively.
  I think we ought to be questioning ourselves, what are they doing 
that we are not? What can we do so we will not have either more money 
out of the general fund or a rate increase? Whether it is paid by the 
consumer with monopoly service or the taxpayer is the same. It is both 
money coming out of the taxpayers' or consumers' pockets.
  And I do not want to be here, like I said, 4 years from now talking 
about another rate increase or talking about more money from the 
general fund because we simply have not done anything about making sure 
that competition drives improvement in service and it controls cost. We 
know that from everything we know about the economy. We know that from 
education reform. We know that in other areas as well. Competition and 
choice controls costs and improve quality. This is what we are trying 
to jump-start here. That is the purpose of this amendment.
  As the gentleman from Indiana (Mr. Pence) mentioned, this is hardly 
revolutionary. A fraction of 1 percent would be allowed to actually 
test this proposition, that maybe competition would help control cost 
and improve quality, a fraction of 1 percent of all of the sites out 
there, of all of the systems running.
  So this is a very modest amendment. I think it is important.
  Mr. Chairman, I yield back the balance of my time.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I would just note that the 
universal service obligation of the post office gives it a burden in 
requirements that some of the other facts and figures alluded to do not 
have to meet.
  Mr. Chairman, I would yield the remaining time to my colleague, the 
gentleman from Illinois (Mr. Davis).
  Mr. DAVIS of Illinois. Mr. Chairman, where I come from, there is an 
old saying: If it looks like a duck, acts like a duck, quacks like a 
duck, talks like a duck, then it is a duck. And it seems to me that the 
bottom line is this is an attempt to privatize the Postal Service, 
which would decimate the concept of universal service. There could be 
no universal service if this amendment is passed.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Arizona (Mr. Flake).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. FLAKE. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings 
on the amendment offered by the gentleman from Arizona (Mr. Flake) will 
be postponed.
  The CHAIRMAN. It is now in order to consider amendment No. 3 printed 
in House Report 109-184


           Amendment No. 3 Offered by Mr. Hensarling of texas

  Mr. HENSARLING. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Mr. Hensarling:

       Page 138, line 13, strike ``(h)(1)'' and insert 
     ``(h)(1)(A)''.
       Page 138, line 16, strike ``(A)'' and insert ``(i)''.
       Page 138, line 22, strike ``(B)'' and insert ``(ii)''.
       Page 138, line 23, strike ``(i)'' and insert ``(I)''.
       Page 139, line 1, strike ``(ii)'' and insert ``(II)''.

[[Page 17643]]

       Page 139, line 7, strike ``(iii)'' and insert ``(III)''.
       Page 139, after line 10, insert the following:
       ``(B)(i) In computing the actuarial present value of future 
     benefits, the Office shall include the full value of benefits 
     attributable to military and volunteer service for United 
     States Postal Service employees first employed after June 30, 
     1971, and a prorated share of the value of benefits 
     attributable to military and volunteer service for United 
     States Postal Service employees first employed before July 1, 
     1971.
       ``(ii) Military service so included shall not be included 
     in the computation of any amount under subsection (g)(2).
       Page 142, strike line 21 and all that follows through page 
     143, line 7.
       Page 143, line 8, strike ``(d)'' and insert ``(c)''.
       Page 147, lines 12 through 13, strike ``ESCROW AND 
     MILITARY'' (and make such technical and conforming changes as 
     may be appropriate).
       Page 148, line 2, strike ``for each of fiscal years 2006 
     through 2015'' and insert ``for fiscal year 2006 and each 
     fiscal year thereafter''.
       Page 148, line 24, strike ``two-thirds of''.
       Page 149, line 6, strike ``two-thirds of''.
       Page 149, line 25 through page 150, line 1, strike ``two-
     thirds of''.
       Page 150, line 4, strike ``two-thirds of''.
       Page 150, strike lines 13 through 21.

  The CHAIRMAN. Pursuant to House Resolution 380, the gentleman from 
Texas (Mr. Hensarling) and a Member opposed each will control 10 
minutes.
  The Chair recognizes the gentleman from Texas (Mr. Hensarling).
  Mr. HENSARLING. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, earlier this evening some Members rose in support of 
postal workers. Other rose in support of large postal customers. This 
is good, and this is well, and I respect that.
  But tonight I wish to rise in support of the taxpayer. Today our 
Nation is riding a wave, an impending fiscal tsunami, that threatens to 
drown our children and grandchildren in a sea of red ink.
  Since 2000, the amount that government spends annually per household 
has risen from $18,000 to over $20,000 in 2004. This is only the fourth 
time in our Nation's history that spending exceeded $20,000 per 
household. It also represents the largest expansion of the Federal 
Government since the Vietnam era.
  The Federal debt now stands at a staggering $7.8 trillion, or roughly 
$26,600 for every man, woman and child in America. And the Nation's 
financial challenges are about to get markedly worse over the next 
decade.
  Without reforms we know that Medicare will grow at a rate of 9 
percent, Medicaid 7.8 percent and Social Security at 5.5 percent a 
year, far outstripping our country's economic growth or our ability to 
pay for them. Where will it all end?

                              {time}  2045

  According to the GAO, if we ignore the runaway growth of government 
spending, we will have to double taxes, double taxes on our children 
and grandchildren just to balance the budget by the year 2040. If this 
occurs, we stand to become the first generation of Americans to leave 
our children with a lower standard of living, not to mention a legacy 
of limited freedom and unlimited government.
  Now, day after day Member after Member comes to this floor to decry 
the Federal deficit and the legacy of debt that we are leaving our 
children. Rarely have so many of us spoken so passionately against the 
Federal deficit and yet done so little about it.
  Today, I wish to provide us with an opportunity to change that. In 
1970, the fundamental principle of postal reform was established, that 
the Postal Service would become a self-financed entity. According to 
title 39 of the U.S. Code: ``Postal rates shall be established to 
apportion the costs of all postal operations to all users of the 
mail.''
  Simply put, the U.S. Postal Service is supposed to pay its own 
freight; but according to the Congressional Budget Office, and I 
understand that the chairman of the full committee respectfully 
disagrees with their score, the CBO says H.R. 22 will actually place us 
further in debt by almost $6 billion over 10 years. And who should pay 
for that $6 billion?
  It either must be paid by those who use the Postal Service or the 
taxpayers. I vote for those who actually use the service. Now, some of 
my colleagues have argued that the Postal Service faces unique 
responsibilities and thus taxpayers must subsidize them. It is true. 
The Postal Service does have some unique responsibilities, but they 
also enjoy a host of unique benefits that private businesses do not. 
The Postal Service pays no Federal, States, or local taxes. They are 
immune from most regulations such as zoning, motor vehicle 
registration, and even parking tickets.
  The Postal Service can borrow from the Treasury at below-market rates 
and is immune from anti-trust laws despite the fact that it can compete 
against private companies.
  The number one problem facing the United States Postal Service is not 
the lack of a taxpayer subsidy. It is their seeming inability to 
control costs. Labor costs consume 80 percent of the Postal Service's 
revenue, whereas UPS and Fed Ex spend only 56 percent and 42 percent of 
their revenues on labor.
  The Postal Service has been unable to close existing facilities or 
consolidate new operations. In fact, Mr. Chairman, over half of its 
38,000 facilities do not generate enough revenue to cover their costs.
  Mr. Chairman, again, I want to state that I respect the hard work 
that the gentleman from Virginia (Mr. Tom Davis) and the gentleman from 
New York (Mr. McHugh) have done on this bill. And I do understand that 
many different opinions had to be reconciled to get a postal reform 
bill to the floor. But I believe that we need to stand with President 
Bush, we need to stand with the American taxpayer and make this a 
budget-neutral bill. Instead, if we want to make the Postal Service 
more cost competitive, what we really need to do is enact all of the 
Presidential commission's workforce reforms.
  In 2003, Congress decided that the Postal Service was on a course to 
possibly overpay its civil service retirement system costs. Rather than 
let the Postal Service spend the money, it retained it and an escrow 
account was created within the U.S. Treasury.
  H.R. 22 releases that escrow account to pre-fund Postal Service 
health care liabilities. I agree this is a sound use of funds, but it 
is unfortunately incomplete. Under H.R. 22, only two-thirds of the 
funds would be used to fund the health care liabilities letting 2 to $3 
billion a year slip back to the Postal Service for other expenditures.
  With the Postal Service currently facing an unfunded health care 
liability of roughly $75 billion, I believe every dollar in the escrow 
account should be used to offset this growing concern. If not, 
taxpayers will surely be called upon to make up this tremendous 
shortfall.
  Mr. Chairman, my amendment would reduce the cost of H.R. 22 
substantially by ensuring that 100 percent of the civil service 
retirement system savings will be directed to the Postal Service's 
unfunded health care liability. In addition, this amendment would 
maintain the Postal Service's financial responsibility for paying the 
civil service retirement system costs associated with military service 
credits, instead of passing the cost on to the Treasury and the 
American taxpayer.
  Again, the question is not whether but who will pay, the customers 
that use the Postal Service or the American taxpayers.
  Mr. Chairman, I want the Postal Service to become more efficient, and 
I believe we can do so by enacting more of the President's initiatives. 
Let us not pass the buck to American taxpayers yet again. Let us not 
pile further debt upon our grandchildren. Let us ensure the United 
States Postal Service continues to pay its own freight. I do appreciate 
the good work of the gentleman from Virginia (Mr. Tom Davis), but let 
us make H.R. 22 budget neutral. I urge all of my colleagues to vote for 
this amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. TOM DAVIS of California. Mr. Chairman, I claim the time in 
opposition to the amendment.
  Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I appreciate where the gentleman is trying to go with 
this,

[[Page 17644]]

but even the White House does not want to have this scored neutrally 
under CBO numbers. They have asked for the Office of Management and 
Budget numbers because the Congressional Budget Office ends up counting 
rate increases that have not taken effect as already being part of 
revenue. And to the extent that we can stave off stamp tax rate 
increases, what the gentleman's amendment would do, not stave it off 
but it includes it, to the extent we do that, then it counts against 
the budget.
  The other problem in terms of budget neutrality comes from the 
President's own commission on the Postal Service which recommended that 
the military years of service for postal employees under the CSRS 
retirement program, that those years be paid for by the military like 
they are for every other agency of government instead of having postal 
patrons for that. This was the President's commission which recommended 
that.
  What I have talked about, we save money, not take money away. But the 
question is why should rate payers have to pay for military service in 
an agency where you have veterans hiring preference? It is not fair to 
rate payers. It is driving up rates.
  Finally, let me say, it is not two-thirds of the escrow funds that is 
funding health care. Ninety percent of the escrow funds over the next 5 
years are to fund health care. That is more than any other agency in 
government. Not enough for some Members, I am sure; but this is the 
appropriate way in my opinion for the post office to operate.
  We have committed to the White House. We are going to work to try to 
get this as budget neutral as we can as we move forward to the 
conference working with OMB, but the Congressional Budget Office's 
arcane scoring rules make it virtually impossible to get here in this 
particular case.
  Once again, let me remind everyone, what is the alternative? The 
alternative to this legislation is rate increases, postal rate 
increases, a stamp act, on every man, woman and child that mails a 
letter in this country. That is what we are trying to stave off, 
because as rate increases go up, people quit using the post office; and 
it gets this downward spiral that will lead to the demise of the post 
office as we know it. That is why this legislation has such broad 
support from such diverse groups in the private sector and in the 
public sector.
  Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. 
Waxman).
  Mr. WAXMAN. Mr. Chairman, I join my chairman in opposing this 
amendment. It sounds like the gentleman from Texas (Mr. Hensarling) has 
some vision of postal reform. Well, I just think that is great, except 
we cannot pass it.
  The alternative to this, as the chairman has pointed out, is going to 
be the existing system and undesirable increases on rates.
  So what is the amendment before us? It is not a different version of 
reform of the Postal Service. It would micro-manage the Postal 
Service's use of money that is now in an escrow and will tell them they 
have to use most of that money to prefund health benefits.
  Well, we say they must use some of that money for that, but if they 
shift the money for that purpose, then to run the Postal Service they 
are going to have to ask for an increase in rates. That is why in 
amendment would certainly be opposed by all the people who use the 
Postal Service, the mailers, the enterprises, the businesses in this 
country that rely on the Postal Service for their success.
  Now, the amendment does something else, and I just have to underscore 
it. As the chairman of the Committee on Government Reform mentioned, it 
would require the Postal Service to pay for the pensions for those who 
served in the military before they went to work for the Postal Service. 
If you were in the military and went to work for any other agency of 
government, that agency would not be required to pay for your military 
pension. They might be required to pay for the pension accrued from 
service in that agency.
  Why should the Postal Service have to pay for the military pensions? 
It does not make sense. And the consequence of it would be that the 
Postal Service would have to ask for an increase in rates because they 
have this extra financial burden to pay for military pensions. That is 
why this amendment is one that I think it to be a poison pill for the 
legislation.
  You could imagine the groups that oppose this legislation like the 
National Association of Manufacturers and NFIB and others opposing this 
because they do not want higher rates. I urge opposition to the 
amendment.
  Mr. HENSARLING. Mr. Chairman, how much time do I have remaining?
  The CHAIRMAN. The gentleman from Texas (Mr. Hensarling) has 3\1/2\ 
minutes remaining.
  Mr. HENSARLING. Mr. Chairman, I yield 1\1/2\ minutes to the 
gentlewoman from Tennessee (Mrs. Blackburn).
  Mrs. BLACKBURN. Mr. Chairman, I want to thank the gentleman from 
Texas (Mr. Hensarling) for his work on this amendment and, of course, 
our chairman of the Committee on Government Reform, who has worked so 
diligently on this bill and for years has worked to be able to move it 
to the body.
  Mr. Chairman, you know, we are hearing a lot about the military 
benefits. From my service on the Committee on Government Reform, I 
think I remember that there was in 2003 $103 billion overpayment in 
pension benefits that was refunded to the Postal Service, and as a part 
of that agreement they were made responsible for the military pension 
costs of the employees. And this bill would reverse those provisions.
  I think it is also worthy to notice that the gentleman from Texas 
(Mr. Hensarling) has pointed out in 1971 the reform efforts put in 
place at the Postal Service, it would be a self-financing agency, and 
with that mandate they were given certain exemptions and advantages 
such as tax and anti-trust. And they are obliged and obligated to 
manage their finances in a manner that covers its full costs.
  We must continue to encourage the Postal Service to be self-
sufficient and not be subsidized by the taxpayer. I urge my colleagues 
to vote in favor of the amendment.
  Mr. TOM DAVIS of California. Mr. Chairman, I yield myself such time 
as I may consume.
  Let me just note for the record that we did agree at that point as a 
condition of releasing overpayment by the Post Office Department into 
pension funds that they, for a temporary period of time, fund the 
military for CSRS retirees. But we awaited studies; and the President's 
own commission, which has been quoted here, came back and recommended 
that in point of fact the post office should not be making these 
payments, that it should to go to the general fund side of the ledger.
  Mr. Chairman, I yield 2 minutes to the gentleman from New York (Mr. 
McHugh).
  Mr. McHUGH. Mr. Chairman, a couple points with respect to the 
gentlewoman's comments about the 1971 legislation. She is right, but 
she is also a little behind because that is why we are making changes.
  H.R. 22, in fact, applies anti-trust provisions against the Postal 
Service, overturning the 1971 bill. We require taxes paid on the 
business computations for the competitive products portion of the 
Postal Service, again overchanging the 1971 bill. So that is what this 
is all about. I am glad I had the opportunity to update the 
gentlewoman's perspective on that.
  The other thing I would note is that, again, this would be the only 
Federal agency treated in this manner, the only Federal agency. And 
there is really no justification for it. I have heard a great deal 
about budget scoring, and I cannot speak as to the author of this 
amendment, but I suspect he along with others including myself, stood 
in the well of this House many, many times and spoke about the moronic 
perspective of scoring when it came to tax cuts. We did not want that 
kind of scoring, the same kind of scoring that is applied here. We 
wanted dynamic scoring, and if we were dynamically scoring, I think we 
would be referring to the statistics provided by others including the 
Envelope Manufacturing

[[Page 17645]]

Association that says if this amendment were to pass, it would result 
in the loss of $64 billion in tax revenues from those firms that use 
the Postal Service for mailing and such that pay sales taxes and 
others; 245,000 jobs would be impacted just in the first year; and 3.5 
million jobs would be impacted over 10 years, all of whom are 
taxpayers.
  So if we are dynamically scoring, as all of us who were so strongly 
in support of it when it came to the tax cuts, this would not be even 
an issue.
  Let me just state, here is what the Postal Service says about this 
particular amendment: ``If the Hensarling amendment is adopted, the 
Postal Service will be in worse financial situation then it occupied 
before the CSRS overfunding was identified and corrected. If the 
Hensarling amendment is adopted, the total of these four payments would 
be $97 billion over the next 10 years.'' That is a tax on the American 
mailing public, and I think we ought to resist this amendment.

                              {time}  2100

  Mr. HENSARLING. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman 
from New Jersey (Mr. Garrett).
  Mr. GARRETT of New Jersey. Mr. Chairman, I rise today to speak in 
favor of the amendment introduced by my friend, the gentleman from 
Texas (Mr. Hensarling), that would encourage fiscal responsibility by 
the U.S. Postal Service. I, along with others, support the Postal 
Service that is staffed by thousands of resourceful and hard-working 
individuals who I believe have the ability, by themselves, to adapt and 
create a smoothly functioning postal system that can really be a world 
leader for us all.
  I support the Postal Service and the valuable contribution that it 
provides to our economy, and the common-sense bill before us will move 
the U.S. Postal Service in the right direction so it will no longer be 
a drain on the U.S. taxpayer. This amendment will encourage the Postal 
Service to move forward, to take responsibility for its own 
liabilities, just as other large corporations have to do.
  Recently Fortune Magazine ranked the Postal Service as the 44th 
largest corporation in the world and looked at the many assets that 
they have. Unfortunately, the Postal Service has not taken advantage of 
those assets and its potential. Instead, it has not moved in the 
direction of other industrialized nations in providing us with a mail 
system of innovation, financial soundness, and quality of services.
  That study also looked at nine different postal services, two private 
and seven from industrial nations, and in seven out of those nine 
categories found the U.S. Postal Service ranked last.
  I believe that the Hensarling amendment will change that. It will 
move the Postal Service of this country in the right direction, make it 
more efficient, and, most importantly, take the burden off the U.S. 
taxpayer.
  For that reason, Mr. Chairman, I encourage my colleagues to support 
the gentleman from Texas in his amendment.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 1\1/2\ minutes to 
the gentlewoman from Michigan (Mrs. Miller).
  Mrs. MILLER of Michigan. Mr. Chairman, I thank the gentleman for 
yielding me this time, and I certainly appreciate the intentions of my 
good friend from Texas in his amendment tonight, but this amendment 
would do absolutely nothing to stop a stamp rate increase for next 
year. In fact, it seems very clear this amendment would have the 
opposite impact. In fact, it would trigger large increases in the 
postal rates.
  These rate increases would be caused by denying the Postal Service 
access to billions of dollars which are set aside in their escrow 
accounts, because the Postal Service will be forced actually to 
completely finance the escrow requirement as well as the annual health 
benefit premium for all of their retirees. This will not stop what we 
are all trying to stop, and that is a postal rate increase, which is 
really a tax. I guess you can call it a stamp tax, if you want, on the 
American people.
  This amendment is not fiscally conservative. In fact, if you are an 
individual who just mails a couple of letters a year, I suppose it does 
not matter if you have a tax increase, a stamp tax increase, of 1 or 2 
cents a letter. However, think if you are a catalogue mailing company 
or a large user of the Postal Service.
  This amendment would also require the Postal Service to spend all of 
their savings released under H.R. 22 on paying the Postal Service's 
unfunded health care liability rather than giving the Postal Service 
some much-needed flexibility to use on other pressing issues.
  This underlying bill is based on the premise of making the Postal 
Service more cost-effective, more cost-efficient, making it run in a 
more businesslike, user-friendly type of way, and this amendment, I 
believe, is a step backward. So I urge my colleagues to vote ``no'' on 
this amendment and also to support the underlying bill, which is a 
great bipartisan effort and a great bipartisan piece of legislation.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I yield 1 minute to the 
gentleman from Illinois (Mr. Davis).
  Mr. DAVIS of Illinois. Mr. Chairman, the argument for budget-neutral 
reform reminds me of the teaching of Frederick Douglass when he said 
that he understood one thing, if he did not understand anything else; 
and that is that in this world we may not get everything that we pay 
for, but we most certainly will pay for everything that we get.
  As the Comptroller General has pointed out, respected accounting 
principles indicate that the burden for payment for service belongs to 
the beneficiary. The U.S. Government benefited from military service, 
and it should cover the cost.
  To ensure predictable rate increases, H.R. 22 employs strict rate 
caps at the subclass level, prohibiting rate increases at a rate 
greater than CPI. These restrictions, however, make it important that 
the Service have access to the one-third of its own money to help cover 
operational costs if need be. Otherwise there is no alternative but to 
accumulate debt.
  Mr. Chairman, the Hensarling amendment would have us embedded in 
debt. I oppose it.
  Mr. HENSARLING. Mr. Chairman, I yield myself the balance of my time.
  Mr. Chairman, 2 years ago the Postal Service was here asking for $7 
billion from the taxpayer. They come here tonight asking for $6 billion 
from the taxpayers. Again, I ask the question: Where will it all end?
  If we do not change the way we do business in Washington, we will 
have to double taxes on future generations just to balance the budget. 
Somehow, somewhere, some way, someday we must stop the madness of the 
spending.
  I agree with many of my colleagues that there are only two choices: 
Either ratepayers or taxpayers are going to pick up this tab. I vote 
for ratepayers.
  Mr. TOM DAVIS of Virginia. Mr. Chairman, I urge opposition to this. 
First of all, the Postal Service is self-operating. What it raises, it 
spends. The increased money that was added was because of the anthrax 
issue. It was a national security issue.
  This amendment is bad for the economy. We are talking about 8 percent 
of GDP now having at least a 2 percent increase. In fact, under this 
amendment, it would not just be a rate increase, this would be 
basically a rate shock to Americans. It would be far in excess of that.
  This hurts Americans' competitiveness, it is bad for the economy, and 
I urge my colleagues to vote against this amendment.
  Mrs. MALONEY. Mr. Chairman, I rise in opposition to the Hensarling 
amendment.
  This amendment would strip critical provisions contained in the 
underlying bill.
  The gentleman's amendment would require the Postal Service to 
continue to be responsible for the military retirement costs of its 
employees.
  No agency other than the Postal Service is responsible for the 
military retirement costs that Treasury pays for all other Federal 
employees.
  It is absolutely essential to the long-term survival of the Postal 
Service to relieve it and postal customers of this $27 billion burden 
by returning that responsibility to the Treasury.

[[Page 17646]]

  Additionally, his amendment would mandate that 100 percent, rather 
than \2/3\, of the Civil Service Retirement System savings that 
resulted from the fix Congress enacted 2 years ago and are currently in 
an escrow account, must go to the Retiree Health Benefits Fund.
  This provision would have the effect of increasing postal rates by 
preventing the USPS from using these savings to help keep postal rates 
stable.
  If Congress had not fixed this formula, the Postal Service's required 
share of this Federal government retirement fund would have resulted in 
a long-term overpayment of more than $70 billion.
  These savings were intended to provide the Postal Service with much-
needed fiscal relief and a promise of stable postal rates until 2006.
  A vote for this amendment would undermine the very reason why this 
bill is on the Floor today . . . to enact long overdue reforms of the 
Postal Service.
  I urge my colleagues to vote ``no.''
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Texas (Mr. Hensarling).
  The amendment was rejected.
  The CHAIRMAN. It is now in order to consider amendment No. 4 printed 
in House Report number 109-184.


          Sequential Votes Postponed in Committee of the Whole

  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, proceedings will 
now resume on those amendments on which further proceedings were 
postponed, in the following order: Amendment No. 1 offered by the 
gentleman from Indiana (Mr. Pence) and amendment No. 2 offered by the 
gentleman from Arizona (Mr. Flake).
  The Chair will reduce to 5 minutes the time for the second electronic 
vote in this series.


                  Amendment No. 1 Offered by Mr. Pence

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment offered by the gentleman from Indiana (Mr. Pence) on 
which further proceedings were postponed and on which the noes 
prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 82, 
noes 345, not voting 6, as follows:

                             [Roll No. 428]

                                AYES--82

     Aderholt
     Akin
     Barrett (SC)
     Bartlett (MD)
     Bass
     Beauprez
     Blackburn
     Blunt
     Bonilla
     Boustany
     Brady (TX)
     Burgess
     Buyer
     Cantor
     Carter
     Chabot
     Chocola
     Cole (OK)
     Conaway
     Cox
     Culberson
     Deal (GA)
     DeLay
     Feeney
     Flake
     Foxx
     Franks (AZ)
     Garrett (NJ)
     Gingrey
     Gohmert
     Goodlatte
     Granger
     Hall
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hostettler
     Hunter
     Hyde
     Inglis (SC)
     Issa
     Istook
     Jindal
     Johnson, Sam
     Jones (NC)
     King (IA)
     Kingston
     Kirk
     Mack
     Marchant
     McCaul (TX)
     McCrery
     McHenry
     McMorris
     Miller (FL)
     Miller, Gary
     Musgrave
     Myrick
     Neugebauer
     Norwood
     Otter
     Paul
     Pence
     Pitts
     Poe
     Price (GA)
     Rohrabacher
     Royce
     Ryun (KS)
     Sessions
     Shadegg
     Stearns
     Sullivan
     Tancredo
     Thornberry
     Tiahrt
     Weldon (FL)
     Westmoreland
     Whitfield
     Wilson (SC)

                               NOES--345

     Abercrombie
     Ackerman
     Alexander
     Allen
     Andrews
     Baca
     Bachus
     Baird
     Baker
     Baldwin
     Barrow
     Barton (TX)
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Blumenauer
     Boehlert
     Boehner
     Bonner
     Bono
     Boozman
     Boren
     Boswell
     Boucher
     Boyd
     Bradley (NH)
     Brady (PA)
     Brown (OH)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Burton (IN)
     Butterfield
     Calvert
     Camp
     Cannon
     Capito
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Case
     Castle
     Chandler
     Clay
     Cleaver
     Clyburn
     Coble
     Conyers
     Costa
     Costello
     Cramer
     Crenshaw
     Crowley
     Cubin
     Cuellar
     Cummings
     Cunningham
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (KY)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Doolittle
     Doyle
     Drake
     Dreier
     Duncan
     Edwards
     Ehlers
     Emanuel
     Emerson
     Engel
     English (PA)
     Eshoo
     Etheridge
     Evans
     Everett
     Farr
     Fattah
     Ferguson
     Filner
     Fitzpatrick (PA)
     Foley
     Forbes
     Ford
     Fortenberry
     Fossella
     Frank (MA)
     Frelinghuysen
     Gallegly
     Gerlach
     Gilchrest
     Gillmor
     Gonzalez
     Goode
     Gordon
     Graves
     Green (WI)
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Gutknecht
     Harman
     Harris
     Hart
     Hastings (FL)
     Hastings (WA)
     Herseth
     Higgins
     Hinchey
     Hobson
     Hoekstra
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Hulshof
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Keller
     Kelly
     Kennedy (MN)
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     King (NY)
     Kline
     Knollenberg
     Kolbe
     Kucinich
     Kuhl (NY)
     LaHood
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lofgren, Zoe
     Lowey
     Lucas
     Lungren, Daniel E.
     Lynch
     Maloney
     Manzullo
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy
     McCollum (MN)
     McCotter
     McDermott
     McGovern
     McHugh
     McIntyre
     McKeon
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Menendez
     Mica
     Michaud
     Millender-McDonald
     Miller (MI)
     Miller (NC)
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (KS)
     Moran (VA)
     Murphy
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Ney
     Northup
     Nunes
     Nussle
     Oberstar
     Olver
     Ortiz
     Osborne
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pearce
     Pelosi
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Platts
     Pombo
     Pomeroy
     Porter
     Price (NC)
     Pryce (OH)
     Putnam
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Rehberg
     Reichert
     Renzi
     Reyes
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Ryan (WI)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Saxton
     Schakowsky
     Schiff
     Schwartz (PA)
     Schwarz (MI)
     Scott (GA)
     Scott (VA)
     Sensenbrenner
     Serrano
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skelton
     Slaughter
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Sodrel
     Solis
     Souder
     Spratt
     Stark
     Strickland
     Stupak
     Sweeney
     Tanner
     Tauscher
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Tiberi
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Walden (OR)
     Walsh
     Wamp
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Weldon (PA)
     Weller
     Wexler
     Wicker
     Wilson (NM)
     Wolf
     Woolsey
     Wu
     Wynn
     Young (AK)
     Young (FL)

                             NOT VOTING--6

     Cooper
     Gibbons
     Hinojosa
     Miller, George
     Obey
     Oxley

                              {time}  2128

  Messrs. PETERSON of Pennsylvania, UDALL of Colorado, STUPAK, RAMSTAD, 
Ms. HARMAN, Ms. CARSON, Mrs. NORTHUP, and Ms. HART changed their vote 
from ``aye'' to ``no.''
  Mr. MACK and Mr. KIRK changed their vote from ``no'' to ``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  Stated against:
  Mr. HINOJOSA. Mr. Speaker, on rollcall No. 428, had I been present, I 
would have voted ``no.''


                  Amendment No. 2 Offered by Mr. Flake

  The CHAIRMAN. The pending business is the demand for a recorded vote 
on the amendment offered by the gentleman from Arizona (Mr. Flake) on 
which further proceedings were postponed and on which the noes 
prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 51, 
noes 379, not voting 3, as follows:

[[Page 17647]]



                             [Roll No. 429]

                                AYES--51

     Akin
     Barrett (SC)
     Bartlett (MD)
     Blackburn
     Brady (TX)
     Buyer
     Carter
     Chocola
     Conaway
     Cox
     Culberson
     Duncan
     Feeney
     Flake
     Foxx
     Franks (AZ)
     Garrett (NJ)
     Gingrey
     Harris
     Hayworth
     Hensarling
     Inglis (SC)
     Jindal
     Johnson, Sam
     King (IA)
     Kingston
     Kolbe
     Linder
     Lungren, Daniel E.
     Mack
     McCaul (TX)
     McHenry
     McMorris
     Mica
     Miller (FL)
     Musgrave
     Myrick
     Neugebauer
     Otter
     Paul
     Pence
     Poe
     Rohrabacher
     Royce
     Sessions
     Shadegg
     Stearns
     Sullivan
     Tancredo
     Weldon (FL)
     Wilson (SC)

                               NOES--379

     Abercrombie
     Ackerman
     Aderholt
     Alexander
     Allen
     Andrews
     Baca
     Bachus
     Baird
     Baker
     Baldwin
     Barrow
     Barton (TX)
     Bass
     Bean
     Beauprez
     Becerra
     Berkley
     Berman
     Berry
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boswell
     Boucher
     Boustany
     Boyd
     Bradley (NH)
     Brady (PA)
     Brown (OH)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Butterfield
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Case
     Castle
     Chabot
     Chandler
     Clay
     Cleaver
     Clyburn
     Coble
     Cole (OK)
     Conyers
     Cooper
     Costa
     Costello
     Cramer
     Crenshaw
     Crowley
     Cubin
     Cuellar
     Cummings
     Cunningham
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (KY)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     DeLay
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Doolittle
     Doyle
     Drake
     Dreier
     Edwards
     Ehlers
     Emanuel
     Emerson
     Engel
     English (PA)
     Eshoo
     Etheridge
     Evans
     Everett
     Farr
     Fattah
     Ferguson
     Filner
     Fitzpatrick (PA)
     Foley
     Forbes
     Ford
     Fortenberry
     Fossella
     Frank (MA)
     Frelinghuysen
     Gallegly
     Gerlach
     Gilchrest
     Gillmor
     Gohmert
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green (WI)
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Gutknecht
     Hall
     Harman
     Hart
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hefley
     Herger
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Hobson
     Hoekstra
     Holden
     Holt
     Honda
     Hooley
     Hostettler
     Hoyer
     Hulshof
     Hunter
     Hyde
     Inslee
     Israel
     Issa
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, E. B.
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Keller
     Kelly
     Kennedy (MN)
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     King (NY)
     Kirk
     Kline
     Knollenberg
     Kucinich
     Kuhl (NY)
     LaHood
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Lipinski
     LoBiondo
     Lofgren, Zoe
     Lowey
     Lucas
     Lynch
     Maloney
     Manzullo
     Marchant
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy
     McCollum (MN)
     McCotter
     McCrery
     McDermott
     McGovern
     McHugh
     McIntyre
     McKeon
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Menendez
     Michaud
     Millender-McDonald
     Miller (MI)
     Miller (NC)
     Miller, Gary
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (KS)
     Moran (VA)
     Murphy
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Osborne
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pearce
     Pelosi
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Pomeroy
     Porter
     Price (GA)
     Price (NC)
     Pryce (OH)
     Putnam
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Rehberg
     Reichert
     Renzi
     Reyes
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Ryan (WI)
     Ryun (KS)
     Sabo
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Saxton
     Schakowsky
     Schiff
     Schwartz (PA)
     Schwarz (MI)
     Scott (GA)
     Scott (VA)
     Sensenbrenner
     Serrano
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skelton
     Slaughter
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Sodrel
     Solis
     Souder
     Spratt
     Stark
     Strickland
     Stupak
     Sweeney
     Tanner
     Tauscher
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Tiahrt
     Tiberi
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Walden (OR)
     Walsh
     Wamp
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Weldon (PA)
     Weller
     Westmoreland
     Wexler
     Whitfield
     Wicker
     Wilson (NM)
     Wolf
     Woolsey
     Wu
     Wynn
     Young (AK)
     Young (FL)

                             NOT VOTING--3

     Gibbons
     Miller, George
     Oxley

                              {time}  2136


                      Announcement by the Chairman

  The CHAIRMAN (during the vote). Members are advised that 2 minutes 
remain in this vote.
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  The CHAIRMAN. The question is on the committee amendment in the 
nature of a substitute.
  The committee amendment in the nature of a substitute was agreed to.
  The CHAIRMAN. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Bass) having assumed the chair, Mr. Simpson, Chairman of the Committee 
of the Whole House on the State of the Union, reported that that 
Committee, having had under consideration the bill (H.R. 22) to reform 
the postal laws of the United States, pursuant to House Resolution 380, 
he reported the bill back to the House with an amendment adopted by the 
Committee of the Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  The question is on the committee amendment in the nature of a 
substitute.
  The committee amendment in the nature of a substitute was agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. TOM DAVIS of Virginia. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on passage will be followed by a 5-minute vote on the 
motion to suspend the rules and pass H.R. 3339.
  The vote was taken by electronic device, and there were--ayes 410, 
noes 20, not voting 3, as follows:

                             [Roll No. 430]

                               AYES--410

     Abercrombie
     Ackerman
     Aderholt
     Alexander
     Allen
     Andrews
     Baca
     Bachus
     Baird
     Baker
     Baldwin
     Barrow
     Bartlett (MD)
     Barton (TX)
     Bass
     Bean
     Beauprez
     Becerra
     Berkley
     Berman
     Berry
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Blackburn
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boswell
     Boucher
     Boustany
     Boyd
     Bradley (NH)
     Brady (PA)
     Brady (TX)
     Brown (OH)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Butterfield
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Carter
     Case
     Castle
     Chabot
     Chandler
     Clay
     Cleaver
     Clyburn
     Coble
     Cole (OK)
     Conaway
     Conyers
     Cooper
     Costa
     Costello
     Cox
     Cramer
     Crenshaw
     Crowley
     Cubin
     Cuellar
     Cummings
     Cunningham
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (KY)
     Davis (TN)
     Davis, Tom
     Deal (GA)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     DeLay
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Doolittle
     Doyle
     Drake
     Dreier
     Duncan
     Edwards
     Ehlers
     Emanuel
     Emerson
     Engel
     English (PA)
     Eshoo
     Etheridge
     Evans
     Everett
     Farr
     Fattah
     Ferguson
     Filner
     Fitzpatrick (PA)
     Foley
     Forbes
     Ford
     Fortenberry
     Fossella
     Foxx
     Frank (MA)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gilchrest
     Gillmor
     Gingrey
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     Gordon
     Granger
     Graves
     Green (WI)
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Gutknecht
     Hall
     Harman

[[Page 17648]]


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                                NOES--20

     Akin
     Barrett (SC)
     Chocola
     Culberson
     Davis, Jo Ann
     Feeney
     Flake
     Franks (AZ)
     Gohmert
     Hensarling
     Istook
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     Musgrave
     Nussle
     Otter
     Paul
     Pence
     Royce
     Shadegg
     Weldon (FL)

                             NOT VOTING--3

     Gibbons
     Miller, George
     Oxley

                              {time}  2154

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________