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Senate OKs postal reform

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WASHINGTON — A bill intended to improve the finances and operations of the Postal Service won Senate approval Thursday despite.

The Senate bill was passed by voice vote. The House passed similar legislation by a vote of 410-20 in July. The two versions will now go to conference committee to work out differences.

It's crucial to change the way post offices operate, the sponsors of the Senate bill said in a joint statement. "Under its current business model, the Postal Service's financial future is not viable," said Sens. Susan Collins, R-Maine, and Thomas Carper, D-Del.

Senate action was welcomed by Rep. Tom Davis, R-Va., who ushered the bill through the House.

"Congress is not only helping move the Postal Service into the 21st century, but we are addressing the structural, legal and financial constraints that have brought the Postal Service toward a financial death spiral," said Davis, chairman of the House Government Reform Committee. "The health of the Postal Service is important to the entire economy."

More than 9 million American jobs, $900 billion in commerce and 9 percent of the gross domestic product depend upon mail and package delivery.

Also happy was William H. Young, president of the National Association of Letter Carriers, who said, "This is an important step, one that hopefully will lead to speedy action by the House-Senate Conference to attain final language for the president's signature."

And Robert E. McLean, head of the Mailer's Council, a business group, called the approval "a tribute to bipartisan congressional action and a united mailing community — mailers, unions and management associations — all fighting for a financially healthy Postal Service."

While postal management has worked with Congress for several years to get reform legislation, late last month the postal governing board announced opposition to the measure.

"We believe there are critical elements missing from this bill, as well as numerous burdensome provisions that would make it extremely difficult for the Postal Service to function in a modern, competitive environment," the Postal Service's governing board said in a letter to Collins, who chairs the Senate Homeland Security and Governmental Affairs Committee.

Top postal officials could not immediately be reached Thursday for comment on passage of the measure.

The bill seeks to improve postal finances, but also gives more power to the independent Postal Rate Commission, changing it to a regulatory agency with authority to rule on postal rates and other activities.

Major provisions of the measure, which the post office has sought, include relief from a requirement to place more than $3 billion each year in an escrow account and transfer certain retirement costs back to the Treasury.

The White House opposes those steps because they would increase the federal deficit. Office of Management and Budget officials have indicated they might recommend that President Bush veto the bill because of those provisions.

The escrow account requirement was instituted in 2003, when an analysis concluded that the post office was overfunding its retirement accounts. Congress voted to let it reduce retirement payments and use the money to pay off debt, after which the funds were to go into escrow until Congress decided that to do with them.

That requirement was the sole reason for the 2-cent postal rate increase in January, postal officials said. The bill would allow the post office to keep the money for its operations, possibly delaying future rate increases.

The 2003 law also changed how retirement is funded for postal workers who formerly served in the military. Funding benefits for the portion of their retirement based on time in the armed services was shifted from Treasury to the post office, making it the only federal agency with such responsibility. The new measure would move that cost back to Treasury.