Postal Accountability and Enhancement Act of 2006

On December 9, 2006, after several years of discussion and study, Congress passed the far-reaching Postal Accountability and Enhancement Act, H.R. 6407. President Bush signed the act into law on December 20, 2006. The act divided postal products into market-dominant and competitive categories; created the Postal Regulatory Commission (PRC) out of the Postal Rate Commission and increased the PRC’s regulatory powers; returned the obligation to pay military service costs to the Department of Treasury; and replaced escrow requirements to fund retiree health benefits.

The act included other changes to the way the Postal Service has operated since the Postal Reorganization Act of 1970.


Any rate changes that take place in the 12 months after passage of the Postal Accountability and Enhancement Act would be determined under the regulations in place prior to passage of the act.


Increases in the rates for market-dominant products such as First-Class Mail will be restricted by a cap tied to the Consumer Price Index for 10 years. This cap would be reviewed by the PRC at that time.


Increases in competitive products such as Express Mail will not be capped. Rates will cover attributable costs and contribute to institutional costs.


The Postal Service must establish a set of service standards for its market-dominant products within one year and then develop a plan, to be submitted to Congress, for meeting these standards.

The PRC will have subpoena power over the Postal Service and can levy fines against it if the Postal Service does not take remedial action when the PRC finds a complaint filed regarding rates, regulations, or service standards has merit.


Governors will serve for seven- rather than nine-year terms.


The PRC will report to Congress every five years on the effectiveness of the Postal Accountability and Enhancement Act, with suggestions, if appropriate.


At least four of the nine Governors must have experience in managing organizations employing 50,000 or more people.


The Postal Regulatory Commission must create an Office of Inspector General. The Board of Governors will continue to appoint the Inspector General of the Postal Service.


The act abolished the requirement for fact-finding, replacing it with a requirement for mediation.


Injured employees must use annual, sick, or leave without pay for three days before they can collect continuation of pay benefits.