Postal reform was a key legislative focus with the introduction of bills in both the House and Senate. While House bill H.R. 4341, Postal Accountability and Enhancement Act, was reported favorably to the full House, and the Senate's similarly named S. 2468 was placed on the legislative calendar, no final action was taken before Congress' adjournment.

Despite some differences, both bills provide for a number of changes to reform the outdated Postal Reorganization Act of 1970. These include pricing flexibility and regulatory oversight. In addition, both bills would have corrected the financial burdens imposed by P.L. 108-18, the Postal Civil Service Retirement System Funding Reform Act of 2003, which requires the Postal Service to fund an escrow account, beginning in 2006, for savings resulting from the Act. The Act also requires the Postal Service to contribute to the funding of retirement benefits earned by Postal Service employees while serving in the military. This funding was previously the responsibility of the Treasury.

Postmaster General John E. Potter and Board of Governors Chairman S. David Fineman testified several times before the Senate Governmental Affairs Committee and the House Government Reform Special Panel on the Postal Service on issues including postal reform and recommendations made by the President's Commission on the Postal Service.

In November 2004, Congress approved an omnibus appropriations bill for 2005 that provides the Postal Service with $29 million for revenue forgone debt repayment, $61.7 million to provide free mail for the blind and overseas voters, and $507 million for emergency preparedness to fund the acquisition and deployment of biohazard detection systems.

H.R. 2673, the Consolidated Appropriations Act, 2004, enacted as Public Law 108-199, extended the sales period for the Breast Cancer Research semipostal, first issued in 1998, for an additional two years. The period was due to expire at the end of calendar year 2003.

Throughout the year, the Postal Service advised legislators and their staffs on a wide range of issues affecting the nation's postal system, including aviation security and the ongoing deployment of biohazard detection systems in major mail-processing facilities throughout the nation.

These issues are discussed in further detail in the financial review section of this report.