To the Editor:

Contrary to the implication of an April 6 headline ("Bill in Congress Pushes Postal Service in Direction of Competing with Banks," page 1), the Postal Service has no plans for head-on competition with banks and financial service providers.

Over the last several years a debate has been heating up over how the Postal Service should meet its responsibility to deliver stable and predictable prices in a changing market environment full of increased technological threats.

Rep. John McHugh, chairman of the House subcommittee on the Postal Service, has been working diligently to find solutions.

HR 22 is the first major overhaul of the legislation governing postal activities since the Postal Reform Act of 1970, which created the U.S. Postal Service and changed its status from a tax-subsidized government bureaucracy, the Post Office Department, to the current, self-supporting, highly efficient public service that it is today. Reform is essential to the long-term viability of the Postal Service.

It is clear that the status quo will not allow the Postal Service to remain able to provide the dependable, economical, universal service that American residents and businesses depend on.

The proposed legislation would give greater freedom to compete while establishing new rules that ensure fair competition and at the same time protect the public interest.

While it is true that the current version of HR 22 does provide for the creation of a corporation through which nonpostal products and services could be offered, the intent of this provision is to avoid the charge of subsidizing competitive products and services with revenue from noncompetitive operations.

Although the Postal Service has provided a valuable money order service for decades to millions of Americans who do not have bank accounts, there is no large-scale plan to start a retail banking presence in post offices. There is no plan to begin a privately chartered financial institution. Frank P. Brennan Jr. Vice president, corporate relations, U.S. Postal Service, Washington

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