Postal Service Board Postpones Decision on Rate-Hike Request

U. S. Postal Service letter carrier Terry Caldwell, of Topsham, Maine, background, delivers mail in Bath, Maine, Monday, Dec. 5, 2011. The Postal Service, which has been losing money for five years, announced Monday that it would close 252 out of 461 mail processing centers across the country starting next April. (AP Photo/Pat Wellenbach)
National Journal
Billy House
Sept. 5, 2013, 3:30 p.m.

The U.S. Postal Ser­vice on Thursday post­poned un­til late Septem­ber its de­cision on wheth­er to re­quest a postal-rate in­crease — which some out­side groups have said they fear could reach as high as 10 per­cent.

A state­ment re­leased by the Postal Ser­vice’s board of gov­ernors con­firmed that the pan­el met Thursday and, as part of its agenda in a closed-door meet­ing, “con­sidered pri­cing is­sues, in­clud­ing the pos­sib­il­ity of fil­ing for price ad­just­ments.”

The gov­ernors, the state­ment said, “con­tin­ue to listen to stake­hold­ers and have post­poned fi­nal pri­cing de­cisions un­til the next sched­uled Board of Gov­ernors meet­ing” sched­uled for Sept. 24 and 25.

The board is weigh­ing the move as the Postal Ser­vice con­tin­ues to bleed money — as much as $19 bil­lion since early 2012. The in­creased costs would hit every­one, in­clud­ing in­di­vidu­als who put a stamp on a piece of mail. Co­ali­tions and groups that rep­res­ent big mail­ers — like magazines, news­pa­pers, and dir­ect-mar­ket­ing groups — have been lob­by­ing ag­gress­ively against any big hike.

Mem­bers of Con­gress led by House Over­sight and Gov­ern­ment Re­form Com­mit­tee Chair­man Dar­rell Issa, R-Cal­if., have been wrest­ling with ways to cut the Postal Ser­vice’s costs, such as end­ing Sat­urday mail de­liv­ery.

“It’s an agency in crisis,” Issa said this sum­mer, “but it’s also an en­tity that must be saved, but it’s an en­tity that needs to trim costs.”

Postal-rate in­creases are capped at in­fla­tion, as meas­ured by the Con­sumer Price In­dex. That would mean an al­low­able in­crease of about 2 per­cent for im­ple­ment­a­tion in Janu­ary.

But a 2006 law also al­lows the Postal Ser­vice to seek a high­er rate in­crease bey­ond the CPI in in­stances of “ex­i­gent” cir­cum­stances — and that is what is un­der con­sid­er­a­tion now. Such re­quests are to be made to the Postal Reg­u­lat­ory Com­mis­sion, which has 90 days to pass them.

In 2010, the Postal Ser­vice sub­mit­ted a re­quest for an ex­i­gent rate in­crease of 5.6 per­cent — far avove the CPI cap — that would have brought in more than $3 bil­lion an­nu­ally. But the mail­ers fought that in­crease in court and it was de­railed.

Some of the same groups that lob­bied against that hike said Thursday they were en­cour­aged by the de­cision to delay a new form­al re­quest for such an “ex­i­gent” rate in­crease.

“This ac­tion af­fords us ad­di­tion­al time to work with them and de­tail the dev­ast­at­ing im­pact a rate in­crease would have on the mail­ing in­dustry and the 8.4 mil­lion jobs that de­pend on it,” said Mary Bern­er, pres­id­ent and CEO of the As­so­ci­ation of Magazine Me­dia, in a state­ment.

“It also gives us, the Postal Ser­vice, and the en­tire mail­ing in­dustry ad­di­tion­al time to con­tin­ue work­ing in con­cert to con­vince Con­gress that the solu­tion to the Postal Ser­vice’s prob­lems lies not in rate in­creases, but in mean­ing­ful postal-re­form le­gis­la­tion,” she said.

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