Big Mailers Bracing for Steep Rate-Hike Request From Postal Service

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
Add to Briefcase
See more stories about...
Billy House
Aug. 27, 2013, 3:30 p.m.

A co­ali­tion of magazine, news­pa­per, print­ing, and dir­ect-mar­ket­ing groups warns that the U.S. Postal Ser­vice may de­cide next week to re­quest that postal rates be raised sig­ni­fic­antly — per­haps by as much as 10 per­cent — un­der the claim of “ex­i­gent” cir­cum­stances.

The Board of Gov­ernors for the Postal Ser­vice, which is bleed­ing money, con­tin­ues to ex­plore “the pos­sib­il­ity of fil­ing for price ad­just­ment later this year,” spokes­man Dave Parten­heimer said Tues­day.

But he said no fi­nal de­cision has been made.

However, the board is sched­uled to meet in a private tele­con­fer­ence Sept. 5 with the top­ic of “pri­cing” in­cluded on its agenda. Fear­ing the board plans to vote to re­quest an across-the-board rate in­crease that far ex­ceeds in­fla­tion, the Af­ford­able Mail Al­li­ance of more than 50 com­mer­cial or­gan­iz­a­tions that rep­res­ent news­pa­pers, magazines, and dir­ect mail­ers has launched a pree­mpt­ive lob­by­ing ef­fort.

“The Af­ford­able Mail Al­li­ance un­der­stands that the Board of Gov­ernors will be con­sid­er­ing a po­ten­tial ex­i­gency rate in­crease on your con­fer­ence call on Sept. 5,” de­clared let­ters by the group to the board’s chair­man, Mickey Barnett, and oth­er board mem­bers.

Not­with­stand­ing the Postal Ser­vice’s on­go­ing fin­an­cial pre­dic­a­ment, warns those let­ters, a sig­ni­fic­ant rate in­crease could be self-de­feat­ing to re­cov­er­ing postal fin­an­cial sta­bil­ity, caus­ing “severely ad­verse and likely ir­re­voc­able con­sequences for mail volume and rev­en­ue.”

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 late Janu­ary 2014 im­ple­ment­a­tion.

But a 2006 law also al­lows the Postal Ser­vice to seek a high­er rate in­crease bey­ond the CPI in in­stances of “ex­i­gent” cir­cum­stances. In craft­ing that lan­guage, Sen. Susan Collins, R-Maine, has said she en­vi­sioned ex­treme cir­cum­stances, like ter­ror­ist at­tacks or nat­ur­al dis­asters.

Such re­quests are to be made to the Postal Reg­u­lat­ory Com­mis­sion, which has 90 days to act on them. In 2010, the Postal Ser­vice sub­mit­ted such a re­quest for an ex­i­gent rate in­crease of 5.6 per­cent — far more than the CPI cap — that would have brought in more than $3 bil­lion more an­nu­ally.

But the mail­ers fought that in­crease in court, and it was de­railed.

The Postal Ser­vice con­tin­ues to hem­or­rhage money — as much as $19 bil­lion since early 2012. And there are ex­pect­a­tions that ef­forts to use “ex­i­gent” cir­cum­stances as a basis for a sig­ni­fic­ant rate in­crease are be­ing re­kindled.

The high­er costs would hit every­one, in­clud­ing in­di­vidu­als who put a stamp on a piece of mail. However, the AMA’s let­ters spell out that the mail­ing in­dustry and its sup­pli­ers are re­spons­ible for $1.3 tril­lion in sales an­nu­ally, and nearly 8 mil­lion private-sec­tor jobs.

“This is not a solu­tion,” said Mary Bern­er, pres­id­ent and CEO of the As­so­ci­ation of Magazine Me­dia, in an in­ter­view.

Rather, she said it will in­stead pro­duce a “lose-lose situ­ation” for Postal Ser­vice con­sumers and the ser­vice it­self. Some magazines, she said, could end up abandon­ing mail use al­to­geth­er and con­cen­trate even more on di­git­al ef­forts, or even go out of busi­ness. A 10 per­cent in­crease would add about $300 bil­lion in costs to the in­dustry, she said.

Bern­er said her group is among those sup­port­ive of ef­forts in Con­gress to come up with “real re­forms” rather than what she says are such short-term ef­forts to ad­dress the Postal Ser­vice’s worsen­ing fin­an­cial situ­ation. However, she said that at­ten­tion and ef­fort will be di­ver­ted from those cur­rent le­gis­lat­ive ef­forts by the re­newed leg­al chal­lenges sure to be moun­ted if the Postal Ser­vice pur­sues an­oth­er “ex­i­gent’ in­crease.

In the House, the Over­sight and Gov­ern­ment Re­form Com­mit­tee already has passed along party lines its new ver­sion of a postal-re­form bill sponsored by Chair­man Dar­rell Issa, R-Cal­if. A bill also has been in­tro­duced by Sens. Tom Carp­er, D-Del., and Tom Coburn, R-Okla., the chair­man and rank­ing mem­ber, re­spect­ively, of the Sen­ate Home­land Se­cur­ity and Gov­ern­ment­al Af­fairs Com­mit­tee.

What We're Following See More »
24% GOOD ENOUGH FOR FIRST PLACE
Macron, Le Pen Lead French Elections
1 hours ago
THE LATEST

"Centrist Emmanuel Macron and far-right politician Marine Le Pen led the first round of voting in France’s presidential election, according to early projections, as voters redrew the political map, placing the European Union at the center of a new political divide. Projections by the Kantar-Sofres polling firm showed Mr. Macron on track to win the first round with about 24% of the vote, ahead of Ms. Le Pen with nearly 22%." The vote marks the end of the country's dominance by conservative and socialist parties. The top vote-getters head to a runoff on May 7.

Source:
MENDING FENCES?
Trump to Deliver Keynote for Holocaust Memorial Event
1 hours ago
THE DETAILS

President Trump will deliver the keynote address for at the National Holocaust Museum's National Day of Remembrance ceremony on Tuesday. He'll speak from the Capitol Rotunda. The move is likely an effort to try to mend fences with Jewish groups. In January, "the White House ignited controversy when it didn't mention Jews or anti-Semitism in a statement on International Holocaust Remembrance Day." And certain members of his inner circle are still suspected of harboring white supremacist or anti-Semitic views."

Source:
MAY NOT SIGN BUDGET BILL WITHOUT IT
Trump Issues Threat on Border Wall Funding
1 hours ago
THE LATEST

"President Trump and his top aides applied new pressure Sunday on lawmakers to include money for a wall on the U.S.-Mexico border in a must-pass government funding bill, raising the possibility of a federal government shutdown this week. In a pair of tweets, Trump attacked Democrats for opposing the wall and insisted that Mexico would pay for it “at a later date,” despite his repeated campaign promises not including that qualifier. And top administration officials appeared on Sunday morning news shows to press for wall funding, including White House budget director Mick Mulvaney, who said Trump might refuse to sign a spending bill that does not include any."

Source:
DOCUMENTS OBTAINED BY U.S. INTEL
Putin-Linked Think Tank Developed Plan to Influence U.S. Election
4 days ago
THE LATEST

A Russian government think tank run by Putin loyalists "developed a plan to swing the 2016 U.S. presidential election to Donald Trump and undermine voters’ faith in the American electoral system." Two confidential documents from the Putin-backed Institute for Strategic Studies, obtained by U.S. intelligence, provide "the framework and rationale for what U.S. intelligence agencies have concluded was an intensive effort by Russia to interfere with the Nov. 8 election."

Source:
HELPED WIN FISA APPROVAL
FBI Relied on Dossier Allegations to Monitor Page
5 days ago
THE LATEST

"The FBI last year used a dossier of allegations of Russian ties to Donald Trump's campaign as part of the justification" to monitor Carter Page, who was then a defense adviser to the Trump campaign. "The dossier has also been cited by FBI Director James Comey in some of his briefings to members of Congress in recent weeks."

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login