Sen. Susan Collins: USPS Proposed Exigent Rate Increases Are Not Justified Under Law
Filed under: postal, postal news, postal reform, press releases, usps
Senator Susan Collins issued the following press release:
SENATOR COLLINS AGREES WITH ARGUMENTS IN MOTION TO BLOCK PROPOSED POSTAL RATE HIKES
Collins Backs Position taken by the Affordable Mail Alliance
WASHINGTON, D.C. – U.S. Senator Susan Collins, Ranking Member of the Senate Homeland Security and Governmental Affairs Committee and author of the landmark postal reform law, the Postal Accountability and Enhancement Act of 2006, issued a statement today in support of the Affordable Mail Alliance’s Motion to Dismiss the U.S. Postal Service’s proposed rate increases.
The Alliance filed its motion with the Postal Regulatory Commission, arguing that the Postal Service’s rationale for its proposed rate hikes does not meet the required criteria to use an exigent rate case – which would allow postal rates to exceed the annual price increase cap.
Senator Collins’ statement follows:
“As the author of the 2006 postal reform law, I completely agree with the Affordable Mail Alliance that the Postal Service’s proposed exigent rate increases are not justified under law.
“Let me be clear. The authority to increase rates under an exigent case can only be used in extreme and unforeseen instances – such as terrorist attacks, natural disasters, and other events that would cause significant and substantial disruptions in service. The law was not meant to be used to remedy poor economic performance or to offset an ongoing marketplace trend, such as the increased use of electronic over traditional mail.
“In addition to not meeting the criteria set forth in the law, the exigent rate case is simply a bad business decision. Rather than help restore postal solvency, an exigent rate increase will worsen the Postal Service’s crisis by further driving down mail volumes and thus revenues. Such action will erode further the Postal Service’s already declining customer base. The Postal Service should be looking at initiatives that will increase volume and attract more consumers. These rate increases will do just the opposite.”
Facts Don’t Lie: Chart Shows True Picture of Postal Service’s Financial Health
Burrus Update 12-2010, July 21, 2010
In a series of recent Updates for union members, I have pointed out that the Postal Service’s current financial difficulties are the result of the Postal Accountability and Enhancement Act of 2006 (PAEA), which imposed on the USPS the onerous burden of pre-funding future retiree healthcare liabilities — in amounts exceeding $5 billion annually over a 10-year period.
Despite the accuracy of my Updates, numerous articles and editorials in the mainstream media have reported somberly on the Postal Service’s desperate financial situation. My response has been that USPS deficits are directly linked to the pre-funding issue, and do not accurately reflect the relationship between postal revenue and expenses related to providing mail service.
A USPS chart [PDF] confirms my analysis: It shows that from 2001 through 2008, minus the pre-funding requirement of the PAEA, the Postal Service experienced a cumulative surplus of more than $14 billion.
This record refutes the screaming headlines that the Postal Service’s financial situation is in need of major surgery if the USPS is to survive far into the future. The chart clearly rebuts the leading sentence of virtually every media report about the Postal Service’ proposed rate increase and the future of mail.
It does not take a genius to look at the true picture of postal finances and conclude that despite the diversion of hard-copy communication and the worst recession in 60 years, the Postal Service has performed admirably. The deficits of 2007 and beyond directly correspond to the future healthcare funding obligation, period.
William Burrus
President
Legislation To Reverse Billions of Dollars Overpaid By Postal Service Into CSRS Clears First Hurdle
NATIONAL ASSOCIATION OF POSTAL SUPERVISORS
LEGISLATIVE AND REGULATORY UPDATE
JULY 22, 2010
POSTAL FINANCIAL REFORM BILL CLEARS FIRST HURDLE
The House postal oversight subcommittee on Wednesday approved legislation to stabilize the finances of the Postal Service by reversing billions of dollars overpaid by USPS into the government’s civil service pension fund and shifting those payments to satisfy future retiree health benefit obligations.
By an 8-1 vote, the subcommittee approved H.R. 5746, the United States Postal Service’s CSRS Obligation Modification Act of 2010, introduced by the panel’s chairman Stephen F. Lynch (D-MA).
The postal financial reform legislation now goes to the full committee — the House Oversight and Government Operations Committee — although the timing of the panel’s action on the bill is uncertain.
A committee vote could get pushed off until early September, with the start of the August Congressional recess looming late next week and the committee still awaiting the “budget score” on the bill from the Congressional Budget Office.
The legislation approved Wednesday is critical to providing a more certain financial footing to the Postal Service, which is on course to post a $7 billion loss this year, much of it due to Congressionally mandated payments for future postal retiree health benefits. The legislation responds to that situation by directing the Office of Personnel Management to more fairly reallocate CSRS retirement benefit liabilities between the Postal Service and the Federal government for employees who worked for both the Post Office Department before 1971 and the Postal Service after that date. The legislation is based upon a consultant’s report to the Postal Regulatory Commission and the USPS Inspector General’s findings that found that antiquated calculation methods were used by OPM in determining the Postal Service’s CSRS payments since 1971, resulting in huge USPS overpayments.
The reallocation of CSRS liabilities — essentially returning to the Postal Service money already paid into the civil service pension fund — could result in the crediting to the Postal Service as much as $75 billion. That recredited amount, under the bill, will be deposited in the Postal Retiree Health Benefits Fund, largely relieving the Postal Service of the immense future retiree health payments required by Congress in the 2006 postal reform law.
Wednesday’s 8-1 vote on a substitute version of the bill fell largely along party lines, with Rep. Brian Bilbray (R-CA) joining the panel’s seven Democrats — Steven Lynch (D-MA), Eleanor Holmes Norton (D-DC), Danny Davis (D-IL), Elijah Cummings (D-MD), Dennis Kucinich (D-OH), William Lacy Clay (D-MO), and Gerry Connolly (D-VA) — to approve the measure. Rep. Jason Chaffetz (R-UT), the top Republican on the subcommittee, cast the lone vote of disapproval, citing concerns over its potential costs.
IMPORTANT: Building greater support among members of the House of Representatives for H.R. 5746 is crucial. Please contact your House Member to support for the bill. CLICK HERE to easily send a message to your House lawmaker to request their cosponsorship.
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Bruce Moyer
NAPS Legislative Counsel
From Bruce Moyer July 17, 2010
What H.R. 5746 Does
The legislation carries through on recent findings by the Postal Regulatory Commission and the Postal Service Inspector General that show the Postal Service since 1971 has overpaid as much as $55 billion into the federal civil service pension fund for the retirement benefits of employees who worked for both the Post Office Department prior to 1971 and the Postal Service after that time. These overpayments came about through faulty calculation methods used by the Office of Personnel Management.
The legislation directs the Office of Personnel Management to recalculate how much the Postal Service should have paid, using fairer and more actuarially sound formulas, and then transfer that surplus into the Postal Retiree Health Benefit Fund, the account into which the Postal Service already has made $35 billion in payments since 2006. In essence, H.R. 5746 moves money from one government trust fund (the civil service pension fund) into another government trust fund (the postal retiree health benefits fund) and hopefully should not generate budget scoring issues.
That move, which NAPS has urged Congress to take since February, will provide significant financial relief to the Postal Service, removing the burden imposed by the 2006 postal reform law that has required the Postal Service to put money aside for its future retiree health benefits, to the tune of $5.5 billion a year. The Postal Service would have remained in the black in 2 of the last 3 years but for these retiree health prefunding payments, costing $5.5 billion per year. The Postal Service once again faces a $7 billion shortfall for the current fiscal year ending September 30, due largely to its retiree health prefunding payments.
The dual reform of the Postal Service’s pension and retiree health benefit liabilities will provide immense relief to Postal Service and assure the continuation of high-quality mail service
Sen. Carper Welcomes News of PRC Discovering $50 Billion USPS Overpayment
The office of Sen. Thomas Carper, D-Del., issued the following news release:
WASHINGTON,DC- Sen. Tom Carper (D-Del.), chairman of the Senate’s Federal Financial Management Subcommittee with jurisdiction over the U.S. Postal Service, issued the following statement reacting to a report submitted to Congress by the Postal Regulatory Commission earlier today:
“Every once and a while in life we find money in places that we aren’t expecting, sort of like when you find a ten dollar bill you forgot in the pocket of your jeans that you haven’t worn in a while. This is a very good day indeed because rarely in life do you discover an extra $50 billion lying around. This discovery couldn’t have come at a better time, as the Postal Service is facing a serious financial crisis. In fact, the overpayment the Postal Regulatory Commission has identified represents less than 25 percent of the Postal Service’s projected long-term budget deficit. That said, this certainly is a helpful development that will give Congress some assistance as we work to provide the Postal Service with much-needed relief from the overly-aggressive retiree health funding schedule that was placed on in 2006. It is my hope that it can also provide some momentum to efforts to remove the roadblocks that often prevent the Postal Service from streamlining its operations. Both of these things – financial relief and more aggressive cost cutting – must take place in the very near future if we want a Postal Service capable of continuing to deliver the goods and services millions of Americans depend on.”
Earlier today, the Postal Regulatory Commission submitted to Congress, the Office of Personnel Management (OPM) and the United States Postal Service, an independent actuarial report on the allocation of the Civil Service Retirement System (CSRS) benefits paid to former Post Office Department employees. The Commission report found that an adjustment of $50-$55 billion in favor of the Postal Service would be equitable.
By law, OPM, which is responsible for calculating the Postal Service’s CSRS pension liability, must now reconsider its calculation of the Postal Service’s pension assets in light of this report, and submit the results of its reconsideration to the Commission, the Postal Service, and Congress.
The Commission report suggests that Congress may wish to alter the schedule established in the Postal Accountability and Enhancement Act (PAEA) for potential transfers from the Postal Service Retirement Fund to its Retiree Health Benefit Fund. Currently, such transfers may not take place before September 30, 2015.
The full report, Civil Service Retirement System Cost and Benefit Allocation Principles, is available on the Commission website, www.prc.gov.
Burrus: A Pig with Lipstick… Is Still a Pig
Burrus Update
The supporters of the PAEA are directly responsible for the precarious financial status of the Postal Service, not reduced mail volume caused by the slumping economy, not the migration of hard-copy mail to computer-driven messages, not the escalation of energy costs.
As president of the largest union of postal employees, my mission is to maximize the rights and benefits of APWU-represented employees. This responsibility creates a natural conflict with those whose mission is to bend postal policy to advance their institutional and corporate goals. Therefore, it is not surprising that postal unions, management, and large mailers often find ourselves on opposite sides of postal issues.
Through the years, my criticism of the USPS has been consistent: Top-level managers have converted the Postal Service — a public service — into an arm of commercial mailers. As a result, the natural tension between the union and the employer has been influenced by management’s bias towards its biggest and most powerful customers.
The cause of the Postal Service’s dire financial condition is the PAEA. Those responsible for its passage must accept responsibility for the current state of affairs.
It is not surprising that on many issues, postal management, large mailers, and postal unions espouse different positions on the state of the Postal Service and its prospects for the future. This is expected and welcome; after heated debate, consensus should settle somewhere between our competing positions.
But on occasion, one of the parties strays beyond the boundaries of civil debate. I was guilty of crossing the line shortly into my service as president of the union, when I compared large mailers to “vermin” for seeking to deny postal workers’ rights in their insatiable appetite for reduced rates. Since then, I have consciously toned down such rhetorical excesses, recognizing that they do a disservice to the debate. (I note that similar excesses have been directed in reverse — I have been accused of behavior like that of the Third Reich!)
This history of rhetorical excesses in the postal debate came into focus recently, when I read an article [PDF] by a leading spokesman for the mailing industry that bitterly protested USPS plans to seek a rate increase next year and defended the Postal Accountability and Enhancement Act of 2006 (PAEA). I read with amazement as facts were distorted and criticisms of postal management were presented as though the Postal Service is free to write its own ticket — as though Congress has no say over the Postal Service’s use of the mailbox monopoly, and as though the Postal Service’s competitors would stand idly by while the USPS launches new services and products.
The mailing industry spokesman apparently believes the imposition of a $65 billion obligation to pre-fund future retiree healthcare liabilities is a trivial matter that could have been overcome through better management. He implies that postage rates have always been limited to the rate of inflation — suggesting that the Postal Service’s intent to use the “exigency” exception in the PAEA to increase rates above the inflation rate would be historic. This is the stuff of fairy tales.
To accept this logic one must have an extremely short memory: As recently as 2005, postage rates were based on the Postal Service’s need for revenue. Prior to enactment of the PAEA, the USPS was required to “break even over time.” I guess the mailing industry spokesman believes he is entitled not only to his own opinion, but to his own facts.
All this obfuscation was in defense of legislation (the PAEA) that by any measure has been a colossal failure. No amount of posturing can change the reality that putting lipstick on a pig doesn’t fundamentally change the pig. Such was the PAEA, a pig with make-up, but still a pig.
The mailing industry spokesman chides the Postal Service for opposing the law, but, in fact, USPS opposition to the PAEA did not surface until very late in the legislative process. Throughout the debate leading up to enactment of the bill, postal management drank the postal “reform” Kool-Aid and encouraged Congress to embrace the legislative proposals that became the PAEA.
Only at the 11th hour did the USPS seem to realize that the pre-funding requirement and the restriction on rate increases outweighed any minimal improvements the bill offered. The elimination of the lengthy adversarial rate-making process and the provision that requires injured employees to use leave when on-the-job injuries force them to miss work paled in comparison to these onerous financial mandates.
The supporters of the PAEA are directly responsible for the precarious financial status of the Postal Service, not reduced mail volume caused by the slumping economy, not the migration of hard-copy mail to computer-driven messages, not the escalation of energy costs. The cause of the Postal Service’s dire financial condition is the PAEA. Those responsible for its passage must accept responsibility for the current state of affairs.
Yes, postal management could have taken many steps in response to the crippling new obligations of the PAEA, each of which would have been vigorously contested. The proponents of the misguided legislation also could have expended their energies in positive endeavors and spared the Postal Service the agony of being pushed to insolvency.
I repeat: A pig with lipstick is still a pig. The Postal Accountability and Enhancement Act is a pig.
William Burrus
President
OIG Report: Postal Execs Pay In Compliance With Postal Reform Act
This report presents the results of our audit of compensation paid or deferred to officers1 based on the limits established in the Postal Accountability and Enhancement
Act of 2006 (Postal Act of 2006) and U.S. Postal Service policies and guidelines (Project Number 10BM001FT001). Initially we performed this work in fiscal year (FY)
2008, in response to an inquiry from the Board of Governors (Board) regarding the audit coverage we provide for officer compensation. We will continue to provide a report annually as part of our ongoing financial statement audit work. See Appendix A for additional information about this portion of the audit
Background
The passage of the Postal Act of 2006 amended Title 39, imposing guidelines on total compensation2 for the Postal Service. Under this provision, the total compensation
payable to any employee is established at three levels:
- Level I of the Executive Schedule or $196,700 for calendar year 2009.
- With the approval of the Board, total annual compensation not to exceed the total annual compensation payable to the vice president of the United States, or
$227,300 for calendar year 2009. - For up to 12 officers or critical employees, compensation up to 120 percent of the total annual compensation payable to the vice president of the United States, or
$272,760 for calendar year 2009.
Further, Postal Service officers receive additional benefits and other perquisites not subject to the compensation cap.
Conclusion
The Postal Service complied with the compensation limits stated in the Postal Act of 2006. Further, while we reviewed deferred compensation as a part of the overall scope, it does not apply to compensation caps. We noted that six of 44 officers were allocated a total of $502,395 in deferred compensation3 during calendar year 2009. Officers may be granted deferred compensation that is distributed after employment ends, or in a year when the payment of previously deferred compensation does not exceed the cap. Title 39 does not limit the Postal Service from devising and implementing deferred compensation provided it does not conflict with either the Federal Employees’ Retirement System or Civil Service Retirement System.
BACKGROUND
The passage of the Postal Act of 2006 amended Title 39, imposing guidelines on total compensation4 for the Postal Service. Under this provision, the total compensation
payable to any employee is established at three levels.
- The first limit provides that no officer or employee may be paid compensation at a rate in excess of the rate for level I of the Executive Schedule. This
compensation limit was set at $196,700 for calendar year 2009. - With the approval of the Board, however, the Postal Service may develop a program to award a bonus or other reward in excess of the above compensation
limit, as long as this does not cause the total annual compensation paid to the officer to exceed the total annual compensation payable to the vice president of
the United States as of the end of the calendar year in which the bonus or award is paid. In approving any such program, the Board must determine that the bonus
or award is based on a performance appraisal system that makes meaningful distinctions based on relative performance. This total compensation limit was
$227,300 for calendar year 2009. - In addition, the Board may allow up to 12 officers or employees of the Postal Service in critical senior executive or equivalent positions to be paid total annual
compensation up to 120 percent of the total annual compensation payable to the vice president of the United States as of the end of the calendar year in which
such payment is received. This compensation limit was $272,760 for calendar year 2009.
Postal Service officers receive additional benefits and other perquisites not subject to the compensation cap, including increased annual leave exchange hours, free financial counseling, parking, life insurance, and health benefits.5 In certain limited cases, officers have contractual benefits in the form of deferred compensation. These items are not generally subject to the compensation guidelines defined in the Postal Act of 2006.
Author of Postal Reform Bill Attempts to Refute That Law Created USPS Financial Plight
Bill’s Author Can’t Change the Facts: Postal ‘Reform’ Created the USPS’ Financial Plight
In a continuing effort to rewrite history, the author of the Postal Accountability and Enhancement Act (PAEA) has attempted to refute the Postal Service’s contention that the 2006 law is responsible for the Postal Service’s current financial difficulties. The law requires the USPS to place in escrow more than $5 billion per year for 10 years to pre-fund future retiree healthcare benefits.
The attempt to dismiss this burden as the cause of the USPS’ misfortune would be laughable, except that the words are those of a United States senator. Because of the power she wields, her assertions must be addressed:
The 2006 law that the senator defends has forced the Postal Service virtually into insolvency. It imposed on the Postal Service a $75 billion liability that is not borne by any other federal agency. This single requirement has created a USPS deficit of alarming size.
I am disappointed that postal management has failed to release financial records showing USPS liabilities minus this obligation. Such documents would clearly demonstrate the disastrous effect the legislation has had. Absent this obligation, the Postal Service would have experienced a cumulative surplus of $3.7 billion over the last three fiscal years, despite declining mail volume, an economy in chaos, and electronic diversion.
Furthermore, I am compelled to ask: If funding future healthcare liabilities meets sound accounting standards, why isn’t this requirement applied to all federal and private enterprises? Why doesn’t every branch of government, including Congress, pre-fund future healthcare liabilities? What is unique about the Postal Service that it should be singled out?
The PAEA was a mistake, a gross miscalculation, which provided no new revenue stream for the Postal Service, while imposing massive, artificial new costs.
It is easy to suggest that the Postal Service should offer new services in order to remain financially sound, while ignoring free-market obstacles. I challenge the law’s defenders to name one new service or product the USPS could offer that would be accepted without challenge by private-sector competitors and that would result in short-term profit for the Postal Service.
And how can the USPS be expected to fund new enterprises that would require significant start-up costs while it is saddled with a $75 billion debt? The reality is that requiring the payment of $5.6 billion annually for 10 years would bankrupt any American corporation.
It is apparent that ostriches are not alone in their ability to bury their heads in the sand.
William Burrus
President
The Postal Accountability and Enhancement Act: Overview and Issues for Congress
Congressional Research Service Report
Summary
President George W. Bush signed the Postal Accountability and Enhancement Act (PAEA; P.L.109-435; 120 Stat. 3198) on December 20, 2006. The PAEA was the first broad revision of the 1970 statute that replaced the U.S. Post Office with the U.S. Postal Service (USPS), a selfsupporting,independent agency of the executive branch.
This report describes Congress’s pursuit of postal reform, and summarizes the major provisions of the new postal reform law. The report also suggests PAEA-related oversight issues for Congress.
Legislatively, the pursuit of reform of the U.S. Postal Service (USPS) began during the 104th Congress, in 1996. A number of factors encouraged the movement for postal reform. Perhaps foremost were the financial challenges of the USPS.
A decade later, Congress enacted the PAEA, which made over 150 changes to postal law. Some of the more significant alterations are defining the term “postal service”; restricting the USPS’s authority to provide nonpostal services; altering the USPS’s budget submission process; requiring the USPS to prefund its future retiree health benefits by establishing the Postal Service Retiree Health Benefits Fund; and replacing the USPS’s regulator, the Postal Rate Commission, with the more powerful Postal Regulatory Commission.
The inherent complexity of lawmaking and the execution thereof invites disagreement and confusion over what a law means and how it should be implemented. In the three years since the enactment of the PAEA, some issues and questions concerning the law’s provisions have arisen. These include, but are not limited to, possible executive branch concerns about the PAEA and the separation of powers; the cost of prefunding USPS future retiree health benefits; the role of the public in the closure of nonretail postal facilities; the USPS’s authority to provide nonpostal products and services, and the viability of the USPS’s business model.
This report will be updated should events warrant.
Mailers Council Calls for Legislative Reform to Avoid Postal Service Insolvency
Filed under: mailers, postal, postal reform, press releases, usps
The Mailers Council, the nation’s largest coalition of mailers and mailing associations, has published a new white paper that warns of United States Postal Service insolvency without significant new legislative reform. The paper suggests other non-legislative steps to avoid collapse of the nation’s postal system.
The white paper is available on the Mailers Council’s website.
According to Mailers Council Board of Directors President James R. O’Brien, “The mailing industry, and the nearly nine million jobs it represents, and every American who depends on a reliable, affordable postal system, need Congress’ help now. Our research shows that recent legislation offers only temporary relief of the agency’s financial problems. Without more significant measures, such as those outlined in our white paper, the Postal Service will soon be unable to meet its financial obligations.”
The Postal Service was recently put back on the General Accountability Office’s High-Risk List, a reflection that the agency’s future is in jeopardy. It ended FY 2009 with a net loss of $3 billion and is expected to report a nearly $7 billion deficit for FY 2010. Mail volume declined by approximately 26 billion pieces in one year. Next year, the Postal Service will be close to its statutory borrowing limit of $15 billion, with no sign of being able to repay these funds anytime soon.
Legislation approved on September 30 gave the Postal Service a one-year reprieve from the large annual payments required to prefund its retiree obligations. However, because of staggering declines in mail volume, changing communication patterns and the ongoing recession, the USPS may be unable to pay its bills or its employees by the end of FY 2010.
The Mailers Council’s white paper offers these recommendations for addressing the Postal Service’s problems:
- The Postal Service needs to be allowed to reduce its head count.
- It must be allowed to close unneeded facilities and consolidate its retail network.
- The Postal Service needs greater control over compensation.
- It should be allowed to adjust its pre-funding schedule for retiree health benefits when economic conditions dictate.
- An arbitrator should consider the financial health of the Postal Service when making a decision in the collective bargaining process.
- The Postal Service should complete its study of five-day-a-week delivery and fully present its findings for further discussion.
The Mailers Council is a coalition of corporations, nonprofit organizations, and major mailing associations. Collectively, the Council accounts for 70% of the nation’s mail volume. The Mailers Council believes that the USPS can be operated more efficiently, supports efforts aimed at lowering postal costs, and has the ultimate objective of containing postal rates without compromising service
Mailing Industry Executives Tell Postal Workers to Sacrifice
Burrus Says Postal Reform Act (PAEA) was clearly a colossal blunder
Burrus Update
Are Their Profits Sacred?
Postal unions realize that Congress’ vote last month to give the USPS just a one-year reprieve from a crushing financial obligation means additional legislative action will be needed to help the Postal Service remain viable. So it was no surprise to hear that representatives of trade groups for major mailers say the legislature may be compelled to address postal reform again.
It was shocking, however, to read that the president of the Association for Postal Commerce suggests that “the time has come for postal employees to start sharing some of the sacrifices.”
As APWU members know, postal employees have made tremendous sacrifices as the USPS confronts financial difficulties. More than 40,000 jobs have been wiped out in the last year; thousands of employees have been reassigned to work sites hundreds of miles from their homes; and part-time employees have had their hours slashed.
But the real irony is this: The Postal Service’s financial debacle is the result of the Postal Accountability and Enhancement Act (PAEA), which the Association for Postal Commerce strenuously advocated. The 2006 law requires the agency to pre-fund retiree healthcare benefits at a cost of more than $5 billion a year for 10 years – an obligation no other federal agency or private company bears. This requirement is the reason the Postal Service has been teetering on the edge of insolvency.
The PAEA was clearly a colossal blunder, yet those who fought for it now suggest that postal workers should pay for their mistake. To make matters worse, the Association for Postal Commerce vociferously defends excessive workshare discounts that allow major mailers to reap handsome profits.
I have issued a challenge to the Postmaster General:
Discontinue the exorbitant postage discounts that are offered to large mailers — which are currently as high as 10.5 cents per letter — and allow members of the APWU to perform all mail-processing functions at the rate of 10.4 cents for every letter and flat.