Affordable Mail Alliance Argues PRC Ruling Allows USPS To Exploit The Unused Rate Authority
Filed under: postage rates, postal, postal news, rate increase, usps
Affordable Mail Alliance Comments on informal ruling issued by a Postal Regulatory Commission lawyer Oct 12, 2010 regarding USPS possibly raising postage rates.
THE OCTOBER 12 LETTER-RULING OF THE OFFICE OF GENERAL COUNSEL IS EITHER UNLAWFUL OR INEFFECTIVE.
The OGC letter, if treated as a binding substantive ruling, violates the due process rights of AMA and its members. AMA’s members have a substantial economic interest in the CPI price cap formula. The methodology adopted in the OGC letter for computing the Postal Service’s unused rate authority under the CPI cap could subject users of market-dominant products to approximately $360 million per year in extra postage and fees compared with the computation of the price cap formula that AMA and the Postal Service believed was in effect until recently.2 As interested parties, AMA’s
The price cap provisions of Section 3622(d) are designed to protect mailers and the public by limiting price increases to changes in the rate of inflation over time. Order No. 547 at 10-14.
Maintaining the integrity of this structure requires that the price cap reflect periods of deflation as well as inflation. Recognizing increases in the CPI, while disregarding the “additional unused rate authority” accrued under Rule 3010.26(c)(2) whenever its value is negative, would allow the Postal Service to ratchet up its prices over time faster than inflation by refraining from rate adjustments following intervals of deflation.
The resulting distortion in price levels would be large. The difference between unused rate authority of 1.447 percent and unused authority of 0.873 percent, or 0.604 percent, is approximately $360 million per year. Moreover, postal price levels inflated by the use of an excessive rate adjustment factor would become the base rates for future price cap adjustments; hence, the original overcharge would recur in perpetuity (and would be inflated to reflect future changes in the CPI).
Moreover, the divergence between postal rates and the CPI would tend to widen over time. Recurring periods of deflation are not unlikely in the current economies of the United States and the world.5 If the economy alternates between periods of inflation and deflation that leave the CPI roughly flat, selective timing of CPI-based price adjustments could result in postal price increases substantially outpacing inflation over time.
Allowing the Postal Service to exploit the “unused rate authority for the 12 months represented by the annual limitation” (Rule 3010.26(c)(1)), while ignoring the negative “additional unused rate authority” accrued during earlier periods (i.e., the “additional unused rate authority” established under Rule 3010.26(c)(2)), would also violate 39 U.S.C. § 3622(d)(2)(C)(iii)(III), a provision of the PAEA included by Congress to prevent the Postal Service from gaming the price cap through selective application of unused rate authority from prior periods. The provision establishes a first-in-first-out rule: the Postal Service must “use the unused rate adjustment authority from the earliest year such authority first occurred and then each following year.” Id., (emphasis added). The approach embraced in the October 12 letter-ruling of the OGC turns this rule of priority on its head—allowing the Postal Service to exploit its unused rate adjustment authority from the most recent 12-month period first, while leaving implementation of negative unused rate adjustment authority from earlier periods for last—or, more likely, never.
No reviewing court is likely to find this nonsensical outcome consistent with the plain language of 39 U.S.C. § 3622(d)(2)(C)(iii)(III) or the policies of Section 3622(d). Having negative “unused rate adjustment authority” amounts to maintaining rates in excess of the CPI cap. The OGC’s interpretation of the rules would allow the Postal Service to maintain—and increase further—rates in excess of the CPI cap indefinitely.C.
Conclusion
The method of calculating the price cap limitation for the next notice of market-dominant rate adjustment that comports best with the language and structure of the Commission’s rules, and the policies underlying 39 U.S.C. § 3622(d) and the PAEA generally, is to add the interim unused rate authority to the annual price cap limitation, following the calculation method prescribed in 39 C.F.R. § 3010.26. Accordingly, the Commission should clarify that the Postal Service should use the method of calculating the price cap described in these comments—the same method that the Postal Service used in its July 6, 2010 Request in this docket.
Dead Tree Edition: Mailers Alliance Fights ‘Nonsensical’ Price-Cap Ruling
Affordable Mail Alliance Commends PRC On Rejection Of Postal Rate Hikes
Filed under: postal, postal news, press releases, rate increase, usps
Washington, DC – The Affordable Mail Alliance – an unprecedented coalition of more than 1,200 non-profits, Fortune 500 companies, small businesses, major trade associations, consumer groups, and citizens representing the vast majority of the mail sent in the United States – said today that the decision of the Postal Regulatory Commission (PRC) to reject the rate hikes proposed by the Postal Service is good for businesses, and will actually benefit the USPS in the long run.
The proposed rate hikes, which were to have taken effect next January, would have added $3 billion annually to the nation’s postal bill even though the rate of inflation is close to zero. The PRC decision reaffirms that the Postal Service must limit rate increases to the rate of inflation, as the law requires.
“The PRC today has helped countless businesses stay competitive and saved tens of thousands of jobs,” said Tony Conway, Affordable Mail Alliance spokesperson and Executive Director of the Alliance of Nonprofit Mailers. “The Commissioners recognized that imposing an additional tax on Postal Service customers is not the way to address its financial troubles. Our members look forward to working with the Postal Service on the long-term restructuring needed to restore the Postal Service to competitiveness.”
While today’s decision will help the Postal Service retain volume and revenue, there is still more work to do. Blue ribbon commissions and government auditors have reported for decades that the Postal Service needs to streamline its inefficiently large network of undersized and obsolete mail processing plants. And although contracts with several major employee groups are up for renegotiation, the unions have signaled that they will strongly resist any major concessions. Additionally, Congress should also take a hard look at the Postal Service’s current obligations for prefunding its retiree health benefits program, a major cost burden. This prepayment schedule is another major contributor to the Postal Service’s financial problems.
“The Affordable Mail Alliance is truly an unprecedented effort with members across the country all of whom deserve thanks for uniting to address this important issue,” Conway said. “We are also grateful for our support from Congress and particularly for the leadership of Sen. Susan Collins, the key author of the 2006 Postal legislation at issue here and a tireless advocate for the future of the Postal Service. We stand ready to move forward in addressing the other issues that are so important to the future of the Postal Service.”
More on the Affordable Mail Alliance
The Affordable Mail Alliance is an unprecedented coalition of postal customers. The coalition includes charities, consumer groups, small business, national retailers, utilities, banks, insurance companies, Fortune 500 companies, and the customers who use the Post Office every day. The members represent many of the Postal Service’s biggest customers-and many of its smallest-and use every major class of mail. For further information, please visit www.affordablemailalliance.org or contact Jessica McCreight at jmccreight@skdknick.com or (202) 464-6900.
Hey, Postal Service: “What’s the Big Deal?”
Filed under: APWU, postage rates, postal, postal news, press releases, usps
Press Release From Affordable Mail Alliance
Union Challenges Existence of Postal Service Financial Crisis
Washington, DC – Underscoring the recklessness of the massive rate increase proposed by the United States Postal Service on July 6, American Postal Workers Union President William Burrus made clear on Friday that his Union does not believe the Service is currently in an unprecedented financial position. He made it clear that the Union will not back away from its contract demands during the current round of negotiations with the Postal Service, despite its supposed financial crisis. This furthers the case against the Postal Service request for a rate hike 10 times the rate of inflation.
“Mail volume is depressed and revenue is down, but we have faced similar circumstances before,” President Burrus said. “The history of the Postal Service is replete with forecasts of doom and gloom.” Click here to read or view President Burrus’ full statement.
A law passed in 2006 limits postal rate increases to the rate of inflation except when “extraordinary or exceptional” circumstances make a larger increase necessary for the Postal Service to continue operating “despite best practices of honest, efficient and economical management.” The Consumer Price Index has gone up less than 1 percent in the past year, the USPS is proposing rate increases of 10 times that rate. The Postal Service claims that its losses result from the “exigent circumstances” of the long-forecast recession and the long-term loss of mail volume to the Internet.
Also opposing the rate increase proposal is the Affordable Mail Alliance, an unprecedented coalition of more than 1,000 postal customers and trade associations representing the majority of the mail sent in the United States, who have joined together to strike down the rate hike. The Postal Service’s projected shortfalls are not the sole result of the recession or the increased use of the Internet, but the Service’s long-standing failure to control its costs. These chronic problems do not qualify as “exigent” circumstances under the law. Until the Postal Service deals with these long-term problems, any demands for above-inflation rate increases – in effect, a new tax on customers – is unwarranted and unproductive, and will likely drive away customers while exacerbating the Postal Service’s problems.
That is the central case put forward in multiple filings by the Affordable Mail Alliance with the Postal Regulatory Commission, the independent body that will decide early next month whether to allow the proposed rate hikes to take effect.
“President Burrus’ statements confirm that the Postal Service’s current condition is not the product of a sudden crisis,” said Jerry Cerasale, Affordable Mail Alliance spokesperson and Senior Vice President, Government Affairs of the Direct Marketing Association. “This is yet more evidence that a rate hike 10 times the rate of inflation is unnecessary and unproductive – for postal customers and the Postal Service itself. Such a rate increase would delay the cost controls and other reforms that are long overdue.”
He added that the Postal Service needs to do what most American businesses have been forced to do in the past few years: to make better and tougher decisions, offer services customers need, address workforce problems, and cut back on needlessly high spending.
More on the Affordable Mail Alliance
The Affordable Mail Alliance is an unprecedented coalition of postal customers who have come together to say “enough is enough” – no more postal rate hikes. The coalition includes charities, consumer groups, small business, national retailers, utilities, banks, insurance companies, Fortune 500 companies, and the customers who use the Post Office every day. The members represent many of the Postal Service’s biggest customers—and many of its smallest—and use every major class of mail. It is this cross-section of America that will suffer if USPS raises rates. For further information, please visit www.affordablemailalliance.org or contact Jessica McCreight at jmccreight@SKDKnick.com or 202 464 6900.
Affordable Mail Alliance: Don’t Allow the USPS to Continue Costly Business Practices
Filed under: postal, postal news, PRC, press releases, rate increase, usps
Businesses and Non-profits cannot afford to Pay for the Postal Service’s Excessive Costs
Washington, DC – The Affordable Mail Alliance – a growing coalition of non-profits, Fortune 500 companies, small businesses, major trade associations, consumer groups, and citizens representing the vast majority of the mail sent in the United States – filed comments urging the Postal Regulatory Commission to help rein in the USPS’s excessive costs by denying the proposed rate hike.
“The Post Office needs to reevaluate their approach,” said Jerry Cerasale, Affordable Mail Alliance Spokesperson and Senior Vice President of the Direct Marketing Association. “Instead of trying to keep things afloat with a giant tax on consumers, the USPS should focus on improving management and controlling costs to get out of this mess. To do otherwise is just bad business.”
This is the Alliance’s final legal step before the PRC announces their decision on October 4.
The comments also highlight the Postal Service’s flip-flop on the cause for their request. The USPS previously claimed that such a severe rate increase was needed to alleviate an immediate and unforeseen cash crisis. But at the public hearing held on August 10, a top official admitted that the “crisis” would not prevent them from operating in their current fashion for at least the next year. The Postal Service now claims that the rate increase is needed to prevent a longer-term profit slowdown over the next decade.
“Our comments make the same case that businesses and working families are making all over the country,” said Cerasale. “The Postal Service’s proposed rate hike is unreasonable, unhelpful, and unlawful, and the more than one thousand members of the Alliance are not going to let the Postal Service take advantage of its customers.”
The comments reiterate what the Alliance has argued all along – that the Postal Service has failed to show that it would suffer from its projected losses if it followed “best practices of honest, efficient and economical management,” and has failed to meet the “extraordinary or exceptional” circumstance test of the 2006 Postal Accountability and Enhancement Act. The increase thus should be rejected, especially at this time of economic uncertainty for America.
Senator Susan Collins (R-ME), a key author of the 2006 law, has supported the Alliance’s position. In her statement following the Postal Regulatory Commission hearings, Senator Collins said that the law being cited by the Post Office was intended for use in circumstances such as natural disasters and terrorist attacks. The Post Office’s “failure to sufficiently update its business model,” she said, was not sufficient for special consideration.
Formed in response to the US Postal Service’s July 6th announcement that it would seek to raise rates far beyond those currently allowed by law, the Affordable Mail Alliance grew from a small group of concerned USPS customers to a membership of over a thousand in less than two months. The Alliance has been gaining momentum in the wake of recent Postal Regulatory Commission Hearings, and this most recent action provides a strong argument to the PRC in advance of its coming decision on the issue.
Related link: Affordable Mail Alliance Document Submitted to PRC
NALC: Mailers And Senator Collins Misreading Congress’ Intent Of USPS Seeking Rate Increases
Filed under: NALC, postal, postal news, postal reform, PRC, rate increase, usps
REPLY OF INTERVENOR NATIONAL ASSOCIATION OF LETTER CARRIERS, AFL-CIO
TO COMMENTS OF AFFORDABLE MAIL ALLIANCE AND SENATOR COLLINS
The AMA argues that the price-cap regulatory system established by the Postal
Accountability and Enhancement Act (“PAEA”) will be “dead” if the Commission interprets the
exigency clause in 39 U.S.C. §3622(d)(1)(E) to apply to the circumstances currently facing the
United States Postal Service (“USPS”). See AMA Comment at 5. Senator Collins echoes that
position, asserting “unequivocally” that the PAEA “does not provide for an exigent rate case”
under the circumstances set forth in USPS’s request.
These comments misconstrue Congress’ intent when it allowed USPS to seek an
exigent rate increase under “extraordinary or exceptional circumstances.” 39 U.S.C.
§3622(d)(1)(E).
Although she now opposes USPS’s exigent rate request, Senator Collins, in an April 6, 2007 letter to the Commission that she co-authored with Senator Carper (see Collins Comment, at Attachment 1), explained that Congress meant the PAEA’s exigency exception to apply to “significant and substantial” declines in mail volume caused by events beyond USPS’s control:
the “extraordinary and exceptional circumstances” referenced in
the language may include terrorist attacks, natural disasters, and
other events that may cause significant and substantial declines in
mail volume or increases in operating costs that the Postal Service
cannot reasonably be expected to adjust to in the normal course of
business.
The letter cited “terrorist attacks” as an example of an event whose impact on
mail volume could qualify under the statute as an exigent circumstance. See id. In her comment,
Senator Collins now explicitly embraces the idea that “the terrorist attacks of September 11,
2001, or the anthrax attacks later that year could serve as the basis for an exigent rate case.”
Collins Comment at 3; see also id. at Attachment 4, at 11 (S. Rep. 108-318 (2004)) (citing
September 11, 2001 and anthrax attacks as examples of exigencies).
The AMA and Senator Collins argue that the PAEA’s exigency clause must be
read narrowly and only to apply to unforeseen events. See AMA Comment at 12-16; Collins
Comment at 3. Even if that were correct, the current circumstances would still apply. That the
business cycle will ordinarily produce crests and troughs may be foreseeable, but no one could
have foreseen the economic tsunami now known as the “Great Recession” and the carnage it
would leave in its wake: a contraction of the GDP in 2008-2009 of nearly 4%, a drop in private
employment of 7.3%, and a fall in real investment spending of 35.7%; the closure of 228 banks
since January 2008; and the majority of the American workforce in the 30 months preceding July
2010 having faced unemployment, experienced a cut in pay or a reduction in hours, or been
forced into part-time status. See July 6, 2010 Statement of Joseph Corbett in Docket No. R2010-
4, at 14.3 That this was no ordinary recession is evidence by Congress having appointed a
special commission to investigate its causes. And while some argue that the mail-volume loss
was aggravated by a long-term migration of communications to the internet, there is no dispute
that the bulk of the loss was due to the macroeconomic nightmare.
In any event, the claim that the PAEA’s exigency clause only applies in the
narrowest of circumstances and only to unexpected events is wrong, and based on a misreading
of the statute’s text and legislative history. In the original Senate bill, introduced in March 2005,
the exigency exception would only have applied to “unexpected and extraordinary
circumstances.” S. 662, 109th Cong. §3622(d)(1)(D) (2005) (emphasis added). But the statute as
enacted in December 2006 lacks the requirement that the exigent circumstances be
“unexpected.” See 39 U.S.C. §3622(d)(1)(E). Congress not only dropped the unforeseeability
requirement, but also broadened the exigency clause by replacing the restrictive conjunctive
language, marked by the word “and,” with the disjunctive phrase “either … or.” Id. (PAEA
referring to “either extraordinary or exceptional circumstances”) (emphasis added).
3 In fact, recent revisions to Commerce Department data show that the recession, with a 4.1%
drop in GDP, was worse than originally thought. See “A Deeper Hole,” The Economist (Aug. 7,
2010), at 28 (confirming that recession was “the worst of the post-war years”).
The April 2005 congressional testimony quoted by Senator Collins that the
exigency clause establishes a “‘very high bar,’” Collins Comment at 2-3 (quoting testimony in
Attachment 5, at 2) is thus inapt, as it expressly refers to the Senate bill that never became law.
See Collins Comment, Attachment 5, at 2. The April 2004 testimony she quotes that exigent
circumstances must be “‘unexpected’” came even earlier in the legislative process and was thus
even further removed from the actual statutory language. See id. at 3 (quoting testimony in
Attachment 6, at 20).
The Commission itself has made clear that exigencies under the PAEA can be
either foreseen or unforeseen. In its original proposed rules on exigent rate cases, the
Commission would have required USPS, when filing for an exigent rate increase, to justify why
“the circumstance giving rise to the request was neither foreseeable nor avoidable by reasonable
prior action.” Order Proposing Regulations to Establish a System of Ratemaking, Docket No.
RM2007-1 (Aug. 15, 2007), at Proposed Rule 3100.61(a)(7) (emphasis added). But the
Commission changed this language after receiving comments that the assumption behind the
proposed rule — that exigent circumstances must be unforeseen — was inconsistent with the
statutory language. The rule as promulgated by the Commission now only requires USPS to
provide an “analysis of the circumstances giving rise to the request, which should, if applicable,
include a discussion of whether the circumstances were foreseeable or could have been avoided
by reasonable prior action.” Commission Rule 3010.61(a)(7) (emphasis added).
Finally, the AMA devotes much of its comment to arguing that current
circumstances cannot qualify as an exigency because, it claims, USPS’s private-sector
competitors weathered the economic storm while USPS, burdened by purportedly above-market
labor costs and other inefficiencies, has floundered.
This argument ignores the fact that, unlike USPS, its private-sector competitors have no
universal service obligation nor do they bear the unique burden of having to pre-fund retiree
health benefits.4 Moreover, AMA’s argument is based on highly contested assertions that raise
issues that are beyond the scope of the instant rate proceeding and unsupported by anything in
the evidentiary record in this case. For example, AMA’s assertion that USPS pays wages above
wages paid for comparable work in the private-sector, see AMA Comment at 30-31, raises
complex legal and economic issues regarding the meaning and application of the comparability
standard in the Postal Reorganization Act (“PRA”). See 39 U.S.C. §1003 (a) (providing for
postal compensation and benefits “on a standard of comparability to the compensation and
benefits paid for comparable levels of work in the private sector of the economy”). NALC and
its economic experts have argued elsewhere that proper application of the comparability standard
requires comparing letter carrier pay to the pay of employees in large, comparable firms such as
employees of other parcel delivery enterprises — not, as others have argued, to the pay of all
employees throughout the private-sector. In any event, the legislative history makes clear that
the comparability standard leaves ample room for differences over how it is to be interpreted and
applied and that such differences are to be worked out in collective bargaining between USPS
and the postal unions or, failing that, in interest arbitration.5 That comparability is beyond the
For a discussion regarding the impact on USPS of the obligation to pre-fund retiree health
benefits, see Frank Clemente and Tom Kiley, “Congressional Mandates Account For Most Of
Postal Service’s Recent Losses,” Economic Policy Institute, Briefing Paper #268 (June 2010).
5 See, e.g., Post Office Reorganization: Hearings on Various Proposals to Reform the Postal
Establishment Before the House Comm. On Post Office and Civil Service, 91st Cong., 1st Sess.
221 (Postmaster General testifying that “there is a wide variety of difference as to what
comparability might mean” and “that has to be bargained between the parties”); 39 U.S.C.
§1207(c) (providing for interest arbitration in the event that collective bargaining fails to produce
an agreement). Under the PRA, the compensation of bargaining unit postal employees is to be
determined through collective bargaining between USPS and the postal unions in accordance
with the applicable principles of the National Labor Relations Act.
Affordable Mail Alliance Reaches 1,000 Members
Washington, DC – The Affordable Mail Alliance – a growing coalition of non-profits, Fortune 500 companies, small businesses, major trade associations, consumer groups, and citizens representing the vast majority of the mail sent in the United States – today announced the addition of its one thousandth member group.
Formed in response to the US Postal Service’s July 6th announcement that it would seek to raise rates far beyond those currently allowed by law, the Affordable Mail Alliance has been steadily picking up new members since its inception. Growing from a handful of organizations, these members range from traditional powerhouses like the American Forest and Paper Association to non-profit organizations like the Disabled American Veterans to small local publications like Oklahoma’s Countywide News.
“We are proud of the alliance we have built-over a thousand groups, large and small, from around the country, who have joined together on this issue,”said Tony Conway, Affordable Mail Alliance Spokesperson and Executive Director of the Alliance of Nonprofit Mailers.
The Alliance gained members following recent Postal Regulatory Commission hearings during which the Post Office admitted that it is not facing an immediate cash crisis, as it had previously claimed. The alleged crisis, which the Post Office said would require a severe price increase at ten times the rate currently permissible by law, was contradicted by their own leadership during the hearings. The Post Office now claims that the rate increase is needed to prevent a longer-term profit slowdown over the next decade.
The coalition comprising the Affordable Mail Alliance has argued that emergency provisions included in the postal laws do not apply to the Post Office’s current situation, and that USPS should seek to take more substantial steps within its own organization before raising prices for the millions of consumers the Alliance represents.
Senator Susan Collins (R-ME), a key author of the 2006 Postal Accountability and Enhancement Act, agreed that the proposed increase was unwarranted. In her official comments to the Postal Regulatory Commission, Senator Collins said that the law’s ‘extraordinary or exceptional circumstances’ test has not been met by the USPS, “the provision was not intended to be used under the current circumstances,”but rather in cases such as natural disasters and terrorist attacks. The Post Office’s “failure to sufficiently update its business model,”she said, was not sufficient for special consideration.
The one thousand groups that have now signed on to the Affordable Mail Alliance, based in all regions of the country, provide a picture of broad-based discontent with the Post Office’s proposal.
“There is a reason that a thousand non-profits, local newspapers, successful companies and small businesses from across the country have joined the Affordable Mail Alliance to say enough is enough. We’re tired of being asked to foot the bill for the USPS’s failure to control costs,”said Conway. “The Post Office’s proposed rate hike hurts mail customers and it’s just bad business.”
Mailers Group Says USPS Is Misleading Public on Its Finances
Filed under: mailers, postal, postal news, press releases, usps
Press Release
Affordable Mail Alliance Responds to USPS Earnings Report
Washington, DC – The Affordable Mail Alliance today responded to the United States Postal Services’ earning report. The report contends that the USPS will not have the capital to continue opeartions into FY 2011. This claim is false.
As the Postal Service said just a month ago in its rate filing, even after making this year’s Retiree Health Benefit payment, USPS will end FY 2010 with $1.3 billion cash. Further, on October 1, the first day of FY 2011, the USPS will have access to another $1.8 billion. In addition, a potential shortfall could be eliminated by waiving either the FY 2010 or FY 2011 Retiree Health Benefit payment of $5.5 billion.
“We’re saddened to see these dubious cliams by the Postal Service and would hope for a more constructive dialogue with customers instead of making misleading public statements,” Tony Conway, Affordable Mail Alliance Spokesperson and Executive Director of the Alliance of Nonprofit Mailers.
“Unfortunately, the Postal Service seems to be attempting to justify their proposed rate hikes of ten times the rate of inflation – a move that would drive away more consumers and worsen the financial situation they’re highlighting in this report.”
PRC Is Taking Affordable Mail Alliance’s Request To Dismiss Rate Case Under Advisement
Filed under: mailers, postal, postal news, press releases, rate increase, usps
The Postal Regulatory Commission issued the following :
ORDER TAKING MOTION TO DISMISS UNDER ADVISEMENT
(Issued August 4, 2010)
On July 26, 2010, the Affordable Mail Alliance filed a motion to dismiss the Postal Service’s proposed rate adjustment.1 Answers to the Motion were filed on August 2,2010, by the Postal Service and several other companies and organizations.2 These filings make a number of factual allegations that require further exploration during the upcoming proceedings established by Order No. 485.3 Given the need for further investigation of these factual allegations and the absence of a deadline for action on the Motion, the Commission is taking the Motion under advisement and will rule on the Motion at an appropriate time.4
1 Motion of the Affordable Mail Alliance to Dismiss Request, July 26, 2010 (Motion). The Affordable Mail Alliance describes itself as “a coalition of large and small businesses, nonprofit organizations and associations of mailers that together account for a majority of the mail sent in the
United States.” Id. at 1.
2 Response of the United States Postal Service to Motion of the Affordable Mail Alliance to Dismiss Request (Postal Service Response); Response of the National Rural Letter Carriers’ Association to Affordable Mail Alliance’s Motion to Dismiss; Answer of the Saturation Mailers Coalition, Valassis Direct Mail, Inc., Valpak Direct Marketing Systems, Inc. and Valpak Dealers’ Association to Motion of the Affordable Mail Alliance to Dismiss Request; Public Representative Answer to Motion of the Affordable Mail Alliance to Dismiss Request; Response of Intervenor National Association of Letter Carriers, AFL-CIO to Motion to Dismiss of Affordable Mail Alliance, all filed August 2, 2010 (“Responses”).
It is Ordered:
The Motion of the Affordable Mail Alliance to Dismiss Request and the responses thereto are hereby taken under advisement.
By the Commission.
Ruth Ann Abrams
Acting Secretary
3 Notice and Order Concerning Rate Adjustment for Extraordinary or Exceptional Circumstances,July 8, 2010, at 6.
4 Neither the Postal Accountability and Enhancement Act, Pub..L. No. 109-435 (2006) nor the
Commission’s rules of practice impose a deadline for action on the Motion.Web Leveraged to Provide 24/7 Access and Enhance Training
Burrus: Mailers Want To Cut Postal Employees Wages At Least $18,000 Yearly
Burrus Update #13-2010, July 29, 2010
Competing Interests, Diverging Views
In many Updates and editorials on postal issues, I have criticized the influence of large mailers on the USPS — even while acknowledging that they provide much of the volume that makes it possible for the Postal Service to maintain its national network and provide middle-class employment to more than 600,000 Americans. I have frequently pointed out that the interests of these large mailers generally run counter to those of postal employees.
While some union leaders have joined forces with the mailers to achieve narrow legislative objectives, and others speak in favor of partnerships, I have counseled APWU members that the large mailers and postal workers have competing agendas.
A case in point involves the Postal Service’s recent proposal to raise the price of stamps. An association of large mailers, the Affordable Mail Alliance, vehemently opposes the rate hike and filed a protest with the Postal Regulatory Commission, which must consider the USPS proposal.
The mailers’ motion vividly exposes the lack of respect they have for postal employees and the collective bargaining process. A casual review of the document [PDF - see pages 50-62] reveals their callous desire to punish postal workers for the Postal Service’s financial difficulties — difficulties the mailers inadvertently fostered by promoting the Postal Accountability and Enhancement Act of 2006. The PAEA imposed crippling financial obligations on the USPS — obligations that are responsible for the Postal Service’s current predicament. To compensate for their colossal mistake, the major mailers wish to penalize postal workers.
In lieu of an editorial describing my reaction to this vicious attack, I invite postal employees to read the motion and draw their own conclusions.
Exercising Influence
The Affordable Mail Alliance, along with other organizations representing large mailers, influences postal policy by lobbying and applying significant resources to shape legislation. They hope to set the tone for the USPS-APWU contract negotiations scheduled for later this year.
While the opinions of these mailers are not dispositive, it is important that postal workers and their unions understand the power they have on matters affecting postal employment. The opinions expressed in this filing are a frontal attack aimed at eliminating collective bargaining as the vehicle for establishing the terms of employment in the United States Postal Service.
The major mailers wish to amend the law so that the Postal Service would have the unilateral right to set wages and benefits, leaving employees with only one option: Accept it or quit. This is the model the large mailers use with their employees; as they generated billions of dollars in profits from worksharing alone, their employees had no vehicle to demand an appropriate share. It would be interesting to review the salaries of the executives in the companies that form the Alliance and compare them with the salaries of postal employees.
The Alliance asserts that postal wages, benefits, and conditions of employment constitute a pay “premium” of more than 33.9 percent over other workers. Their “analysis” is based on USPS figures that suggest that total postal “compensation,” which includes both wages and benefits, averages more than $80,000 per year.
To put the mailers’ conclusion in context, they believe the wages of bargaining unit employees should be cut by at least $18,000 per year, with corresponding reductions in healthcare, life insurance, leave, and other benefits! The reduction they suggest would represent a loss of approximately $700 each bi-weekly pay period.
Yet the July 26 edition of Business Mailers Review, a newsletter prepared by a representative of the mailers — the very mailers who take exception to the results of free collective bargaining — reported on a study that showed mailers reaped $10.7 billion in “profits” from workshare discounts in 2008 based upon the postal costs avoided. With tongue in cheek, I ask, if postal wages were reduced arbitrarily, would the mailers suggest that workshare discounts should be reduced to the arbitrarily set “cost-avoidance” rate?
The Sides
For those members and observers who have not identified the sides in this struggle, on one side we have the employees who have organized into groups (unions) that are committed to playing by the rules of democracy, negotiating the terms of employment, and resorting to binding arbitration when voluntary agreement cannot be reached. On the other side are the mailers, whose profits are affected by postal employee wages and benefits. These mailers believe in capitalism and democracy — as long as “democracy” excludes the opportunity for workers to have a meaningful voice in their place of employment. The mailers would prefer to eliminate collective bargaining entirely, but if they are forced to accept the process they favor a law that would guarantee the outcome.
I encourage postal employees to closely examine the Alliance’s document to enhance their understanding of the forces engaged in this struggle. Please note that the Alliance analysis is not craft specific. The mailers’ efforts are not targeted to a specific group of postal employees, such as clerks, letter carriers, mail handlers, etc: Their goal is to quench their insatiable thirst for profits at the expense of all postal employees.
The indecent pay and bonuses many CEOs receive do not seem to bother the Alliance; however, they put each advance by working people under a microscope for after-the-fact comparison.
William Burrus
President
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.”