Senator Collins Urges PRC to Consider Congress Intent In Postal Rate Increase Case
Filed under: politics, postal, postal news, PRC, press releases, rate increase, usps
Press release from Susan Collins, Senate Homeland Security and Governmental Affairs Committee Ranking Member , R-Maine:
WASHINGTON, July 25 —U.S. Senator Susan Collins, Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, today urged the Postal Regulatory Commission (PRC) to consider Congressional intent as it determines how closely proposed rate hikes must be linked to an exigent circumstance to warrant an increase above the rate of inflation.
The 2006 postal reform law, which Senator Collins authored, capped postal rate increases at the rate of inflation, but allowed a narrow exception for extraordinary or exceptional circumstances such as a terrorist attack or catastrophic natural disaster.
Senator Collins’ committee has jurisdiction over the U.S. Postal Service. In January, she filed an amicus brief urging the U.S. Court of Appeals for the District of Columbia Circuit to uphold the PRC’s unanimous decision to reject the Postal Service’s requested rate hikes, which on average, would have increased rates by four to six percent. The Court of Appeals largely agreed with the PRC’s and Senator Collins’ position, but remanded to the PRC the narrow question of how close the causal link must be between a proposed rate increase and the exigent circumstances used by the Postal Service to justify the increase.
“The economy and technology are affecting the Postal Service and, indeed, most businesses. But in writing postal reform legislation in 2006, my intention was not to permit rate increases above the inflation-based cap as relief from chronic, ordinary, or unexceptional circumstances and general Postal Service red ink,” said Senator Collins. “I urge the PRC to require that the nexus between the exigent circumstances and the proposed rate hike be close. This is necessary to preserve the stability and predictability of rates that the 2006 law sought to establish.
“Excessive rate increases coupled with service cutbacks will only drive customers away. The Postal Service needs to redouble its efforts to cut costs, develop new services to increase volume, re-invent its business model, and work with the Administration to remedy an overpayment to the federal retirement fund. I will continue to press the Administration and the Postal Service on these vital reforms.”
PRC Seeks Public Comment on Price Increase Proposed by USPS
Washington, DC – The Postal Regulatory Commission has established Docket R2011-2, to receive comments on postal rate changes for market dominant products filed January 13 by the U.S. Postal Service. The rate changes, which include maintaining the current First-Class, first ounce rate at $.44, are scheduled to take effect on April 17, 2011.
“The Commission will carefully review the Postal Service’s pricing proposals to ensure that the increases comply with the price cap and are consistent with statutory pricing policies,” said Commission Chairman Ruth Y. Goldway. “We encourage the public to participate in the process by sharing with the Commission their views on the requested postage increases.”
Commission rules require that action be taken within 45 days of receipt of the Postal Service’s filing and permit a 20-day public comment period. The comment period allows the public to address the consistency of the new rates with statutory requirements, including a CPI-based price cap.
Comments from interested parties are due by February 2, 2011. Information on the filing of comments and the calculation of the annual CPI price cap – which is 1.741% in this Docket – is available on the Commission’s website, www.prc.gov. Market dominant products include First-Class letters and cards, advertising mail, Periodicals, and single piece parcels.
Within 14 days of the conclusion of the public comment period, the Commission will determine whether the planned rate adjustments are lawful and issue an order announcing its findings. Kenneth E. Richardson, an attorney in the Commission’s Office of General Counsel, will represent the interests of the public in this proceeding.
Printers Head to D.C. to Urge Block of Postal Rate Hikes
Filed under: mailers, postal, postal news, press releases, rate increase, usps
Press Release
Printing Industries of America’s members from across the country are gathering on Capitol Hill next month to oppose an emergency postal rate hike proposal that would dramatically bust caps on postal rate increases imposed by Congress in 2006.
The USPS is petitioning to raise rates higher than allowed by current law, claiming that the recession and continued move from mail to electronic communications mean the agency needs to charge higher rates to stay afloat. Printers are rejecting this proposal and will go directly to Congress to urge decision makers to follow.
The grassroots effort is part of Printing Industries of America’s Print’s Voice 2010 Conference taking place September 14–15 in Washington, DC. This legislative conference, free for members of Printing Industries of America, will focus on the 2010 elections and key legislative issues in the areas of environmental, labor, and tax policy. A special session on postal policy will feature a keynote from USPS executives, lawmakers overseeing postal reform policy in Congress, and a presentation of new industry data related to mailing and postal policy. Conference attendees will then take to Capitol Hill for lobbying visits with their senators and representatives.
“With the decision to raise postal rates looming, it’s more important than ever that printers stay educated on the politics that affect their business,” said Lisbeth Lyons, vice president of Government Affairs at Printing Industries of America. “Print’s Voice 2010 will equip printers with the resources necessary to have their voice heard in our government. Additionally, face-to-face meetings with Congress is a valuable step to increase the visibility of the printing and graphics communications industry among lawmakers and to urging policy positions that positively affect the printing industry.”
The conference is divided into three different segments:
The Politics
“Equal time” political preview and predictions by Democrat and Republican senators/representatives and political parties.
The Issues
Senators/representatives will provide an overview of hot-button election issues and predictions for how election results will impact future debate. Issues include: Estate tax, card check, health care reform, and Consumer Product Safety Improvement Act.
The Industry
The “Printers Vote” boot camp conducted by Lisbeth Lyons and her team will educate participants about three models of civic education and Get-Out-The-Vote programs.
For more information, visit www.printing.org/printsvoice. To register, contact Printing Industries of America at 202-730-7970 or govtaffairs@printing.org.
source: Printing Industries Of America
PRC Schedule For Three Public Hearings On USPS Rate Increase Request
The Postal Regulatory Commission (PRC) has posted schedule of live audio broadcasts for three public hearings to question Postal Service witnesses in the exigent rate case. Links to the audio will be posted on the PRC website approximately 10 minutes prior to the broadcasts.
All public hearings begin at 9:30 a.m.
- Tuesday, 8/10/2010 – USPS Executive Vice President and Chief Financial Officer, Joseph Corbett
- Wednesday, 8/11/2010 – USPS Vice President, Finance and Planning, Stephen J. Masse
- Thursday, 8/12/2010 – USPS Pricing Economist, James M. Kiefer
Direct Marketing Association Statement on Postal Service Rate Hike Request
Press Release
Washington, DC, July 26, 2010 — The Direct Marketing Association (DMA) and the DMA Nonprofit Federation (DMANF) today asked the Postal Regulatory Commission (PRC) to dismiss the United States Postal Service’s (USPS) request to increase postal rates by ten times the rate permissible by law. The petition was filed by the Affordable Mail Alliance, of which the Direct Marketing Association and the DMA Nonprofit Federation are supporting members. The Affordable Mail Alliance’s members are commercial and nonprofit organizations. Commercial mail accounts for 85 percent of the Postal Service’s revenues.
The Postal Service seeks to raise prices by an average of 5.6 percent — more than ten times the current rate of inflation — claiming as “exigent” circumstances the recession of 2008-2009 and electronic diversion of First-class mail. This action by USPS comes just three years after Congress passed the Postal Accountability and Enhancement Act (PAEA) of 2006, which was supposed to prevent rate increases that exceed the rate of inflation. USPS claims that there are “exigent circumstances” that necessitate an increase, and that one of those circumstances is the shift of mail to the Internet.
The motion filed by the Affordable Mail Alliance asserts that “the Postal Service’s most fundamental problem is not the Internet, or the recession, but a lack of effective cost control.”
“Businesses across the country have had to make difficult decisions due to the recent recession – tightening their belts, increasing productivity and in some cases, cutting their workforces as their revenue fell by 20 percent or more,” said Jerry Cerasale, DMA’s senior vice president of government affairs. “Because of this highly efficient management, many of those same businesses – including UPS and FedEx – have managed to return to profitability within a quarter or two. The Postal Service has not taken the same difficult steps. Instead, its unit costs rose by six percent in 2009 as prices fell across the economy. The Service has a lot more work to do to bring their costs under control before turning to its customers for yet another rate increase.”
In the motion, the Alliance holds that “raising prices above the Consumer Price Index (CPI) in this case would nullify the single most important safeguard for mailers and the public in PAEA. If the increases are approved, the central regulatory constraint of PAEA will be dead.”
Cerasale also said, “The things that Congress envisioned as ‘exigent circumstances’ were events like September 11th, Katrina, or the anthrax crisis. Mail shifting to the Internet and the economic downturn just don’t rise to the same level as those other events.”
The Affordable Mail Alliance includes charities, large and small businesses, American household names and the customers who use the Post Office every day – customers that will suffer if USPS successfully raises rates again.
For more information or to speak with a representative from the Affordable Mail Alliance, please visit www.affordablemailalliance.org.
Affordable Mail Alliance Calls on PRC to Dismiss Postal Service Rate Hike Request
Filed under: postal, postal news, press releases, rate increase, usps
Press Release
Wrong on the Law, Wrong on Policy, Wrong on the Economy, and Wrong on Jobs:
Washington, DC – The Affordable Mail Alliance (AMA) today called on the Postal Regulatory Commission to dismiss the Postal Service’s rate hike proposal filed on July 6, 2010. AMA’s motion argues that the rate hike violates the cost controls Congress put in law to protect consumers and that the Postal Service needs to cut costs and modernize rather than raise rates an average of ten times the rate of inflation.
“Allowing the Postal Service to raise prices above the Consumer Price Index in this case would nullify the single most important safeguard for mailers and the public in the Postal Accountability and Enhancement Act of 2006 (“PAEA”),” AMA argues in its motion. Senator Susan Collins (R‐ME), an author of the 2006 law, has already said the proposed increases do not qualify for an exception under the standards established by Congress.
The Affordable Mail Alliance (AMA) is a coalition of over 700 large and small businesses, nonprofit organizations, and associations of mailers that together account for a majority of the mail sent in the United States. Its members employ over 7.5 million workers and contribute nearly one trillion dollars to the economy each year.
The PAEA limits the average postal rate hike to inflation as measured by the Consumer Price Index (CPI).There is an exception to the CPI cap only for “exigent circumstances” when the Postal Service could not continue operating without overall price increases above the CPI. But this exception is intended only for “extraordinary or exceptional circumstances” that would leave the Postal Service short of funds to provide necessary services despite “the best practices of honest, efficient and economical management.” The AMA argues that the Postal Service has not met that test, pointing out:
• Economic downturns are a part of life. The ups and downs of economic cycles, like changes in the weather, are not “extraordinary” or “exceptional” circumstances.
• The trend toward internet communications away from mail has been taking place over the past fifteen years, giving the USPS years to prepare for the decline in volume. It hasn’t.
• While the recession, which began in December 2007, caused sharp declines in volume and revenue, competitors of USPS, such as FedEx and UPS, had comparable or even greater declines.
Those and other well‐run firms, made the necessary and painful cuts in operating costs and capacity to increase productivity. The USPS did not and its productivity has fallen.
“The result has been devastating,” the motion argues. “In Fiscal Year 2009, when prices in the overall economy actually declined, the Postal Service costs per unit of output increased by more than six percent. Had the Postal Service merely held its costs to the level of inflation in the general economy, the Postal Service would have made a profit in 2009.”
The AMA noted that businesses large and small and individuals across America have tightened their belts, cut their spending, and made painful choices due to accommodate challenging times.
“Now the Postal Service expects customers to pay the price for its refusing to do what its customers had to,” the AMA said. “For our organizations, the Postal Service’s unwillingness to do its part will mean the loss of thousands of additional jobs, further cuts to pay and benefits. This is an issue about investing for possible future growth or paying higher taxes in the form of higher postal rates. At this time of a shaky economic recovery, this is the functional equivalent of a tax increase on every American postal customer, whether individual or business. If this takes effect January 2, 2011, and American businesses and consumers will be spending more on postal services, there will be less money for investment, payrolls, and business growth.
“Punishing customers with higher prices is not the way to make the Postal Service solvent. In fact, without effective cost control, trying to make the Postal Service solvent through financial infusions will be like trying to fill a bucket with a hole in its bottom. The Postal Service will lurch from one financial crisis to the next. The American people will sooner or later have to pay, through higher taxes or higher prices.”
For further information, please visit www.affordablemailalliance.org
Click here for a copy of the Motion to Dismiss
Do Congress And PRC Agree On USPS’s Ability To Request An “Exigent” Rate Increase?
From Mailing Mailing Systems Technology via Postcom:
A question that’s top of mind for many mailers who went through the Postal Accountability Enhancement Act of 2006 (PAEA) is, what does Congress think
about the recent USPS filing to the PRC of an exigent rate increase? Here are some things to consider on the legality of the filing (not the rates themselves) that
Congress may weigh in on.
Major Mailers Go Ballistic Over Rate Increase
Attempt to Shift the Burden to Postal Employees
Burrus Update
The Postal Service has filed a request to increase postage rates effective Jan. 2, 2011, and is proposing to raise the price of first-class, single-piece letters from 44 cents to 46 cents. Increases for other mail classes would range from 5.4 to 8 percent.
As anticipated, large mailers have gone ballistic. They have formed a new organization, the Affordable Mail Alliance, dedicated to stopping the rate hike.
The mailers comprising the Affordable Mail Alliance want mail service, but they do not want to pay the actual cost of those services. Instead, they are seeking to shift attention to the employees. They are suggesting a renewed focus on closing stations and branches, consolidating mail processing facilities, and demanding concessions from workers.
The next step is a review by the Postal Regulatory Commission, which may accept, reject, or modify the proposed rates. This is the first rate request submitted under the “exigency provision” of the 2006 Postal Accountability and Enhancement Act (PAEA), and it faces stiff opposition because it would increase postage rates above the rate of inflation. The exigency provision allows the USPS to do so.
The APWU will intervene in the PRC proceedings to contest the absolute refusal by postal officials to comply with another provision of the law, which stipulates that postage discounts may be no greater than “postal costs avoided.”
Despite the Postal Service’s admission in previous rate requests that discounts exceed the costs avoided, this request would reduce the discount on five-digit pre-sorted mail by just 1/10 of 1 cent. This is preposterous!
Mailers Try to Make Employees Pay
Early indications are that the Affordable Mail Alliance will attempt to make employees the scapegoat, by claiming that postal workers — who have the benefit of collective bargaining — are paid substantially more than employees in comparable private-sector jobs.
They hope to make postal employees pay for the legislation that requires the USPS to pre-fund $56 billion in future retiree healthcare obligations over a 10-year period.
The 2010 exigency rate request is a direct response to the requirement that the Postal Service assume this cost in 10 successive annual payments ranging from $5.4 to $5.8 billion. Absent this payment, a rate increase in 2010 would have been unnecessary.
Can you guess who the principal supporters of the legislation that requires the onerous payments were? Yes, the large mailers. Now the same mailers who supported the requirement cry that the payments should be made from the wages and benefits of postal employees.
When postal employees retire, they assume responsibility for approximately 30 percent of health insurance premiums, which is a significant increase from what they paid when they were active employees covered by the Collective Bargaining Agreement. For example, an employee who is enrolled in the Blue Cross Standard Family Option pays $132.83 biweekly or $287.80 monthly during active employment; upon retirement, this payment escalates to $400.97 monthly. The balance of the premium is paid by the government, which is reimbursed by the USPS.
The PAEA requires the Postal Service to pre-fund the USPS share of this future payment, and now the mailers want to force postal employees to pay the USPS share through wage-and-benefit reductions equal to the PAEA-required payments. This would result in postal retirees paying 100 percent of their retirement healthcare premiums — by shifting the pre-funding requirement to employees through cuts in their pay and benefits.
Exigency Case Was Inevitable
The simple truth is that the exigency rate case was inevitable. The 17 percent decline in mail volume, coupled with the pre-funding requirement, has left the USPS on the brink of insolvency.
Because the Postal Service does not earn or set aside profits, any USPS deficit bears a direct relationship to the cost of postal operations – including mail collection, processing, transportation, delivery, retail services, and support. By law, the postage that funds these operations must equal the costs.
The mailers comprising the Affordable Mail Alliance want mail service, but they do not want to pay the actual cost of those services. Instead, they are seeking to shift attention to the employees. They are suggesting a renewed focus on closing stations and branches, consolidating mail processing facilities, and demanding concessions from workers.
The 2010 rate adjustments proposed by the Postal Service are not a response to declining mail volume caused by the recession, or the diversion of hard-copy mail to electronic forms. This adjustment is to pay the future healthcare bill, aggressively lobbied for by the mailers who now cry foul when payment is due.
I feel compelled to tell them: “You wanted the PAEA and its payment schedule, but now you want to avoid paying for it through higher postage rates.”
William Burrus
President
Does anyone at USPS HQ actually listen to what they’re saying?
From Postcom:
Here’s a quote from a USPS executive published by Logistics Management. It’s a beaut.
“We are facing this problem because of a massive drop in mail volume and the fact that the bulk of our costs are fixed by laws, contracts, or regulations. Our operating flexibility is severely limited right now. Our network is expanding by a million delivery points every year, and we are subject to a lot of legal requirements that limit our ability to reduce service commensurate with the decline in demand.”
Okay, okay. Let’s see. The USPS is losing mail volume, so the way to gain that volume back is to raise prices. Right? Wonderful logic, don’t you think? Okay, okay, “our costs are fixed by…contracts.” Are we expected to believe that those contracts happened without USPS participation or complicity? Gimme a break. Okay, okay, “we are subject to a lot of legal requirements.” You’re a government agency with a statutory monopoly, for cryin’ out loud! You want to be rid of both, go private and leave your governmental binky at home. Does anyone over there actually listen to what they’re saying?