Emergency Alert: Unlimited Postal Rate Increases Proposed by Senate Leaders
January 23, 2014
Sens. Thomas Carper, D-DE, and Tom Coburn, R-OK, are proposing new legislation that would remove rate regulation from the Postal Regulatory Commission and give the U.S. Postal Service’s own Board of Governors unlimited authority to adjust postage rates for mail within its mail monopoly.
The Senate Homeland Security and Governmental Affairs Committee intends to review this bill for passage to the Senate floor on Jan. 29. NNA recommends that you urgently contact your senators to ask them to contact the committee and urge that this bill be suspended until proper rate regulation is included.
Despite a postage rate increase that more than triple inflation rates for most Periodicals-mailed newspapers, the Postal Service continues to argue for more “flexibility” in setting rates. That flexibility could be manifested in higher Periodicals rates, lower saturation mail rates for newspaper competitors and other outcomes that affect mail distribution.
Now, the law limits postal increases to a common Consumer Price Index for each class of mail (e.g,.First Class, Periodicals, Standard), to be exceeded only with prior review of the PRC.
But the new proposal would let the presidentially-appointed Board of Governors, which includes two seats for postal management, decide to raise rates by the CPI index plus 1 percent as a total revenue figure for all monopoly mail. That means major adjustments for Periodicals mail, Standard mail or other classes used by newspapers could occur so long as all mail together produced revenue under the cap.
This provision could mean a chain of triple- or quadruple-inflation increases, without even PRC oversight, in the future.
The bill also includes modest language to rein in Negotiated Service Agreements, such as the one extended to Valassis Direct Mail Inc, last year. But this proposed language requiring the Postal Service to take into consideration the relative harms to mailers, would simply invite the PRC into regulating the advertising marketplace. It is not enough. Our industry needs tighter rules on NSAs.
Sen. Tammy Baldwin, D-WI, is prepared to introduce an amendment to strike the rates section, Section 301, and leave the current law as is. If you have senators on the committee, please ask them to join her. But even if your senators are not on the committee, please contact them NOW and tell them:
- The Postal Service remains a powerful government monopoly that must not be deregulated to this degree.
- Setting a price cap at the total-mail level, rather than upon each mail class, invites price manipulation by USPS.
- The Postal Service badly needs some other provisions in this bill, such as one to recalculate crippling burdens from employee benefit programs imposed by Congress in 2006. But while Section 301 remains, many who otherwise support postal reform, cannot promote the Carper-Coburn bill.
- The Postal Service should not engage in NSAs for advertising. Its monopoly pricing powers distort the market and improperly put the Board of Governors and PRC into a role of advertising regulators.
Also, please join NNA on March 13 in Washington when publishers take their case to Capitol Hill. NNA is the voice in Washington for Community Newspapers. Postal Reform legislation is needed. Once completed, it will be in effect for years to come. Act now to protect your industry.