Postal Reform Thrown a Lifeline

Faced with leaving the U.S. Postal Service in a “death spiral” of increasing rates and declining volume, Congress threw Mr. ZIP and the mailing community a lifeline with the passage of the Postal Accountability and Enhancement Act.

In the waning hours of the lame duck session, Congress passed H.R. 6407, much to the surprise and delight of those who profit through mailed communications, including printers. The legislation, a dozen years in the making, goes a long way toward overhauling an institution that had been operating with business procedures established in 1970, long before alternative means of communication, particularly the Internet, became a viable threat.

The final hurdle for the reform is President Bush’s signature. He is expected to sign it into law.

“Passage of postal reform will allow this vital segment of the nation’s economy to remain viable and successful in the years to come,” said Michael Makin, president and CEO of PIA/GATF.

Among the highlights of the compromise:

• A cap on rates linked to increases in the Consumer Price Index (CPI) that would be reviewed after 10 years by a newly created Postal Regulatory Commission.

• The law requiring the USPS to make $3 billion in annual payments into an escrow fund would be repealed. That money could be used to cover retiree healthcare liabilities.

• Pension costs associated with military service credits are shifted from the USPS to the taxpayer.

• It replaces the highly litigious process of filing for rate increases.

As this e-newsletter was being sent out, it appeared unlikely that reform would have an impact on the pending rate case slated to be implemented in May. USPS could theoretically make one more additional increase request under the old rules, although that seemed unlikely.