In a letter to House and Senate postal oversight committee members, the Mailers Council's Executive Director asked that Congress join in opposition to a possible USPS plan to file for another rate increase in the next few months.
Honorable Henry Waxman
Chairman
Committee on Oversight and Government Reform
US House of Representatives
Dear Chairman Waxman:
I write to ask you to join all the individuals and businesses that use the postal system in opposing the Postal Service's plan to file for a postage rate increase in the next few months.
As background, this increase would be filed under a regulatory process approved in 1970. This outdated law was replaced by a new process included in PL 109-435, approved in December 2006the first major postal reform law in 37 years.
Furthermore, the Postal Service has just completed the 18-month regulatory process for a rate case that was filed last year, before passage of PL 109-435. It will result in a postage increase effective May 14 that will affect all mailers, some of whom will experience increases exceeding 40%. Rate cases are important to the Mailers Council because our members are corporations, nonprofit organizations, and major mailing associations that collectively represent more than 70% of all mail. We believe that the USPS can be operated more efficiently, support efforts aimed at lowering postal costs, and have the ultimate objective of containing postal rates without compromising ser-vice.
Although the 2006 law allows the Postal Service to file another rate case under the rules passed in 1970, we oppose such an idea for two reasons. First, it is important to recognize that Congress approved and President Bush signed the postal reform law in part to ensure a less expensive and litigious rate process that would result in smaller, more predictable rate increases. The old, outdated system costs our members several million dollars each rate case in fees for the attorneys, economists, and consultants that represent mailers in this lengthy, highly specialized regulatory process.
Second, the new law gives significant new responsibilities to the renamed Postal Regulatory Authority. As a result, the PRC is in the process of increasing its staff by more than one-third. This law mandates several new and time-consuming studies the PRC must complete within 18 months of passage of PL 109-435, including the development of a modern ratemaking system. To ask the PRC to cope with another rate case under the old 1970 rules with all these other activities underway would impose excessive demands on an organization undergoing profound and unprecedented changes.
PRC Chairman Dan Blair, who became chairman only a few weeks ago, concurs with our opinion. At a recent forum sponsored by the Postal Service on the new postal reform legislation, Blair suggested in his opening remarks that the Postal Service should look to the future regarding postage rate increases, asking, " does it make sense to litigate an omnibus rate case at the same time everyone is trying to develop a new system?"
We believe it makes little sense and have strongly encouraged the Postal Service to avoid another rate case under a statute approved in 1970. A rate case filed during or immediately after the current rate case will give many mailers an incentive to leave a postal system that is continually changing its prices and rulesoften with inadequate time to prepare for them.
We hope you will support the many businesses nationwide that are part of the $9 billion mailing industry and its more than 9 million employees by encouraging the Postal Service's Board of Governors to avoid such a costly and difficult rate case and asking the board to publicly state its intention to raise rates going forward only under the new process.
Sincerely,
Robert E. McLean
Executive Director