The Chamber

Inflation Cap Busting Postage Increases

In 2010, DMA lead the Affordable Mail Alliance – a coalition of 1,200 postal customers – to oppose the Postal Service attempt to raise postage rates 10 times the rate of inflation.  We were successful and saved postal customers $30 billion over the next ten years.  DMA believes the Postal Service must down size its facility network and workforce to match the lower mail volumes expected in the future.  Customers cannot afford to support a 300 billion mail piece delivery system when only 150 billion pieces are in the mail stream.  DMA is actively working to maintain the Alliance to work to reduce postal costs to keep the Postal Service financially viable and affordable.  The Postal Service should live within inflation as established by the Postal Accountability and Enhancement Act of 2006 (PAEA).

When USPS filed an exigent rate case with the PRC in early July, requesting permission to raise postal by nearly ten times the current rate of inflation, DMA responded by organizing an unprecedented coalition of postal customers to fight the exigent rate case before the PRC. The Affordable Mail Alliance (AMA) - including nearly 1,000 charities, large and small businesses, American household names and the customers who use the Post Office every day – called on the PRC to reject the Postal Service’s proposal to raise postal rates by up to ten times the rate permissible by law.  In late July, the Alliance filed a motion to dismiss USPS’ rate hike proposal, arguing 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. The PRC dismissed the USPS rate increases – a huge victory for DMA and the AMA.

The Postal Service appealed the Commission's decision and the Alliance filed a joint brief supporting the Commission. The Court of Appeals sent the case back to the Commission for further explanation, and DMA will join with other Associations to file Comments supporting the Commission's prior decision.

Learn the latest from the Affordable Mail Alliance.

Postal Pensions and Retiree Health Benefits

Since 1971 the Postal Service through customer postage payments has been funding pension and retiree health benefits for postal retirees.  PAEA established a 10-year payment schedule to fully fund postal retiree health benefits.  Due to the recession that payment schedule is too aggressive due to reduced postal revenues.  DMA has actively sought to have Congress defer those payments which Congress did in 2009.  DMA along with the Alliance, the Postal Service and postal employees are seeking such a deferral in 2010.

The Inspector General of the Postal Service has found that since 1971 postal customers and the Postal Service have overpaid for retiree benefits by $75 billion.  The Postal Regulatory Commission conducted its own study of postal retiree payments and found that mailers had over paid for pensions by $50 to $ 55 billion.  DMA is joining coalitions of mailers, Postal Service and employees to have that overpayment transferred to the Postal Retiree Health Benefits Fund which would eliminate the aggressive payment schedule for retiree health benefits established in PAEA.  This is a top priority and an ongoing lobbying project for the DMA.

Opposition to Cost Shifting

One potential avenue for the Postal Service to live within inflation for postage is to shift costs to mailers through new mail preparation requirements.  Such actions evade the inflation cap of PAEA, and DMA opposes them.  DMA has worked to alter new mailing requirements that are cost shifters and will continue to do so.  If the efforts of the Postal Service become too aggressive, DMA will consider using the complaint procedures at the Postal Regulatory Commission.  We will work with the DMA postal subcommittee on these efforts.