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Issa Reiterates USPS Must Reel in Labor Costs

October 7, 2011

WASHINGTON, DC—Certain members of the Republican Party are repeating their support of the notion that reducing labor costs is the best remedy to cure what ails the United States Postal Service (USPS), according to finance and economy blog The Hill.

One of the leading champions behind slicing labor costs is Rep. Dan Issa (R-CA), the chairman of the House Oversight and Government Reform Committee. Issa told the crowd at an event sponsored by the conservative Heritage Foundation that under his proposed legislation, the USPS should be able to pare away as many as 200,000 workers in the next few years, particularly those employees who would already be eligible for retirement, The Hill reported.

"Do I have sympathy for the Post Office? I do," Issa reportedly told the audience. "They didn't create the Internet."

While the USPS floated the idea of asking Congress to allow it to lay off 20 percent of its workforce in order to cut down on mounting losses—an idea roundly dismissed by the postal unions—Issa and other politicians are optimistic that a bipartisan, going-forward plan can emerge from Congress. The Postal Service's $5.5 billion prepayment for retiree health care benefits was not made by the Sept. 30 deadline, but the Congressional patchwork deal to fund the government through mid-November pushed the due date back.

In other news, the USPS has asked the Postal Regulatory Commission (PRC) for more time to make a decision on whether to pursue its above-inflation (exigent) rate increase. The PRC had set an Oct. 4 deadline for USPS to provide a response  to clarifying the legal requirements for the exigent rate increase request for regulated market-dominant mail products.

After the PRC had rejected the USPS' request for a 5.6 percent bump in rates, a court had asked the PRC to provide a clarification, which it has done. Now, the Postal Service wants to delay a decision over its next course of action until Dec. 15. Earlier, Postmaster General Patrick Donahoe told major mailing customers he didn't want an above-inflation increase for this coming January, out of fear it would push mailers toward digital alternatives.

But the USPS cautions such a move could happen regardless, given the multiple pieces of legislation in Congress and proposals made by President Obama that could cause prices to shoot up on mail products that do not pay for themselves, including the Standard Flats service.

The USPS favors a stay in the exigent case, as it would allow any pending legislation to play out as part of Obama's national deficit reduction plan, which will be advanced by a Congressional committee in late November. Should Congress not pave the way for an increase exceeding the level of inflation, the USPS would likely resume the exigent rate request.


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