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Congress Needs to Act on USPS Reform –Michelson

March 2013 By Mark Michelson

As of press time, Congress had yet to pass any type of meaningful reform for the U.S. Postal Service (USPS)—unless you consider passing laws to rename a post office after someone noteworthy. Ongoing partisan politics and the inability of Congress to pass legislation on key issues, including postal reform, have led to an average approval rating of just 14 percent for Congressional legislators, according to a recent Gallup poll, and a ranking slightly above car salespeople when it comes to possessing traits such as honesty and high ethical standards.

So, as various bills linger in both the House and Senate, you can't blame Postmaster General Patrick Donahoe for taking unilateral action. The announcement to disband Saturday mail delivery starting in early August is just the latest move, coming on the heels of plans to expedite the consolidation of postal facilities across the country.

Some also blame Congress for saddling the USPS as the only agency with the onerous requirement to pre-fund health care benefits for its retirees. Having already defaulted twice on its $5.5 billion annual payments, authorizing payments over a longer period would help stop the bleeding, at least in the short-term. And, with the capacity to process 300 billion pieces of mail annually—and mail volume estimated to only be 153 billion pieces in 2013—the Postal Service needs the authority to rightsize its operations by renegotiating postal union agreements.

Unfortunately, printers and mailers find themselves in a precarious position, as noted by Quad/Graphics CEO Joel Quadracci, who testified at a Senate committee hearing on Capitol Hill last month about the Postal Service's importance to the $1.3 trillion mailing industry that employs 8.4 million Americans. "It may be tempting to address the Postal Service's financial situation by simply raising postage rates to 'cover the costs,' but I cannot stress enough how damaging postal rate increases are to our industry," he told the panel. "There is a direct negative correlation between rate increases and volume. Our customers demand predictability and affordability and, if prices suddenly increase more than expected, they react by reducing their volume to cover the extra postage or they move away from print altogether."

The USPS has certainly played a starring role in creating many of the problems it faces. But it also deserves credit for being proactive in finding solutions, despite being hamstrung with retiree pre-funding requirements and inflexible union labor contracts. Now is the time for all hands on deck in Congress to throw the USPS a much-needed lifeline.


 

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