Postal Reform Bill Calling For 2.15% Rate Hike

by Stephen Lett

The House Oversight Committee today unveiled a discussion draft postal reform bill. In a press conference, five key Committee members, including Chairman Jason Chaffetz (R-UT-3rd) and Ranking Member Elijah Cummings (D-MD-7th), explained the draft bill's core elements. The bill will be marked up in committee in about two weeks, then introduced so it will be ready when Congress is back in session.

Rights Benefits & Pension Costs

Among them, it establishes separately rated postal plans within the Federal Employees Health Benefits Program (FEHBP) beginning in January 2018, and calculates the Postal Service’s pension costs and liabilities using the salary growth and demographic assumptions that are specific to the Postal Service population instead of the government-wide population, as in current law.

Mandated Rate Hike

Although the Chairman said the goal of the bill was to avoid rate increases, in light of insistence by USPS management that it cannot operate without the reinstatement of the full 4.3% exigency surcharge and by the mailing industry for no Congressionally-mandated postage increase of any kind, the draft bill compromised by allowing for a 2.15% increase.. Potentially more alarming, however, the bill directs the Postal Service to raise rates on "each loss-making class of mail to eliminate such losses" - subject to certain overall rate increase limitations. Although this could be construed to point to underwater Standard Flats, the draft goes on to specify that "loss making" equates a class of mail that bears less than 100% of its costs attributable. While the Standard Flats product is under water, the Standard Mail class is not.

Other Highlights...

Chairman Chaffetz (right) said the Committee took “an awful lot from the Senate bill” but will try to move it faster than the Senate could. Ranking Member Cummings said he is "very satisfied with this bill because it’s very much the same thing I had" in mind. In his attempt to justify the 2.15% increase, Cummings said the goal "is to have this small increase now so we can avoid big increases later." Also, whereas under the current law the Postmaster General and Deputy PMG are named by the postal governors for unspecified term lengths, under the House draft bill, both positions would be appointed by the President and confirmed by the Senate to 4-year terms.

Full Bill & Summary

Here are links to the the full bill and a four-page summary. ACMA has been very involved both directly and through the Coalition for a 21st Century Postal Service. Hamilton Davison has held several meetings on the Hill since last month's House hearing on the USPS, and will continue to stay engaged in the discussions. Republished with the permission of the AMCA