US DMA optimistic that 2004 is the year for postal reform

The Direct Marketing Association (The DMA) expressed its appreciation to the leadership of the U.S. House of Representative's Government Reform Committee whose Special Panel on Postal Reform and Oversight today heard the concerns of the mailing community regarding the future of the U.S. Postal Service (USPS).

The DMA said that today's hearing, the most recent in a series of hearings related to the USPS in both the House and Senate, is a further indication that much-needed postal reform legislation has priority status for Congress this year.

The DMA and other stakeholders have long held that the viability of the world's largest postal network, and those whose livelihoods depend on it, are in jeopardy unless meaningful postal reform legislation is enacted into law.

"The Postal Service's outdated business model — established by the Postal Reform Act of 1970 — significantly limits its ability to operate competitively in the 21st century," said H. Robert Wientzen, president & CEO, The DMA. "The DMA is very pleased that a range of voices, from catalogers to charities — organizations that rely on sending direct mail — were invited today to share their concerns and make recommendations to the Committee."

"The Postal Service is being increasingly impacted by the changing the communications and delivery landscape," said Rebecca Jewett, vice chairman of Norm Thompson and chairman of the board of The DMA. "It's legacy business model and structure is counterproductive to the Postal Service's ability to perform its most vital function: ensuring the universal availability of reliable, affordable postal services."

"We founded our business over fifty years ago, but one thing remains the same: we depend on the U.S. Postal Service as our primary marketing channel to reach current and prospective customers," Jewett said. "Without the Postal Service, there would be no Norm Thompson."

"Nonprofit mailers account for over 8 percent of total mail volume," said Lester C. Hess, Jr., past national president and chairman of the Grand Lodge Advisory Committee, Benevolent and Protective Order of Elks of the United States of America, a DMA Nonprofit Federation (DMANF) member. "However, without legislative reforms that will stabilize nonprofit postage rate increases and our ability to adequately predict them, not only will charitable mailing go down, but organizations that provide social services, foster the arts, support education, and feed the hungry will be severely injured."

DMA Calls for Fair Resolution to CSRS

"In addition to their focus on systemic postal legislative reform, we are pleased that members on both sides of the aisle and on both sides of Capitol Hill support the Postal Service's call for fair resolution to the remaining problems associated with overpayments to the Civil Service Retirement System (CSRS)," said Wientzen.

"This is particularly important to the short-term financial well-being of the Postal Service and its postage-paying customers," said Wientzen. "If appropriate legislative fixes are not enacted soon, we could see dramatic postage rate increases."

According to The DMA, there are two aspects of the current law governing the USPS that must, in the interest of fairness and equity, be addressed in order to avoid needless postal rate increases and strains on the U.S. economy.

First, federal law now requires that, beginning in 2006, the USPS divert certain funds, totaling 19.4 billion for just the remainder of the current decade, to an escrow account. However, the funds in the account — which will no longer be needed to fund pensions — will remain dormant pending Congressional authorization on where and how to use them, rather than allowing the USPS to incorporate that money into its business plan.

The second issue relates to a legal obligation that is unique to the Postal Service — as opposed to other federal agencies. And that is the requirement that the USPS underwrite retirement costs associated with the military service time of its employees.

"It is not fair that the Postal Service's customers — the mailing public, which entirely funds Postal Service operations through postal rates — bear the pension costs associated with postal employees' military service when the federal government bears that expense for every other federal employee who has served in our nation's armed services," Wientzen said.

"It is clear that the Postal Service must be empowered to make changes in order to remain an affordable business communications channel in the face of a rapidly evolving communications and delivery marketplace," Wientzen said.

"Although he has done an outstanding job, there is a limit to how much Postmaster General John Potter and his management team can achieve when hamstrung by the constraints of a law designed for a bygone era," Wientzen added. "It's up to Congress to ensure that he and future Postmasters General are relieved of unnecessary financial burdens and given the necessary tools so that the largest and most respected postal network in the world remains up to the challenge of affordable, reliable, universal mail service for all American households, businesses, and nonprofit organizations."